How Carmakers Can Survive the Combustion Engine's Death

The U.K. has joined France in promising to ban sales of petrol and diesel vehicles from 2040 in a drive to improve air quality and cut planet-warming emissions. When two of Europe's largest economies pledge to abolish technology that's sustained the car industry for more than a century, it's only natural that investors might fear this poses existential challenges for the industry.

But while the switch from combustion engines to electric motors will entail some near-term financial pain for carmakers (and some of their suppliers), in the long term it might actually be beneficial for profits. And Europe's manufacturers are more resilient than you might think.