The European Commission has unveiled an action plan aimed at aiding the European automotive sector’s access to crucial strategic technologies such as batteries, software, and self-driving capabilities, alongside reducing regulatory hurdles.
On Wednesday, Apostolos Tzitzikostas, who serves as the Commissioner for Sustainable Transport and Tourism, unveiled the plan.
The list includes five key programs aimed at bolstering the struggling automobile sector, an industry that accounts for 7% of the EU’s gross domestic product and supports approximately 14 million jobs throughout the region.
Nevertheless, the industry has been facing challenges attributed to supply chain disruptions, elevated energy expenses, and an excessive dependency on crucial imports.
To tackle this issue, the Commission has declared a fund of €1.8 billion aimed at establishing a safe and competitive supply chain for battery raw materials.
Ensuring a secure source of batteries and their raw materials is among the primary challenges the automotive sector encounters during the shift towards emission-free vehicles.
"We aim to boost local manufacturing to reduce strategic dependencies, particularly when it comes to producing batteries," stated Commission President Ursula von der Leyen on Wednesday.
In addition, the European Commission highlighted the importance of European automotive companies taking the lead in developing AI-driven, interconnected, and autonomous vehicles. To facilitate this, they committed to providing €1 billion in funding from 2025 through 2027.
An additional €570 million will be allocated for financing the establishment of charging stations.
The action plan details additional measures for enhancing the skills of workers within the sector and pledges ongoing assistance to small and medium-sized enterprises (SMEs).
More adaptable yet fundamentally unaltered clean mobility objectives
The Commission remains committed to its clean mobility goals, firmly establishing the emission limits for new cars and vans in 2025, 2030, and 2035.
At present, the aim is to gradually reduce the emissions of newly manufactured vehicles until 2035, after which only zero-emission models will be allowed to be produced.
"We will adhere to our committed emission goals while adopting a practical and adaptable strategy," stated Von der Leyen.
Following numerous appeals from the automotive sector, and with electric vehicle sales decelerating in Europe, the Commission pledged to introduce an updated amendment.
If implemented, this change would allow vehicle makers three years rather than just one to achieve their compliance goals (emission standards) by calculating the average across 2025-2027. This means they could compensate for poor performance in any single year within that period during another year within the same timeframe.
Despite currently sticking with the targets, the Commission has plans to review the rules around CO2 emission standards in the second half of 2025, sooner than expected.
In the meantime, the Commission committed to supporting increased demand for European zero-emission vehicles and released a fresh proposal aimed at decarbonizing company cars. Such vehicles account for 60% of new car registrations.
Enhancing the presence of European automakers on the international market
The United States is threatening Europe with a 25% trade tariff, posing a significant risk to the region’s automobile sector. Meanwhile, Chinese competitors are exerting pressure on the global market, leading to reduced profit margins for European automakers.
To assist European automakers in turning the tide, the Commission committed to "maintain fair competition" through various tools. This includes implementing anti-subsidy actions along with forging free trade deals.
The Commissioner identified India as one of the "like-minded" nations where the EU might forge advantageous trade deals.
Diverse responses from the sector regarding the Action Plan.
The European Automobile Manufacturers' Association (ACEA) stated that although they supported the action plan, "important components were still absent."
“The ACEA stated that ambitious steps are required to enhance infrastructure, provide demand incentives, and lower manufacturing costs for automobiles, vans, trucks, and buses.”
Sigrid de Vries, the Director General of ACEA, further commented: "This suggested flexibility to achieve CO2 objectives over the next few years marks a positive initial move toward a more practical strategy for reducing emissions, one influenced by current market conditions and geopolitical factors. This could provide some relief for manufacturers of cars and vans, as long as the essential demand-boosting and charging infrastructure initiatives are indeed implemented."
E-Mobility Europe stated: "We are disappointed that the European Union’s CO2 targets for 2025 have been reduced, which could stifle near-term electric vehicle sales, decrease investment certainty, and adversely affect top industry players."
Lucie Mattera, the Secretary General of ChargeUp Europe, voiced her concerns as well, stating: “The European Commission has reaffirmed the target for 2035 with zero emissions. Although the added flexibility introduces some ambiguity during this period, more than 11 million electric vehicles are already circulating across Europe, indicating that the shift towards sustainable transportation is firmly progressing."
Addressing the frequent complaint about insufficient charging stations, which hampers demand, she stated: "The electric vehicle charging infrastructure industry expands daily, providing faster and more streamlined EV charging experiences."
The main problem with the updated charging infrastructure is obtaining entry to the grid , which provides electricity.
It might require several months, or even years in certain instances.
To tackle this issue, the commissioner stated that Brussels will release guidelines for the member states aimed at reducing wait times.
The Commission is considering whether it should make it obligatory for member states to prioritize these requirements, ensuring that permits can be processed more quickly.
