Among other things, the EC wants to give manufacturers more time to adapt to more stringent CO2 emission limits.
As the European automotive and transport industry undergoes profound and transformative change, the Commission sees an urgent need to take action both to protect the European automotive industry and to ensure the right conditions for the European Union to operate.
“The European automotive industry is at a turning point, and we are aware of the challenges it faces. That is why we are acting quickly to address them. The fundamental question we need to answer together is: what is still missing to unleash the innovative power of our companies and ensure a strong and sustainable automotive sector?” said Ursula von der Leyen, President of the European Commission.
At the end of January, Ursula von der Leyen met leading representatives of the European automotive industry from companies such as Renault, Volvo, and Volkswagen, along with social partners and interest groups, to launch a strategic dialogue on the future of the European automotive sector.
“This dialogue was the start of a collaborative process aimed at addressing the key challenges facing the sector and ensuring its success as a key driver of the European economy,” the EC emphasised.
The result of this dialogue is a comprehensive action plan presented yesterday by Apostolos Tzitzikostas, EU Commissioner for Sustainable Transport and Tourism.
Mortal danger for the sector
A few hours before the presentation of the action plan, one of the commissioners taking part in the dialogue, Stéphane Séjourné (Vice-President of the Commission for Prosperity and Industrial Strategy), gave an interview to the French news agency AFP.
“The European Commission is coming out of its naivety, protecting and organising the sector, giving it the chance to become more competitive,” Séjourné stressed.
“The European car industry is in mortal danger. That is why the European Commission is proposing an integrated plan that protects the sector (…). This is a breakthrough moment for this industry,” Séjourné told AFP.
According to the Commissioner, the share of electric cars, which are still too expensive, in the EU market fell for the first time in 2024 to 13.6%.
“To stimulate demand, the Commission is examining ‘obligations’ imposed on companies to green their fleets,” explained the EU Commissioner.
Roadmap for the EU automotive sector
Yesterday, EU Commissioner Apostolos Tzitzikostas presented a plan to support the automotive sector and “unleash its innovative power” by maintaining a strong European manufacturing base and avoiding strategic dependencies. To this end, the Commission plans to allocate €1.8 billion to create a secure and competitive supply chain for battery raw materials.
“Europe wants to become independent from imports of foreign batteries and stimulate the ecology of the European automotive industry,” said Commissioner Tzitzikostas.
According to the EC, it is also crucial for Europe to achieve cost-competitive cell production in the EU, which would cover a large part of the demand for batteries and generate European added value throughout the supply chain.
EU car companies are lagging behind in key technologies. To help the industry transition to AI-powered, connected, and automated vehicles, the action plan includes a €1 billion investment in innovation.
“Our goal is clear: to ensure that the next generation of vehicles is not only manufactured in Europe but also that innovation is created in Europe, driven by European technology,” said Tzitzikostas.
In addition, due to the insufficient charging infrastructure for electric vehicles in Europe, the Commission plans to accelerate its expansion and will allocate €570 million for this purpose in 2025-2026.
A very important element of the plan presented in Brussels is greater flexibility in terms of compliance with CO2 emission standards.
“EU emission standards for new cars and vans provide investors with long-term certainty and will be maintained. However, we must also be pragmatic. Instead of requiring annual compliance, we will allow companies to reach their targets over three years—2025, 2026, and 2027. If a company underperforms in one year, it must compensate by outperforming in the following years. Conversely, if a company exceeds its targets in 2025, it will have more flexibility in 2026 and 2027. We are also accelerating the review of the CO2 emission standards regulations, moving it from 2026 to the third and fourth quarter of 2025,” Apostolos Tzitzikostas told a press conference.
In parallel, the EC is working on ways to boost demand for European zero-emission vehicles. The action plan includes measures that will provide incentives to switch to zero-emission vehicles and strengthen consumer confidence through concrete measures such as improving battery health and repairability.
“To support this change, Member States are encouraged to provide tax breaks for zero-emission vehicles,” Tzitzikostas added.
“There is so much untapped potential in the global market when it comes to innovation and clean solutions. I want our European automotive industry to take a leading position. We will promote domestic production to avoid strategic dependencies, especially when it comes to battery production. We will stick to our agreed emission targets, but with a pragmatic and flexible approach. Our common goal is a sustainable, competitive, and innovative automotive industry in Europe that benefits our citizens, our economy, and our environment,” commented Ursula von der Leyen, President of the European Commission.
Not just “electrics”
The German transport and logistics association DSLV welcomes and supports the reorientation of the automotive industry towards different technological paths. According to the association, the “well-to-wheel” approach in European law is slowing down rapid successes in reducing CO2 emissions in road freight transport.
Therefore, the association, together with more than 80 other associations and companies, has already strongly advocated the introduction of a carbon dioxide correction factor (CCF) in the European CO2 regulation for commercial vehicle fleets in 2023, which would take into account the reduction potential of renewable biofuels such as HVO100 or bio-LNG.
The organisation believes that the focus on electric commercial vehicles in EU legislation is too short-sighted to enable the rapid decarbonisation of the road freight transport sector.
“It is not the combustion engine that is the problem, but the emissions from fossil fuels. That is why it is so important that the energy used contributes to reducing CO2 emissions. This is just as true for alternative fuels as it is for green electricity produced for batteries,” commented Dr Micha Lege, Vice President of DSLV.
According to the organisation, the EU’s current goals are still far from being achieved.
In most EU Member States, grid expansion is not keeping up with demand, and there is a lack of charging infrastructure for heavy electric commercial vehicles.
“Given the projected increase in freight transport on European roads, climate goals cannot be achieved in time without renewable, alternative fuels. The focus must be on the outcome—a CO2-free supply chain—and not on a single technology,” Lege warned.
According to DSLV, once the charging infrastructure in EU member states is ready and can be powered by cheap green electricity, electric trucks can be economically used in selected logistics applications.
“However, there is still a long way to go,” the organisation emphasised.
“Anyone who sets an end date for combustion engines in trucks now will do more harm than good for climate protection,” Lege added.