The European Commission has unveiled an action plan aimed at assisting the European automotive sector in gaining better access to crucial strategic technologies such as batteries, software, and self-driving capabilities, alongside reducing bureaucratic 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 faced challenges because of vulnerabilities in the supply chain, elevated energy expenses, and an excessive dependency on crucial materials.
To tackle this issue, the Commission has declared a fund of €1.8 billion aimed at establishing a safe and competitive supply chain for raw materials needed for batteries.
Ensuring a secure source of batteries and their raw materials is among the primary challenges the automotive sector faces during the shift towards emission-free vehicles.
"We aim to boost local manufacturing to reduce strategic vulnerabilities, particularly concerning battery production," stated Commission President Ursula von der Leyen on Wednesday.
In addition, the European Commission highlighted the importance of European automotive manufacturers becoming frontrunners in producing AI-driven, interconnected, and autonomous vehicles. As part of their backing, 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 outlines additional measures to enhance the skills of workers within the sector and pledges further 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, establishing firm limits on the levels of emissions that new cars and vans will be allowed to emit in 2025, 2030, and 2035.
At present, the aim is to gradually reduce the emissions of newly manufactured vehicles up until 2035, after which point only zero-emission models will be permitted for production.
"We will adhere to our committed emission goals while adopting a practical and adaptable strategy," Von der Leyen stated.
Following numerous appeals from the automotive sector and considering the decelerating electric vehicle sales across Europe, the Commission pledged to introduce a revised proposal.
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 through 2027. This means that if they fall short in any single year within that period, they could compensate during another year within the same timeframe.
Even though they are currently adhering to the targets, the Commission intends to examine the regulations concerning CO2 emission standards during the latter part of 2025, earlier than initially anticipated.
In the meantime, the Commission committed to supporting increased demand for European zero-emission vehicles and released a fresh proposal aimed at decarbonizing commercial fleet vehicles. 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. Additionally, European car manufacturers are facing pressure from Chinese competitors globally, which has also compressed their profit margins.
To assist European automakers in turning the situation around, the Commission committed to "maintaining fair competition" through various tools. This includes implementing anti-subsidy actions along with forging free trade deals.
The Commissioner designated India as one of the "like-minded" nations where the EU might establish 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."
"Ambitious steps are required to enhance infrastructure, provide demand incentives, and lower manufacturing costs for vehicles such as cars, vans, trucks, and buses," stated ACEA.
Sigrid de Vries, who serves as the Director General of ACEA, further commented: "This suggested flexibility in achieving CO2 goals over the next few years marks a positive initial move toward a more practical strategy for reducing emissions, influenced by current market conditions and geopolitical circumstances. This could provide manufacturers of cars and vans with some relief, assuming essential support from increased consumer interest and robust development of charging facilities."
E-Mobility Europe stated: "We are disappointed that the 2025 CO2 targets for Europe have been reduced, which could potentially hinder near-term electric vehicle sales, diminish 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 achieving zero emissions by 2035 today. Although the flexibility measures introduced add some ambiguity during this period, more than 11 million electric vehicles are already circulating on European streets, indicating that the shift towards sustainable transportation is firmly progressing."
In response to the frequent critique that insufficient charging stations hinder demand, she stated: "The electric vehicle charging infrastructure industry expands daily, offering faster speeds and enhanced, smooth EV charging experiences."
The main problem with the updated charging infrastructure is obtaining entry to the grid , which provides electricity.
This might require several months, or even up to a few years in certain instances.
To tackle this issue, the commissioner stated that Brussels plans to release recommendations for the member states aimed at reducing wait times.
The Commission is also considering making it obligatory for member states to prioritize these requirements, ensuring that permits can be processed more quickly.