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 obstacles.

On Wednesday, Apostolos Tzitzikostas, who serves as the Commissioner for Sustainable Transport and Tourism, unveiled the plan.

The document outlines five key programs aimed at bolstering the struggling automobile sector, an industry that constitutes 7% of the EU’s gross domestic product and supports approximately 14 million jobs throughout the European Union.

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 battery raw materials.

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 when it comes to producing batteries," stated Commission President Ursula von der Leyen on Wednesday.

Moreover, the European Commission highlighted the importance of European automotive companies becoming frontrunners in producing AI-driven, interconnected, and autonomous vehicles. In order 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 provides additional measures to enhance the skills of workers in the sector and pledges further assistance to small and medium-sized enterprises (SMEs).

Greater flexibility but largely unaltered clean mobility objectives

The Commission remains committed to its clean mobility goals, firmly establishing the limits on emissions that newly manufactured cars and vans will be allowed to emit in 2025, 2030, and 2035.

At present, the aim is to gradually reduce emissions from newly manufactured vehicles up until 2035, after which 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 with electric vehicle sales decelerating across Europe, the Commission pledged to introduce an updated revision.

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 not meeting the target in one particular year during that period by exceeding it in another.

Even though they are presently adhering to the targets, the Commission intends to examine the regulations concerning CO2 emissions standards during the latter part of 2025, earlier than initially anticipated.

In the meantime, the Commission committed to assisting in increasing the demand for European zero-emission vehicles and released a fresh proposal aimed at decarbonizing commercial fleets. Such fleets account for 60% of new vehicle registrations.

Enhancing the position of European automakers on the international market

The United States is warning Europe about imposing a 25% trade tariff, posing a significant risk to the region’s automobile sector. Additionally, European car manufacturers are feeling pressure from Chinese competitors globally, leading to reduced 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 forge advantageous trade deals.

Diverse responses from the sector regarding the Action Plan have been observed.

The European Automobile Manufacturers' Association (ACEA) stated that although they supported the action plan, "certain crucial components are still absent."

"Ambitious steps must be taken to enhance infrastructure, provide demand incentives, and implement cost-reduction strategies for manufacturing of vehicles including cars, vans, trucks, and buses," stated ACEA.

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, shaped by current market conditions and geopolitical factors. This offers potential relief for manufacturers of cars and vans, as long as essential support like increased consumer demand and adequate charging facilities become reality."

E-Mobility Europe stated: "We are disappointed that the 2025 CO2 targets in Europe have been reduced, which could potentially discourage near-term electric vehicle purchases, decrease investment certainty, and adversely affect top-tier companies."

Lucie Mattera, the Secretary General of ChargeUp Europe, voiced her concerns as well, stating: "The European Commission has reaffirmed the target for zero emissions by 2035 today. Although the added flexibility introduces some ambiguity during this transitional period, more than 11 million electric vehicles are already circulating across European streets, indicating that the shift towards cleaner transportation is firmly in progress."

Addressing the frequent complaint about insufficient charging stations, which hampers demand, she stated: "The electric vehicle charging infrastructure industry expands daily, offering faster speeds and enhanced, hassle-free EV charging experiences."

The main problem with the updated charging infrastructure is gaining entry to the grid , which provides electricity.

It might require several months, possibly even 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 permit approvals can be expedited.