President von der Leyen launched a Strategic Dialogue on the Future of the European Automotive Industry
The European Commission President Ursula von der Leyen has launched a Strategic Dialogue on the Future of the European Automotive Industry, designed to help Europe’s automotive industry become more competitive on the world stage.
To maintain a strong production base across the continent €1.8 billion to ensure the supply chain for battery raw materials and avoids strategic dependencies.
Further to this, a package of €1 billion for public-private investments will be backed by the Horizon Europe Programme running from 2025 to 2027.
Ursula von der Leyen, Commission President, said: “There is so much untapped potential at the global market, when it comes to innovation and clean solutions. I want to see our European automotive industry taking the lead.”
Concerns are growing about EU automotive companies falling behind on developing key technologies. In the global transition towards AI, being at the forefront of technological advancements.
Stakeholders from across the continent will be brought together through the action plan to help develop the next generation of vehicles, shared software, and digital hardware.
Large-scale testbeds along with regulatory ‘sandboxes’ will empower innovators with the freedom to test and refine their technologies.
von der Leyen added: “We will promote domestic production to avoid strategic dependencies, especially for batteries production. We will stick to our agreed emissions targets, but with a pragmatic and flexible approach. Our mutual aim is a sustainable, competitive, and innovative car industry in Europe that benefits our citizens, our economy, and our environment.”
Announcement of the Action Plan is joined with the Decarbonise Corporate Fleets Communication, outlining how member states can implement best practices for transitioning to create green corporate fleets, which currently accounts for 60% of new car registrations.
Amendments are to be announced to the CO2 Standards Regulations after the Commission recognised the ‘clear demand’ for more flexibility on CO2 targets, aiming to address the issue in a ‘balanced and equitable manner’.
If approved, the amendment will measure CO2 compliance targets as an average performance over a three-year period, 2025 to 2027, rather than on a yearly basis. This allows car manufacturers to mistargets in years one or two as long as high CO2 reduction is achieved in the remaining years.
New plans have not appeased all members of the industry, as Chris Heron, Secretary General for E-Mobility Europe, worries for the environmental and economic long-term impact that these changes will enduce. Changing legislation during implementation may also dissuade investors.
Heron, said: “Today’s proposal for three-year CO2 limit flexibility will significantly delay Europe’s electric vehicle roll-out across the next two years, risking around half a million fewer electric cars entering the EU market in 2025. That uncertainty is bad news for investors in EU charging infrastructure, battery production, and e-mobility overall".
Heron added: “We have big legal questions now. Changing the rules midway through 2025 is unfair for the automakers that worked to comply with the law in good faith. Europe slowing down its electric vehicle transition will leave the door wide open for China to continue as undisputed market leader, putting long-term job creation at risk.”
Incentives to switch to zero-emission vehicles will be laid out in the Commissions Action Plan, hoping to boost the demand for products and reward manufacturers. Concrete measures are being taken to strengthen consumer trust, such as improved battery health and repairability.
For the project to be a success, Europe must achieve cost-competitive EU cell production which can meet the demands of manufacturers on the continent whilst creating European value-added profit margins along the supply chain.
The EU battery industry is set to be aided through the Innovation Fund, which will finance direct production support to companies producing batteries and non-price criteria for components, such as resilience requirements.
Jointly launched Clean Industrial Deal and the European Fair Transition Observatory will look to address issues such as skills shortages, mismatches, and an ageing workforce. The two bodies will use data to analyse future ‘hot spots’ of employment dislocations and skills gaps.
Companies will be able to trigger support through the expanded European Globalisation Adjustment Fund for Displaced Workers (EGF) for workers facing immediate redundancy, with reskilling packages for employees who want to look for new opportunities.
Fierce global competition in the automotive industry has pushed the Commission to ensure a ‘level playing field’ by using trade defence instruments, including anti-subsidiary measures, to prevent European companies from being undercut by ‘unfair’ opposition.
