European automotive industry: EU Commission wants to boost global competitiveness

Brussels, 5 March 2025

Questions and answers on the Commission unveiling the Action Plan to drive innovation, sustainability, and competitiveness in the automotive sector

Brussels, 5 March 2025

Why is the Commission presenting an industrial Action Plan for the European automotive sector?

The European automotive sector is facing a critical turning point, with rapid technological changes and increasing competition posing significant challenges. In order to be globally competitive, the European automotive industry must urgently regain a leadership position in the transition towards smarter (AI-powered), cleaner, and more connected vehicles. The EU needs to further ramp up its own industrial capacities for batteries and their components as well as the software and technology needed, notably for autonomous vehicles.

The Action plan builds on the Strategic Dialogue on the Future of the European Automotive Industry, a collaborative and inclusive process, launched by President von der Leyen in January 2025.  Building on feedback received during this Strategic dialogue, the Action Plan will support the entire automotive industry’s transition to clean, connected, and increasingly automated vehicles, to guarantee its international competitiveness. To achieve this, the Plan will address five key priorities:  1) innovation and digitalisation, 2) shift to clean mobility, 3) ensuring competitiveness and supply chain resilience, 4) improving skills and addressing the social dimension, 5) guaranteeing a level playing field and a competitive business environment.

How does this plan help European automotive manufacturers stay competitive?

The Action Plan is designed to enhance the competitiveness of European automotive manufacturers by promoting greater collaboration and improving overall enabling conditions, including targeted financing and regulatory simplification. The Action Plan aims to make electric vehicle battery cells and components produced in the EU cost-competitive in the short term. The plan includes several measures, such as a comprehensive “Battery Booster” package, which aims to support the production of battery cells and components through direct funding and non-price criteria for components.  Legislation to be introduced later this year will specify the local content requirements for batteries and their components.

A“European Connected and Autonomous Vehicle Alliance” will bring together a critical mass of European automotive stakeholders to shape and deliver the development of shared hardware and software components, and a common architecture for connected and autonomous vehicles.

The Commission will further develop the regulatory framework for autonomous vehicles, starting with allowing the approval of large series of vehicles with automated parking systems in 2025 and more use cases in 2026, ensuring their safety for passengers and other road participants.

To accelerate the development of autonomous driving technologies, the Commission will also establish refined rules for pre-deployment testing of Automated Driving Systems (ADS) and advanced driver assistance systems (ADAS) on public roads. Additionally, dedicated testbeds and regulatory sandboxes will be created, enabling large-scale pilot deployments of autonomous vehicles for both passenger and goods transport.

By providing a supportive environment for innovation and development, the Action Plan will help European automotive manufacturers stay competitive in the rapidly evolving global market.

What role does the Action Plan have in fostering innovation?

Building on the preparatory work done through the European Vehicle of the Future Initiative, the European Connected and Autonomous Vehicle Alliance will develop a comprehensive suite of solutions.

At the heart of this initiative is the development of a Software Platform for Software-Defined Vehicles, which will use state-of-the-art open-source software applied in real-life use cases.  Additionally, the alliance will create an in-vehicle computing architecture for Software-Defined Vehicles that is adaptable, flexible, energy-efficient, and capable of real-time performance, while integrating advanced AI-processors. Innovative AI solutions will also be developed, specifically tailored for the automotive industry, such as transitioning to autonomous driving, optimizing battery management and charging infrastructure, and AI-driven predictive maintenance.

Furthermore, a distributed pilot facility will be established to enable industry stakeholders to collaboratively mature these technologies and prepare for demonstrating their full integration in a European digital vehicle under real-life conditions.

The activities of the Alliance as well as the Next-gen battery technology will be supported by joint public and private investment under relevant partnerships of Horizon Europe. The Programme will make €1 billion available for the automotive sector for the period 2025-2027, including relevant activities financed via the European Innovation Council.

To accelerate the development and innovation in the field of autonomous driving technologies, the Commission will also establish refined rules for pre-deployment testing of Automated Driving Systems (ADS) and advanced driver assistance systems (ADAS) on public roads. Additionally, dedicated testbeds and regulatory sandboxes will be created, enabling large-scale pilot deployments of autonomous vehicles for both passenger and goods transport.

How does the plan ensure European leadership in battery technology and production?

The proposed plan aims to make electric vehicle battery cells and components produced in the EU cost-competitive in the short term. The plan includes several key measures, such as a comprehensive “Battery Booster” package, which aims to support the production of battery cells and components through direct funding, non-price criteria for components and competitive loans. Legislation to be introduced later this year will specify the local content requirements for batteries and their components.

The Commission will support the development of next-generation batteries through the BATT4EU partnership, as part of the Horizon Europe program, with a focus on the whole value chain, for years 2025-2027.

Additionally, the plan proposes the establishment of a “Battery Raw Materials Access Entity”. This entity will help car manufacturers get the raw materials they need by pooling their commitments and investments. The Commission will support this entity, making it easier and cheaper for companies to access the materials they need.

The plan also aims to speed up the permitting process for battery materials refining, going beyond the already identified Strategic Projects under the Critical Raw Materials Act and provide more support for recycling, including funding for recycling facilities. The Commission will also provide additional support to enhance cooperation in battery recycling amongst industry.

What specific incentives will be introduced to boost the uptake of zero-emission vehicles?

The Commission will work with all Member States to exchange best practices and lessons learnt on incentives schemes for consumers, including taxation. This will result in a Commission Recommendation, which will also outline potential funding sources that Member States can use to support such incentives.

The Commission will promote the adoption of social leasing schemes for new and used zero-emission vehicles through its upcoming Recommendation on Transport Poverty, set to be adopted in Q1 2025. This Recommendation will encourage Member States to integrate such schemes into their national plans under the Social Climate Fund, making sustainable transport more accessible to all. Social leasing (and notably schemes for the rental or leasing of zero-emission vehicles targeted at vulnerable groups) are also covered by the Guidance on the Social Climate Plans, which the Commission adopts on the same day as this Communication.

The Commission is also publishing a Communication on clean corporate fleets alongside this Action Plan, covering both passenger and commercial vehicles. This communication provides suggestions for national, regional, and municipal authorities to speed up the uptake of zero-emission vehicles, with a legislative proposal to follow in the future.

How will the EU respond to potential trade imbalances and unfair subsidies from foreign competitors?

Openness to trade is fundamental for EU competitiveness. Our trade agreements play a key role in ensuring that European companies have better access to foreign export markets as well as to the necessary inputs, such as critical raw materials and new technologies. Securing access to third-country markets is not merely beneficial but imperative for the EU’s sustained prosperity.

This being said, the EU faces increasing pressure from international competitors employing assertive strategies to dominate the industry, raising the stakes for our own competitiveness.

The EU is not a naive trader. While we pride ourselves on maintaining an open economy, we remain vigilant against any attempts to exploit this openness. Clear limits need to be set against uncompetitive practices. The EU stands ready to act to level the playing field and protect the EU market and the EU economic security when needed.

Will the EU impose conditions on foreign companies who want to invest in the EU?

The Commission will work to ensure that foreign investments in the automotive sector contribute to the long-term competitiveness of EU industry, its technological edge and economic resilience, and the creation of quality jobs in the EU. The Commission will explore with Member States and the industry how to best articulate conditions for inbound foreign investments in the automotive sector.

These could include, for example, joint venture requirements, senior management requirements, facilitating agreements that support the needs of EU industry (such as off-take or license services and royalty agreements with foreign partners), licensing of technology or intellectual property, commitments to supply critical inputs, and commitments to increase added value for the EU economy.

How will the Action Plan make clean mobility more affordable and accessible?

The demand-support measures will help increase demand for electric vehicles, making them cheaper to produce and more affordable for consumers.

In addition, the Commission will promote the adoption of social leasing schemes for new and used zero-emission vehicles through its upcoming Recommendation on Transport Poverty, set to be adopted in Q1 2025. This Recommendation will encourage Member States to integrate such schemes into their national plans under the Social Climate Fund, making sustainable transport more accessible to all. Social leasing (and notably schemes for the rental or leasing of zero-emission vehicles targeted at vulnerable groups) are also covered by the Guidance on the Social Climate Plans, which the Commission adopts on the same day as this Communication.

Furthermore, the Commission will review the Car Labelling Directive following an evaluation to be published in the first half of 2025.

This review will provide consumers with more accurate and comprehensive information about the environmental impact of their vehicle choices. Additionally, the Commission will increase its support to Member States in rolling out public and private charging infrastructure, including financial assistance, to ensure easy, affordable, and timely access to the grid. The Commission will also support Member States in speeding up the implementation of the Alternative Fuels Infrastructure Regulation (AFIR), for the provision of public charging points, and the Energy Performance of Building Directive for private charging points, such as those at home or in the workplace.

The Commission will work with Member States on a European Clean Transport Corridor initiative that will fast-track the deployment of heavy-duty vehicle charging hubs along key logistics corridors in the TEN-T as critical infrastructure, including in the related urban nodes and their multimodal freight terminals. This initiative will be done under the Competitiveness Coordination Tool that was presented in the Competitiveness Compass, and will focus on streamlining of permitting, leveraging financing to de-risk investments, and linking to the provisions for specific grid priority areas under the Renewable Energy Directive.

Furthermore, the Commission will help Member States deploy smart and bi-directional charging technologies, which, combined with real-time energy pricing, will make sustainable transportation more accessible and affordable.

What improvements can citizens expect in charging and refueling infrastructure?

Citizens already have good access to recharging infrastructure in many parts of the European Union. In fact, over the last two years recharging capacity grew more than 30% faster than vehicle uptake. The availability of recharging options has significantly improved since 2021, with the market now providing more comprehensive coverage to meet the needs of the existing vehicle fleet in 2024. However, the deployment of recharging infrastructure is not equally developed across the Member States and their regions.

The Alternative Fuels Infrastructure Regulation (AFIR) plays a significant role in driving further rollout, by setting binding targets for the deployment of recharging infrastructure and ensuring recharging infrastructure grows at least at the same pace as vehicle take up.

Higher power output enables charging points to serve multiple vehicles simultaneously, increasing the overall capacity and efficiency of the charging network.

To achieve seamless and even wider coverage, the rollout of recharging infrastructure must be accelerated to keep pace with the rapidly growing demand for electric vehicles. To address this challenge, the Commission will collaborate with Member States to streamline planning and permitting processes, leveraging various measures outlined in this Action Plan.

How will the Action Plan protect jobs in the automotive sector during the transition?

At the heart of this Action Plan is a commitment to ensuring a fair and socially equitable transition in the automotive sector, prioritizing high-quality jobs and supporting workers through the changes ahead.

To address the employment challenges that come with this transition, including job losses and skills gaps, the EU has already put in place various initiatives, such as funding from the European Social Fund Plus (ESF+) and the European Globalisation Adjustment Fund for Displaced Workers (EGF), as well as skills development programs that support workers during this ongoing transformation.

Building on these efforts, the Commission will introduce additional measures to protect jobs and address skills needs, working closely with Member States, social partners, and other stakeholders. The European Fair Transition Observatory, which will gather and analyze data to identify potential “hot spots” of employment disruption and inform targeted interventions.

To provide better support for workers affected by the transition, the Commission will propose a targeted amendment to the EGF Regulation, making it faster, more comprehensive, and allowing support even before layoffs occur for workers threatened with immediate job loss. Additionally, the Commission will reinforce the framework for sectoral skills initiatives in strategic industries, including the automotive sector, with grants financed through Erasmus+.

In line with the Union of Skills, the Commission will also work with social partners and Member States to highlight the opportunities offered by ESF+ and expand its impact, including support for workers seeking to reskill and transition out of the automotive sector.

Furthermore, the Automotive Skills Alliance (ASA) is the partnership for collaboration set up under the Pact for Skills. The partnership provides support in the green and digital transformation of the sector, by upgrading the skills of workers so that jobs and innovation stay in Europe.

What funding and incentives are available for businesses investing in clean mobility?

The Action Plan is not primarily about financing but about providing the right framework conditions for the value chain transition. This Action Plan aims to optimize the use of existing funding programs for vehicle purchases, recharging infrastructure deployment, and battery production.

For example, social leasing schemes as well as infrastructure roll out can be implemented and financed by Member States under the Social Climate Fund, Resilience and Recovery Fund, and cohesion policy instruments. Recharging infrastructure along the main European transport corridors can be financed through the existing Alternative Fuels Infrastructure Facility (AFIF).

What funding is available for recharging infrastructure deployment?

The Alternative Fuels Infrastructure Facility (AFIF) has allocated approximately €2.2 billion for the development of alternative fuels infrastructure, including recharging infrastructure, from 2022 to 2025. To date, around €1.7 billion has been committed, supporting the financing of over 27,000 fast recharging points for cars and trucks. Building on this momentum, the Commission will make another €570 million available under the Alternative Fuels Infrastructure Facility to projects for the roll-out of alternative fuels infrastructure in 2025 and 2026 with a particular focus on HDVs. It will specifically focus on the deployment of fast recharging points dedicated to heavy-duty vehicles, to continue driving the growth of sustainable transportation infrastructure. 

What regulatory changes will streamline the approval processes for new automotive technologies?

To be globally competitive, the European automotive industry must urgently regain a leadership position in the development of software-enabled, AI-powered connected and automated driving vehicles.

To achieve this, the Commission is proposing several key measures, including the establishment of Automated Driving Corridors, large-scale cross-border testbeds and regulatory sandboxes for automated driving vehicles, starting in 2026. Additionally, targeted amendments to the type-approval framework will be made to allow for the approval of unlimited series of vehicles with automated parking systems in 2025 and more use cases, such as hub-to-hub freight transport, in 2026.

Furthermore, a proposal for harmonised permitting procedures will be launched in early 2026 to facilitate the testing of Automated Driving Systems on open roads across Europe. The Commission will also establish a European Connected and Autonomous Vehicle Alliance in 2025 to support the development of software, hardware, AI, and other critical components for connected and autonomous vehicles.

Moreover, the Commission will introduce measures on access to vehicle data, functions, and resources in 2025, enabling the faster development of digital automotive services such as smart charging of electric vehicles, remote diagnostics, car sharing, mobility as a service, and fleet management.

How will the EU secure raw materials and strengthen supply chains? 

To ensure a stable and secure supply of critical raw materials for the European automotive industry, the Commission is proposing several key measures. In March 2025, under the Critical Raw Materials Act (CRMA), a list of Strategic Projects will be announced, covering the production of battery raw materials at all stages of the value chain. These projects will benefit from streamlined permitting procedures and access to finance, and offtake agreements will be facilitated.

In addition, the Commission encourages Member States to expand the streamlined permitting procedures for battery materials refining, beyond the already identified Strategic Projects in the context of the Critical Raw Materials Act. A platform for the critical raw materials supply/demand aggregation will also be established in 2025, and a “Battery Raw Materials Access Entity” will be created to support the development of a stable and secure supply chain. The Commission is also working with international partners to support joint investments along the critical raw materials value chain, including through the 14 strategic partnerships on raw materials, such as the EU-Canada strategic partnership, which has secured around €10 billion of mutually reinforcing investments along the battery supply chain.

To support domestic manufacturing of key vehicle components, any public support benefiting the automotive industry will be made conditional on resilience and sustainability criteria, as part of the upcoming Industrial Decarbonisation Accelerator Act. This approach will also be essential for the production of vehicle components for the growing defense markets. Furthermore, the Commission will introduce a new State aid Framework that will enable Member States to offer incentives to private investors who invest in projects related to the production of batteries and other key components for electric, connected and automated vehicles.

In addition, the Commission has also updated today the List of Waste to promote the circular economy and secure critical raw materials, by ensuring that batteries and their valuable components remain in the EU for longer. A key aspect of this update is the classification of shredded battery waste, known as “black mass”, as hazardous waste. As a result, the export of black mass to non-OECD countries is automatically banned under the Basel Convention, which prohibits the export of hazardous waste to these countries. This means that black mass will either be recycled and reused within the EU or traded with OECD countries, supporting the EU’s strategic autonomy and security of supply for raw materials. By clarifying the classification of black mass, the Commission aims to enhance control over its shipment and handling, in line with the Waste Shipment Regulation. This decision aligns with the objectives of the Battery Regulation, which seeks to shift towards a circular economy, increase the security of supply for raw materials and energy, and promote the EU’s strategic autonomy. The European List of Waste plays a crucial role in managing waste in the EU, identifying and classifying different types of waste, including hazardous waste, to protect human health and the environment.

What support is provided for SMEs in the automotive sector?

To support the competitiveness and innovation of small and medium-sized enterprises (SMEs) in the automotive industry, the Commission is proposing several initiatives.

Firstly, the European Connected and Autonomous Vehicle Alliance will focus on common architecture elements, shared European hardware and software building blocks, and their standardization, providing SMEs with opportunities to collaborate and innovate.

Second, the Commission will support the technical work of Member States to identify a possible Important Project of Common European Interest (IPCEI) candidate for clean, connected, and autonomous vehicles. This initiative will ensure that innovative SMEs have access to funding and resources, enabling them to participate in the development of cutting-edge technologies and stay competitive in the market.

Furthermore, measures will be taken to improve the health and repairability of electric vehicle batteries, which will benefit SMEs that operate in the vehicle repair business. In addition, the Commission will take measures on access to vehicle data in 2025, which will enable the faster development of digital automotive services such as smart charging, remote diagnostics, and car sharing. This initiative aims to open up innovation and business opportunities for companies in the broader automotive ecosystem, including SMEs, who represent a significant share of the sector.

By simplifying regulations, improving battery repairability, and facilitating access to vehicle data, the Commission aims to create a more favorable business environment for SMEs in the automotive industry, enabling them to innovate, grow, and compete more effectively in the market.

How does this plan help Member States meet climate and emissions targets?

To achieve the EU’s ambitious climate and emissions targets for 2030 and 2050, the transport sector must undergo a significant transformation, with a focus on reducing emissions by at least 90% by 2050. Given that road transport is the largest contributor to transport emissions, air pollution, and fossil fuel imports, compromising the EU’s strategic independence, it is the primary area that needs to be addressed. The Automotive Action Plan plays a crucial role in supporting Member States in meeting their climate and emissions targets by promoting the adoption of efficient, zero-emission vehicles. These vehicles are essential in helping the EU meet its overall CO2 emissions reduction target of 55% by 2030, as well as specific targets set by the Effort Sharing Regulation and the Emission Trading Scheme for transport. The Plan also supports the implementation of the EU’s Energy Efficiency objectives.

To facilitate the market uptake of zero-emission vehicles, the Commission will improve the enabling conditions, including charging infrastructure and battery technology development. This will involve:

• Issuing Guidance and Recommendations to Member States on prioritizing recharging points grid connections and reducing waiting times, drawing on best practices from across the EU.
• Fast-tracking the deployment of heavy-duty vehicle charging hubs along key logistics corridors through the European Clean Transport Corridor initiative.
• Working with Member States to establish a conducive framework for smart and bi-directional charging.
• Taking complementary actions to enable the scale-up of a competitive European battery cell and component manufacturing industry.

The EU is putting a strong focus on battery innovation through the Horizon Europe partnership BATT4EU. This focus remains important. The Commission will continue to support the entire EU value chain, from development to recycling, in close collaboration with key partnerships in advanced manufacturing and materials. To accelerate progress, a dedicated budget of approximately €350 million has been allocated for the period 2025-2027, as part of the broader Horizon Europe funding for the automotive sector.

What role will national governments play in implementing the Action Plan?

National governments have a pivotal role to play in making the Action Plan a success. While EU action can set the overall regulatory framework it will be up to Member States to ensure that this framework is efficiently implemented. This is for example true with regards to accelerated permitting and grid connection procedures for recharging points. They will also play an important role when it comes to the distribution of financing to the key pillars of the automotive Action Plan, for example through the Social Climate Fund for social leasing schemes or recharging points.

Does the Action Plan foresee any flexibility to support car manufacturers in meeting CO2 Standards?

The EU wide zero CO2 emissions for new cars and vans in 2035 targets stays the same. However, the Commission has taken note of the clear demand for more flexibility in relation to CO2 targets and is committed to addressing this issue in a balanced and equitable manner. The Commission will therefore swiftly present additional flexibilities, through a targeted amendment of the CO₂ emission performance standards for cars and vans.

The amendment, if adopted, would enable car manufacturers to meet their compliance targets by averaging their performance over a three-year period (2025-2027), allowing them to offset any shortfalls in one or two years with excess achievements in the other year(s), while keeping the overall ambition on the 2025 targets. The Commission calls on the co-legislators to reach an agreement on this amendment without delay, as this would create certainty for the sector. As mentioned in the Commission’s Political Guidelines, the CO2 emission performance standards regulation for cars and vans creates predictability for investors and manufacturers. The European Commission will accelerate work on the preparation of the foreseen review of the Regulation. The review will be based on a fact-based analysis, taking into account all relevant technological developments, and the importance of an economically viable and socially fair transition towards zero-emission mobility.

More information

• President von der Leyen Political Guidelines
• Communication: Industrial Action Plan for the European automotive sector  
• Communication – Decarbonise Corporate Fleets
• Press release – Commission boosts European automotive Industry’s global competitiveness  
• Factsheet – Action Plan on the future of the automotive sector
• Factsheet – Decarbonise Corporate Fleets
• Competitiveness Compass
• Clean Industrial Deal

 Source – EU Commission

Remarks by Commissioner Tzitzikostas at the Press Conference on the Industrial Action Plan for the European Automotive Sector and Decarbonizing Corporate Fleets

Brussels, March 5, 2025

We have just adopted an Industrial Action Plan for the Automotive Sector, a strategic initiative aimed at keeping Europe’s carmakers, suppliers, and related service sectors innovative, competitive, and firmly anchored in Europe. This industry contributes 7% to the EU GDP and employs approximately 13.8 million people, both directly and indirectly.

However, the challenges facing the sector go beyond mere figures. The automotive industry is a vital part of Europe’s history and a source of pride, yet today it faces serious threats. Supply chain risks, high energy costs, staff shortages, increasing protectionism, and an over-reliance on imported supplies are placing immense pressure on the sector. European companies are also falling behind in key strategic technologies such as batteries, software, and autonomous driving.

Before formulating this action plan, I engaged extensively with industry stakeholders, including manufacturers, suppliers, and experts. I listened to their concerns, noted their ideas, and built relationships that will continue beyond today’s announcement. This is just the beginning of our journey, but it is a significant step forward.

Five Game-Changing Areas of the Action Plan

The plan introduces flagship initiatives in five transformative areas:

1. Innovation and Digitalization
2. Clean Mobility
3. Competitiveness and Supply Chain Resilience
4. Skills Development
5. Ensuring a Level Playing Field

Financial Support to Drive Change

To turn our ambitions into reality, the EU is mobilizing substantial financial support:

• €50 billion under InvestEU for clean tech and clean mobility.
• €1.8 billion from the Innovation Fund for battery manufacturing.
• €1 billion from Horizon Europe for connected and autonomous vehicle development.
• €570 million under the Alternative Fuels Infrastructure Facility for expanding charging stations, particularly for trucks.
• €90 million from Erasmus+ to support workforce training.
• Additional funding for SMEs to strengthen innovation and growth.

Innovation and Digitalization: The Foundation of the Future

Innovation and digitalization are at the core of our vision for a stronger European automotive industry. We need more R&D investment, faster market deployment of technological breakthroughs, and a resurgence in European leadership in AI-powered, connected, and automated vehicles.

Regulatory frameworks must also keep pace with technological advancements. At present, no country has a complete rulebook for autonomous vehicle deployment, yet China and the US are ahead in on-road testing and commercial operations. The EU’s Single Market provides a unique advantage. By 2025, we will harmonize legislation, including the requirement for all new vehicles to have automated parking systems. Additionally, large-scale, cross-border testbeds will be established to assess traffic implications, while a European Connected and Autonomous Vehicle Alliance will focus on cutting-edge software, in-vehicle computing, and AI solutions.

Clean Mobility: A Balanced and Pragmatic Approach

The EU’s emission standards for new cars and vans will remain in place to provide long-term investment certainty. However, we recognize the need for pragmatism. Instead of requiring annual compliance, companies will now have a three-year period (2025-2027) to meet targets. This flexibility ensures that underperformance in one year can be compensated in the subsequent years.

Furthermore, to accelerate electric vehicle (EV) adoption, we will introduce legislation on corporate fleets, which currently account for 60% of EU car registrations. These vehicles have higher mileage and enter the second-hand market faster, making them a critical segment in the transition to zero-emission mobility.

Additionally, Member States are encouraged to implement tax benefits for zero-emission vehicles, regulate taxis and car-sharing services based on emissions, and promote social leasing schemes to ensure that all citizens, regardless of income, can access clean mobility options. To support infrastructure, alongside the €570 million for charging stations, we will soon publish recommendations on reducing grid connection waiting times.

Competitiveness and Supply Chain Resilience

A key component of competitiveness is battery production, which accounts for 30-40% of an electric car’s value. Europe must develop its own supply chain to remain competitive. To achieve this, we are exploring European content requirements for batteries and their components, ensuring a secure and sustainable supply.

Additionally, the Clean Industrial Deal presented by the Commission last week includes the establishment of a Critical Raw Materials Centre by 2026. This center will provide automotive players with access to lower-cost materials, further reducing dependency on external suppliers.

Skills and Employment: A Fair Transition for Workers

The social dimension of this transition cannot be overlooked. Plant closures, economic shocks, and geopolitical uncertainties have impacted jobs in the automotive sector. At the same time, our workforce is aging, and we must attract new talent with the digital skills needed for future mobility.

To address this, the European Fair Transition Observatory will monitor employment trends across the industry and anticipate risks. We also plan to revise the European Globalization Adjustment Fund, which currently supports laid-off workers, to extend assistance to companies undergoing restructuring, thereby reducing the need for job losses in the first place.

A Global Perspective: Ensuring a Level Playing Field

Market access, critical materials, and fair competition are vital for the sector’s global competitiveness. The EU will continue to pursue Free Trade Agreements and strengthen international partnerships to secure fair market conditions for European manufacturers.

Conclusion: A Future Built on European Innovation and Values

This Industrial Action Plan is designed to ensure that the next generation of vehicles is not just manufactured in Europe, but also designed, developed, and powered by European technology, built upon European values.

We will de-risk supply chains, build new capacities, and balance long-term certainty with pragmatic policymaking. Our political, economic, and regulatory support will be steadfast and forward-looking.

The decisions we make today will determine whether Europe’s automotive industry continues to thrive as it has in the past. This is only the beginning. Together, we will build a resilient, competitive, and sustainable automotive sector that truly embodies the spirit of European excellence.

Thank you.

Source – EU Commission