EU's automotive sector pushes for stronger environmental transformation plan

The European automotive industry is urging the European Union to accelerate the adoption of new technologies and revise its green transition strategy, as the current targets for CO2 emissions are no longer feasible without significant policy changes.

In a joint call to Commission President Ursula von der Leyen, Matthias Zink, President of the European Association of Automotive Suppliers, and Ola Källenius, President of the European Automobile Manufacturers' Association, have urged the EU to recalibrate its strategy ahead of the Strategic Dialogue meeting on 12 September.

The leaders of the automotive sector highlight the need for a more holistic policy framework that considers emission cuts in manufacturing and supply chains, addresses high manufacturing costs, and addresses burdensome tariffs such as the 15% duty on EU vehicle exports to the US.

The call for policy changes comes as the charging infrastructure in Europe remains uneven, and the industry faces near-total dependency on Asia for the battery value chain. The leaders stress that the sector is ready to invest in and deliver the technologies needed for decarbonisation, but the current EU framework lacks the flexibility and industrial perspective needed to make the transition viable.

The industry leaders advocate for technology neutrality, encompassing all technologies that can contribute to decarbonisation, including electric vehicles (EVs), plug-in hybrids, range extenders, highly efficient internal-combustion-engine vehicles, hydrogen, and decarbonised fuels.

To boost the industry's competitiveness, production capacity, and technological know-how, the leaders call for stronger demand-side incentives, such as purchase subsidies, tax cuts, and lower charging costs. They also call for policies that boost supply chain resilience in batteries, semiconductors, and raw materials, and fair treatment of plug-in hybrid vehicles (PHEVs) to prevent tightening rules on the electric driving 'utility factor' from giving a competitive advantage to non-EU manufacturers.

The letter to Ursula von der Leyen was jointly signed by the presidents of the European automobile manufacturers' and suppliers' associations: Ola Källenius (Mercedes), as president of ACEA (European Automobile Manufacturers' Association), and Matthias Zink, head of the drive systems division at Schaeffler and president of CLEPA (European Association of Automotive Suppliers). The letter was published on August 27, 2025.

The Strategic Dialogue on 12 September is seen as the EU's last chance to align its climate goals with industrial realities and prevent the transition from hollowing out the industrial base, jobs, and supply chain resilience.