According to foreign media reports, the EU recently announced an action plan for the automobile industry, hoping to increase the EU’s demand for electric vehicles and plans to set localized production ratio requirements for electric vehicle battery production.
The EU implementing body has proposed a draft proposal to ensure EU automakers can electrify and compete with more technologically advanced Chinese and American competitors.
The draft advises 27 EU member states on what actions they can take to accelerate the electrification of corporate vehicle fleets, which account for about 60% of the EU new car market. The EU implementing body will also work with member states to assess how consumers can best incentivize purchases of electric vehicles and provide subsidy funds, while proposing that road tolls should be exempted from zero-emission heavy vehicles.
The European Commission’s draft document mentioned that the European automotive industry is at risk of losing market share in the electric vehicle sector, and that Europe costs much more than its competitors in terms of electric vehicle components, especially batteries, which typically account for 30 to 40% of the value of an electric vehicle.
The draft said that for electric vehicles sold in the EU, the proportion of batteries and parts produced in Europe will be gradually increased.
The EU Executive Committee will also consider providing support to companies producing batteries in the EU. Foreign companies may also receive support, provided they work with EU companies in order to achieve sharing of expertise and technology. The European Commission also plans to put forward conditions for foreign inbound investment in the automotive industry and will study financial support for battery recycling facilities.
According to the European Automobile Manufacturers Association (ACEA), sales of electric vehicles in Europe fell by 5.9% in 2024, which said that imperfect charging infrastructure is partly due. Germany’s sudden cancellation of electric vehicle subsidies and the lack of affordable electric vehicle models have also caused the decline in sales.
In addition, EU automakers are also hit by factory closures and are now preparing for the response to U.S. tariffs. To alleviate the pressure, automakers urge the European Commission to exempt carbon emission fines. They said that if companies fail to meet new CO2 emission restrictions in 2025, fines could be as high as 15 billion euros ($15.6 billion).
Under pressure from automakers, the EU has decided to give automakers three years of buffering to meet new carbon dioxide emission targets for automobiles and vans, rather than requiring compliance in 2025. Now, compliance will be determined based on the average emissions from automakers between 2025 and 2027. However, the proposal still needs to be approved by EU governments and the European Parliament.
Italy and the Czech Republic, which have been pushing for easing emission penalties, welcomed this decision, but some institutions have also put forward different views. Julia Poliscanova, senior director of vehicle and electric mobility at European research firm T&E, said the carbon emissions target is a major measure to encourage automakers to electrify to help the European electric vehicle industry catch up with China. “The plan should not create uncertainty (by removing carbon emission fines) but should stick to those promising measures to enable electrification of corporate fleets and localize battery manufacturing,” she said.