Automotive News Europe — 2025-09-12
Automotive Industry
The EU agreed to speed up measures to boost Europe’s automotive industry as it faces threats from Chinese competition, U.S. tariffs and a halting transition to electrification, but regulators did not grant immediate relief from a 2035 zero-emission mandate that the industry had sought.
European Commission President Ursula von der Leyen met with industry CEOs and other stakeholders in Brussels for several hours on Sept. 12 in the third phase of a “strategic dialogue.” The next meeting is expected before December.
Auto sector groups have said that the 2035 emissions target, which would effectively ban internal-combustion engines, is not feasible under current conditions.
The commission will now bring forward the review of its 2035 CO2 zero emission target to the end of this year, moving it up from the previously scheduled 2026, Reuters reported.
The main automakers’ lobbying group, ACEA, said it welcomed the “clear focus” of the talks. “We agree with the commission president that bold and fast action is required,” Ola Kallenius, ACEA president and CEO of Mercedes-Benz, said in a statement.
The group said “concrete steps” are urgently needed to make sure the CO2 regulations for cars and vans are “fit for reality.”
“We are positive to see the solution space is broadening, and confident the work of the next months will yield results,” Kallenius said.
CLEPA, the main suppliers’ lobbying group, called for a “substantial and timely revision of the CO2 regulation” and “true openness to all climate-neutral technologies” including easing rules for plug-in hybrids and roles for hybrids, extended-range EVs, hydrogen, and renewable fuels.
“There is also not much time, and we need to reach effective solutions in the coming months,” CLEPA President Matthias Zink, a Schaeffler executive, said in a statement.
Participants agreed to speed up implementation of an automotive “Action Plan” released in March. The plan gave automakers a three-year window to meet 2025 CO2 targets, laid out measures to ensure a “level playing field” against new rivals from China, seeks to boost EV demand, and build a European battery supply chain, among other things.
At the meeting, commissions and industry groups also signed a memorandum of understanding to speed up research and innovation across the EU “aiming to position Europe as a leader in sustainable and smart mobility.” The memorandum includes partnerships focused on zero-emission transport, connected and autonomous mobility, and the EV battery value chain.
Vans could be a focus of zero-emission review
The review of the 2035 zero-emission target will take a specific look at vans, a member of Commission Executive Vice-President Stephane Sejourne’s team told Reuters. Electric vans have a market share of only 8.5 percent of all new vans sold in the EU, about half the share for electric cars.
The details of a new proposal on 2035 the target are yet not clear, but it could include CO2-neutral fuels, such as biofuels that could continue to power internal combustion engines, plug-in hybrids or range extenders.
With EV sales lagging predictions, automakers say they cannot meet the 2035 target unless they have some flexibility on technology.
Renault, Stellantis proposal for small car rules gains momentum
Another area that regulators said they will consider is a new category for small, affordable electric cars, which might benefit from lower tax treatment and earn extra credits towards meeting CO2 emission reduction targets.
Renault and Stellantis have pushed for the separate small-car rules, and Von der Leyen expressed support for the proposal this week.
Former Renault Group CEO Luca de Meo and Stellantis Chairman John Elkann said in a joint interview in May, published in the French newspaper Le Figaro, that EU car sales were at disastrous levels and that having specific regulations for smaller cars was a “strategic” matter.
“At this rate, if the trajectory does not change, we will have to make some painful decisions for our production base over the next three years,” Elkann said.
Von der Leyen on Sept. 10 called for an “E-car” for Europe that would be “clean, efficient and lightweight”; affordable; and built in Europe with European supply chains.
Fleet rules, local content requirements, Chinese investment also weighed
New proposals could come alongside planned legislation to decarbonize corporate fleets, which make up about 60 percent of new car registrations in the 27-nation EU, Reuters said.
Other priorities include setting local content rules for batteries and vehicle components and conditions for investment by foreign manufacturers and equipment suppliers, particularly from China, the Sejourne team member said.
Chinese investments have increased since the EU imposed import duties on EVs from China, but the bloc does not want these simply to involve final assembly of multiple parts or “knockdown” car kits and batteries coming from China.