EU Launches Strategic Dialogue to Support Struggling Car Industry
The European Commission is set to launch a strategic dialogue on Thursday to address the challenges facing Europe’s car industry. With economic difficulties and growing competition from China, the sector is under pressure to balance environmental goals with financial sustainability, CE Report quotes Agerpres
At the core of the crisis is the EU’s push for stricter CO2 emission limits, imposing fines on automakers failing to meet 2025 reduction targets. European manufacturers, struggling to increase electric vehicle (EV) sales, face intense competition from China, which sold 11 million EVs in 2024—up 40% from the previous year. In response, the EU introduced tariffs of up to 35% on Chinese EVs, triggering trade tensions with Beijing.
Germany, the EU’s largest car market, is particularly affected. The share of newly registered battery-electric vehicles in the EU dropped to 13.6% in 2024, while overall car sales saw minimal growth. Volkswagen anticipates a €1.5 billion fine for missing emissions targets and plans to ramp up EV sales to comply with regulations. Meanwhile, carmakers are urging the EU to cut taxes and reduce bureaucracy to support the industry.
Downsizing and job cuts have also hit the sector. Audi’s Brussels plant is set to close in February due to high costs, while Slovenia and Bulgaria report industry contractions. The industry is also bracing for potential tariffs from the U.S. under Donald Trump’s administration, which could significantly impact European exports.
In response to industry concerns, European Commissioner Stéphane Séjourné has promised measures to support demand for clean cars. The European Commission is expected to announce new initiatives in February, including incentives for fleet purchases and securing raw material supply chains.
The strategic dialogue, expected to last several months, aims to ensure the competitiveness of Europe's automotive sector while meeting climate goals.
