Utilizes cookies to enhance user experience on Autovista24 platform
The European Commission has announced a comprehensive new Industrial Action Plan for the EU's automotive sector, aiming to accelerate the transition towards cleaner vehicles and strengthen the industry's competitiveness.
The plan, unveiled in March 2025, focuses on three key areas: tighter CO2 emissions targets, support for zero-emission vehicles (ZEVs), and strengthening battery recycling and circularity in the supply chain.
CO2 Emissions Targets
The plan introduces a three-year CO2 performance averaging framework, encouraging automakers to progressively reduce emissions from new vehicles by averaging emissions across their fleets. This approach fosters a smoother transition instead of abrupt targets, providing a more manageable path for the industry.
Zero-Emission Vehicles (ZEVs)
To boost the market share of electric vehicles, the plan supports policies and incentives to increase EV adoption. Despite recent slowdown due to subsidy reductions in leading markets like Germany and France, early 2025 data shows a rebound in EV sales, especially in the UK and Italy, indicating resilience amid evolving market conditions.
Battery Production and Recycling
The plan emphasizes boosting Europe's battery industry capabilities by encouraging partnerships with battery startups and cooperation with Asian manufacturers to develop advanced EV battery technologies and scale production. This industrial strategy underlines the goal of achieving technological sovereignty. Moreover, it supports circular economy initiatives focusing on battery recycling to secure raw materials and reduce waste.
In addition, the plan brings together 12 partners to work on innovative battery recycling technologies, aiming to recover 95% of critical metals from electric vehicle batteries.
Other Notable Developments
Volvo has launched its ES90 model, the first Volvo car featuring 800-volt technology, enabling a longer range and faster charging. Volkswagen has revealed the ID. Every1 concept car, an affordable battery-electric vehicle planned to retail at €20,000 and go into production in 2027. Audi has revealed the new A6 Avant, featuring the company's mild-hybrid plus system and an aerodynamic drag coefficient of 0.25.
Mercedes-Benz has received approval for special marker lights as part of its automated driving tests in Germany, valid nationwide until July 2028. MG has teased its upcoming S5 EV, an electric SUV due to arrive in Spring 2025, built on the carmaker's Modular Scalable Platform.
The plan also aims to grow the level of skilled workers in the automotive industry and improve the competitiveness of the European automotive market globally.
The tariff exemption is for cars made in North America that comply with the continent's existing free trade agreement. US President Donald Trump will exempt some carmakers from his plans to enforce tariffs of 25% on all goods coming from Mexico and Canada.
Volkswagen plans to unveil nine new models by 2027, including four electric vehicles, based on the new architecture. The European Commission's extended compliance period for CO2 emissions targets, if adopted, will be from one year to three, with assessments in 2025, 2026, and 2027.
The Alliance for Automotive Innovation, which represents most major manufacturers in the US, has stated that all carmakers will be impacted by tariffs on Canada and Mexico. AI autonomous technology company Wayve is extending its global footprint in mainland Europe, launching an on-road testing and development hub in Germany.
In conclusion, the European Commission's new Industrial Action Plan aims to move the European automotive sector from a reactive phase towards a proactive, integrated industrial strategy that supports decarbonization, competitiveness, and resilience in the face of global challenges.
- The European Commission's Industrial Action Plan for the automotive sector, announced in 2025, is aimed at strengthening the industry's competitiveness within the finance sector, as it seeks to invest in advanced EV battery technologies and partnerships.
- The plan also targets the energy industry by encouraging battery recycling and circularity in the supply chain, with a goal of recovering 95% of critical metals from electric vehicle batteries.
- In terms of the lifestyle industry, the plan aims to boost the market share of electric vehicles by supporting policies and incentives, with early 2025 data showing a rebound in EV sales, especially in the UK and Italy.
- The transportation industry will be impacted by the plan's extended compliance period for CO2 emissions targets, which, if adopted, will be from one year to three, with assessments in 2025, 2026, and 2027.
- The technology industry is not left out as AI autonomous technology company Wayve is extending its global footprint, launching an on-road testing and development hub in Germany, indicating a focus on innovation and integration with European business strategies.
