The EU Green Deal has been a contentious topic for Europe’s automotive industry, which is under pressure to significantly reduce CO2 emissions, phase out internal combustion engine (ICE) vehicles by 2035, invest in electrification, and take responsibility for the end-of-life management of vehicles. These challenges come amid prospective negotiations over a 2040 climate target aimed at cutting emissions by 90%, propelling the sector to increase electric vehicle (EV) production despite uncertainties among consumers. For an industry historically grounded in ICE cars for over a century, the shift to clean vehicle production presents significant hurdles, especially as competition from global players intensifies, notably from Germany, which already feels the ramifications of this transition.
Emission reduction targets set by Brussels highlight a contentious divide within the EU’s legislative framework. Current proposals mandate a CO2 reduction of 55% by 2030 and a complete reduction by 2035 compared to 2021 levels. MEP Jens Gieseke of Germany’s European People’s Party (EPP) has expressed opposition to a blanket ban on ICE vehicles, advocating instead for a regulatory framework that allows for CO2-neutral fuels and acknowledges the potential role of decarbonized ICEs in a mixed technology future. This perspective emphasizes a market-driven approach to determining the most efficient technologies for emission reductions rather than imposing strict legislative measures.
The pressure to electrify the automotive sector grows amidst intensifying competition, particularly from Chinese manufacturers, who are increasingly dominating the European battery electric vehicle market. Delays regarding essential battery projects, such as the bankruptcy of Northvolt, have raised questions about Europe’s capacity to develop an independent and competitive supply chain. Recent data reflects a negative trend in overall vehicle sales in the EU, with declines noted in both battery electric and plug-in hybrid models. Despite tariffs on Chinese imports, which provide some breathing room for European manufacturers, industry representatives warn that inadequate infrastructure—especially charging stations—continues to stymie consumer uptake of EVs.
The automotive industry is also grappling with significant job losses linked to the transition to electrification, particularly in Germany where 51,000 jobs have been cut in just one year—roughly 7% of the workforce. Gieseke has criticized the exclusive focus on electrification and advocates for a revision of CO2 performance standards to reflect a diversified approach. The European Automobile Manufacturers’ Association (ACEA) has echoed these calls, highlighting the necessary conditions for ramping up zero-emission vehicle production, including improvements in infrastructure and availability of affordable green energy.
In the political landscape, a shift in Germany’s leadership has implications for the future of EU climate policy, particularly in the automotive sector. Chancellor Friedrich Merz’s government is leaning towards a slower pace of energy transition and deregulation in business, expressing concern that stringent CO2 regulations could jeopardize the automotive industry’s viability. This sentiment resonates with various EU member states that favor a more gradual review of emissions standards, but recent agreements among European legislators have set firm deadlines that complicate a potential retraction on ICE prohibitions.
As negotiations unfold, the divide between automotive industry interests and public health advocates will be pivotal. Health professionals have highlighted the significant health risks associated with fossil fuel combustion in transportation, making the case that targets for reducing toxic air pollutants are essential for safeguarding public health and climate goals. The ongoing dialogue will greatly influence the future trajectory of the Green Deal, as it seeks to reconcile the automotive sector’s needs with public health imperatives and environmental commitments, shaping Europe’s automotive future in the coming years.
