The European Commission is set to introduce measures aimed at increasing electric vehicle (EV) adoption in the European Union and strengthening domestic battery production, according to a draft proposal seen by Reuters. The plan, expected on March 5, is intended to help European car manufacturers transition to electric mobility and compete with Chinese and U.S. rivals.
The draft recommends steps for the 27 EU member states to accelerate EV uptake, particularly in corporate fleets, which account for around 60% of new car sales in the bloc. It also proposes exemptions from road charges for zero-emission heavy vehicles and explores financial incentives to encourage EV purchases.
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New EV sales in the EU declined by 5.9% in 2024, according to the European Automobile Manufacturers’ Association (ACEA), which attributed the drop to inadequate charging infrastructure, Germany’s abrupt end to subsidies, and a lack of affordable EV models.
The Commission’s draft acknowledges concerns over the competitiveness of European automakers, stating that the industry is “at risk of losing market share in EV technology” and faces “significant higher costs relative to competitors in EV components, notably batteries, which account for 30-40% of the value of a typical car.”
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To reduce reliance on foreign suppliers, the Commission plans to introduce “increasing European content requirements on battery cells and components sold in EVs in the European Union.” The draft also considers financial support for battery producers in the EU, including foreign companies that form partnerships with European firms to share expertise and technology.
The Commission intends to propose conditions for foreign investments in the automotive sector and examine financial aid for battery-recycling facilities. Meanwhile, European car manufacturers, already facing factory closures and potential U.S. tariffs, have called for relief from emission-related fines, which they say could amount to €15 billion ($15.6 billion) in 2025.
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The draft does not specify potential financial relief measures. Italy’s ANFIA auto lobby has urged the Commission to take stronger action, including “the cancellation of the planned fines for European manufacturers.”
Julia Poliscanova, senior director for vehicles and e-mobility at Transport & Environment, emphasized the importance of maintaining clear policy direction. “Instead of creating uncertainty, the plan should stick to the promising measures on electrifying corporate fleets and localizing battery manufacturing,” she said.