The European Parliament’s declaration of a climate emergency and demand for a Green Deal in November 2019 now feels like a bygone era. With the Green Deal and Fit for 55 packages since rebranded in favour of industrial capacity and ‘competitiveness’, pressure is mounting on the EU to scale back key climate commitments.
Europe’s automotive industry is at the heart of this focus, and the European Commission has put the pedal to the floor. The bloc’s legacy automakers, a cornerstone of European economic output, were legally obliged to enter the electric age and discontinue the combustion engine. However, with the industry slow to adapt to green legislation, the Commission has stepped in and offered a lifeline.
Jens Gieseke, a German MEP with the centre-right European People’s Party, has emerged as an outspoken crusader for the cause. He, alongside much of the automotive industry itself, welcomed the publication of the Commission’s Industrial Action Plan for the European automotive sector in March as a step in the right direction.
It’s no coincidence that the action plan came out alongside a strategic dialogue between the Commission and the auto industry. Climate and environmental voices have not received such attention and there are concerns that this puts the bloc’s green agenda into reverse.
“The Green Deal has been in the centre of all legislation,” Jens Gieseke MEP tells The Parliament. “This is a very one sided and, in a way, an ideological approach, and it's a great harm to the [automotive] industry.”
Green Deal, red ink
The Green Deal set targets for automotive manufacturers on electric vehicle production and emissions, with a phase-out of combustion engines by 2035. Failure to comply with the first round of emissions targets could have resulted in fines for industry offenders as early as this year.
Then, the Commission intervened. The action plan postponed the fines, giving automakers more time to meet requirements. This was a welcome reprieve for a sector struggling against global competition, while simultaneously pushing the EU's energy and transport transitions further into the future.
Climate researchers say these kinds of delays further minimise the chance of keeping the planet from warming to catastrophic levels. Transport is responsible for nearly 30 per cent of the EU’s total CO2 emissions, of which 72 per cent comes from road transport.
Gieseke, in his third term as MEP, is a stalwart advocate for the EU's automotive sector and represents Germany’s Lower Saxony region, a key hub of the country’s auto industry and a state that holds an 11.8 per cent ownership stake in Volkswagen Group.
He says it is time to fix what he calls the mistakes made in the previous mandate. In 2024, auto companies cut more than 88,000 jobs as a result of a 6.2 per cent drop in production in the industry. Fewer cars produced means fewer workers needed to build them. Across the EU, factory closures have already occurred in Belgium and Germany, with more planned across the bloc.
These job losses had a major political impact, according to Gieseke, both in the European elections and, more recently, in the German national elections, where the incumbent SPD lost 86 seats. “You see the consequences of this policy and this has, of course, consequences on the elections, because all the people… affected are not happy with the current government,” Gieseke tells The Parliament.
Infrastructure lacking
If EU carmakers are expected to ramp up electric vehicle (EV) production for the EU market, other parts of the ecosystem will need to step up. A 2024 report from ACEA, the European Automobile Manufacturers' Association, found that the Netherlands, France and Germany are home to almost two-thirds of all EU charging points, making the transition to EVs impractical for most of the bloc.
Many member states have failed to uphold their part of the electrification bargain, and Gieseke warns that this is a key obstacle. “The ambition in Europe to roll out this infrastructure is not at the same level in every member state,” he says.
The action plan pledges to support member states by accelerating permits and grid connection procedures. The Alternative Fuels Infrastructure Facility (AFIF) aims to hold failing member states accountable by setting binding targets for the deployment of recharging infrastructure.
Read more on the automotive industry in The Parliament's latest policy report here.
That isn't enough for Gieseke, who wants to a more technology-neutral approach. However, the action plan is step in the right direction for him in this regard, as it puts renewed focus on all forms of alternative fuels.
“If we have all options on the table, I think the mix of technology will lead to a success,” he says.
Competition becoming electric
As far as electric vehicles go, the EU has imposed tariffs on Chinese automakers, who are widely viewed as having a significant lead in offering affordable EVs for the mass market. The tariffs vary between manufacturers but make affordable EVs more expensive for consumers.
The EU defends the tariffs as necessary to counter the massive state subsidies China provides its automakers, but critics argue this is a handout to European legacy companies, hurting innovation and competition.
As a result of the tariffs, some Chinese manufacturers have moved their operations to the EU. BYD has announced the construction of a second plant in Hungary focused on the production of electric cars, while Chery is undertaking a joint venture to produce EVs in Barcelona.
The move, similar to those made by European manufacturers at their peak, is set to boost bloc competition. Gieseke says that, provided the companies follow all EU standards, the move will “have a positive effect on our economy and unemployment.”
What’s next?
The Commission faces the challenge of supporting longstanding pillars of the European economy while also future-proofing it. If industry is provided the right level of flexibility, Gieseke sees no reason why Europe can’t simultaneously work on competitiveness and climate goals.
Maintaining high decarbonisation targets remains an important focus for the bloc, with the introduction of the Clean Industrial Deal. Gieseke recognises this: “We really want to deliver on the CO2 reduction,” he says.
But ensuring Europe’s auto industry doesn’t collapse is currently at the forefront of policymakers’ minds, including Gieseke’s. This could be essential to laying the foundations for a successful transition.
“If we fail, we will lose a core part of our industrial competitiveness and this has consequences not only on those measures, but on the whole value chain. So, this is really a very serious issue for Europe,” Gieseke says.
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