European Commission launches Action Plan to strengthen EU Automotive Industry
Today, the European Commission (Commission) has presented a new Action Plan to boost innovation, sustainability, and global competitiveness in the automotive sector. Building on the Strategic Dialogue on the Future of the European Automotive Industry launched in January 2025, the Plan addresses the sector’s key challenges, from rapid technological change to growing international competition.
To reduce strategic dependencies and secure a strong production base, the Commission will invest EUR 1.8 billion in a competitive battery raw materials supply chain. Around EUR 1 billion from Horizon Europe (2025–2027) will support the development of AI-powered, connected, and autonomous vehicles, led by a new European Connected and Autonomous Vehicle Alliance.
The Action Plan proposes targeted support to increase demand for zero-emission vehicles, enhance battery durability, and optimise national incentives. A focused amendment to the CO2 Standards Regulation will introduce greater flexibility, allowing manufacturers to average emissions over three years (2025–2027), while maintaining overall climate ambition.
To support workers, the Commission aims to expand funding for reskilling through the European Globalisation Adjustment Fund and the European Social Fund Plus, alongside new initiatives under the Pact for Skills.
Support for the EU battery industry will continue via the EU Innovation Fund, with consideration of direct production support and resilience criteria.
The Commission will also use the mid-term review of ESF+ to incentivise Member States to reprogramme more funding for the automotive sector.
To protect the sector from unfair competition and enhance global market access, the Commission aims to make full use of trade defence instruments, streamline regulation, and encourage strategic foreign investment.
Developed through broad stakeholder engagement, the Action Plan aims to secure Europe’s leadership in the global automotive market while balancing innovation, sustainability, and competitiveness.
For more information, see the Commission’s PR.