Europe’s car industry could return to producing 16.8-million cars a year, equalling its post-2008 crisis peak, if the EU maintains its 2035 clean cars target and implements policies to support the transition, a study published by campaign group Transport & Environment (T & E) showed on Tuesday.
Conversely, deploying no industrial strategy and going back on the 2035 target that all new cars and vans sold in the EU no longer emit carbon dioxide could result in a loss of one million auto industry jobs and two-thirds of planned battery investments, T&E said.
Challenged by high costs in their home markets and a gap to Chinese and US rivals in the electric vehicle industry, European carmakers face the effects of US President Donald Trump’s 25% tariffs on car imports, which have pushed many manufacturers to pull their forecasts for 2025.
After heavy lobbying, the European Parliament gave its backing to softening some EU CO2 emissions targets for cars and vans in May, but it has so far stuck to regulations that will bar the sale of fossil-fuel cars by 2035.
“It’s a make or break moment for Europe’s automotive industry as the global competition to lead the production of electric cars, batteries and chargers is immense,” said Julia Poliscanova, senior director for vehicles and emobility supply chains at T&E.
If the 2035 goal is maintained and policies to boost domestic EV production are implemented, the automotive value chain’s contribution to the European economy would grow 11% by 2035, the advocacy group said.
Job displacement in vehicle manufacturing could be offset by the creation of more than 100,000 jobs in battery making by 2030 and 120,000 in charging by 2035, it added.
Weakening the goal alongside a lack of comprehensive industrial policies could slash the value chain’s contribution by €90bn (R1,878,021,325,000) by 2035, the report said.