The European Commission has unveiled its Industrial Plan for the Automotive sector, outlining strategies to facilitate the transition to electric vehicles (EVs) and bolster battery production within the EU. The Action Plan establishes the regulatory and financial framework necessary for advancing EV adoption, battery technology, and charging infrastructure.
Support for Next-Generation Battery Technologies
A significant emphasis of the plan is on enhancing the EU’s battery industry. The Commission introduced a “battery booster” package designed to promote battery cell production and the broader supply chain through funding and legislative measures. This includes the forthcoming legislation, slated for introduction this year, which will define local content requirements and their components. Additionally, the plan allocates 1.8 billion EUR over the next two years to support battery manufacturing efforts.
To secure essential battery materials, the Commission proposes the creation of a “Battery Raw Materials Access Entity.” This entity aims to assist automakers in obtaining necessary raw materials by consolidating their commitments and investments. The plan also seeks to expedite the permitting process for battery materials refining and increase support for the recycling industry through direct funding and enhanced cooperative efforts in battery recycling.
Strategies to Enhance EV Adoption
The Action Plan outlines strategies to improve the coordination of consumer incentives for zero-emission vehicle purchases across EU Member States. The goal is to increase the effectiveness, economic efficiency, and sustainability of these incentives. The Commission will collaborate with Member States to share best practices, develop a comprehensive toolbox for incentive schemes, and investigate potential EU-level funding and initiatives. Additionally, legislative efforts are underway to decarbonize corporate fleets, which currently represent approximately 60% of total car registrations in the EU.
Managing Foreign Influence in the EV and Battery Sectors
The Commission recognizes the importance of foreign investments, including those from Chinese companies, in the EU’s EV and battery sectors. It plans to establish conditions for inbound foreign investments, which may involve joint venture requirements, supportive agreements for the EU industry, technology licensing, supply commitments for critical inputs, and measures to enhance EU economic value. Detailed provisions are expected to be released in the future. Furthermore, following an anti-subsidy investigation into battery electric vehicle (BEV) producers, the Commission has expressed readiness to investigate other unfair subsidy practices within the battery and parts sectors.
Investment in Charging Infrastructure
To meet the targets set by The Alternative Fuels Infrastructure Regulation (AFIR), the EU Commission will allocate an additional EUR570 million in 2025-2026 to accelerate the deployment of charging infrastructure, with a focus on heavy-duty vehicles (HDVs). This funding supplements the EUR1.7 billion already committed to expanding EV charging capabilities.
Adjustments to CO2 Targets
Alongside initiatives to support battery and EV development, the Commission indicated a focus on the growth of the autonomous driving industry within the region. It also announced plans to relax the 2025 CO2 targets for automakers, although specific details regarding these adjustments were not provided.
Source: European Commission
