News
31.01.2025

The Road to a New European Automotive Strategy: Trade and Industrial Policy Options

The European automotive industry faces a pivotal transition driven by the need to decarbonize, maintain competitiveness, and ensure economic security.

In a joint report by the Institut Jacques Delors and Sciences Po, authors Victor do Prado, Elvire Fabry, Arancha González Laya, Nicolas Köhler-Suzuki, Pascal Lamy and Sophia Praetorius present a road map for a New European automotive Strategy.

The shift from internal combustion engine (ICE) vehicles to electric vehicles (EVs) presents structural challenges, impacting employment and economic stability. While the EU has set ambitious targets, such as 100% zero-emission new vehicle sales by 2035, the transition is uneven across member states due to high costs, limited charging infrastructure, and dependence on imported battery materials. Europe also faces intense competition from China, which dominates battery production, and from U.S. policies that divert investments. Geopolitical tensions further threaten supply chain stability, increasing the urgency for Europe to scale up domestic production of critical materials and battery components.

To navigate these challenges, the report outlines a strategy focusing on regulatory reforms, trade agreements, industrial incentives, and infrastructure development. Key measures include regulatory incentives for EV adoption, enhanced trade partnerships, increased R&D funding, consumer subsidies, and the expansion of charging networks. The future of the European automotive sector depends on balancing economic, environmental, and political considerations while securing long-term industrial leadership. A proactive and coordinated approach is essential to prevent industrial decline and ensure Europe remains competitive in the global transition to sustainable mobility.

Read the online version of the report here.