The EU’s plan to save Europe's car industry

The European Commission has announced an action plan to support the European car industry's access to key strategic technologies, including batteries, software and autonomous driving, along with cutting regulatory burdens.

It lists five flagship initiatives to support the ailing car industry, which provides 7% of the EU’s GDP and employs around 14 million people across the bloc.

However, the sector has been struggling due to supply chain risks, high energy costs and overreliance on critical supplies.

Why are European carmakers struggling in the electric vehicle market?

To address the latter, the Commission has announced a fund of €1.8bn to create a secure and competitive supply chain for battery raw materials.

Securing a safe supply of batteries and the raw materials in them is one of the key issues the industry is facing while transitioning to zero-emission vehicles.

“We will promote domestic production to avoid strategic dependencies, especially for batteries production,” Commission President Ursula Von der Leyen said on Wednesday.

Furthermore, the European Commission emphasised the need for European carmakers to become market leaders in AI-powered, connected and automated vehicle making. To support this, they pledged funding of €1bn over the 2025-2027 period.

A further €570m is going to finance the creation of charging points.