Maintaining cars’ zero emissions target is EU’s chance to regain competitiveness: T&E

The European car industry has a chance to return to its post-2008 production and competitiveness peak – if the EU maintains the obligation for carmakers to sell 100% electric vehicles by 2035.

In contrast, backtracking on the 2035 zero-emissions vehicle target would likely result in the loss of 1 million jobs in the sector, according to the latest analysis by think tank Transport & Environment (T&E).

The organisation calculates that Europe’s car industry could return to producing 16.8 million cars a year – equal to its post-2008 crisis peak – if the EU maintains its 2035 clean cars target, as well as strengthening industrial policies. This would mean maintaining the current number of jobs within the automotive value chain – largely thanks to the creation of around 100,000 new jobs in battery-making by 2030 and 120,000 in charging by 2035.

‘A make-or-break moment for Europe’s automotive industry’

Julia Poliscanova, Senior Director for Vehicles & Emobility Supply Chains at T&E, said: “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. Europe’s success hinges on the road that EU politicians take today. Keeping the 2035 zero-emissions goal alongside adopting strong industrial and demand policies is the EU’s best chance to return to greater car production, maintain job levels and increase the economic value of its auto industry.”

The call to maintain the current level of ambition for 2035 targets comes after the EU loosened the rules for manufacturers to comply with its mandated 15% annual emissions reduction over the next three years. Some industry associations are now lobbying for the EU to revise its 2035 ban on combustion engines.

Increasing the automotive value chain’s contribution to the EU economy

If the 2035 target is maintained, T&E estimates that the automotive value chain’s contribution to the European economy would increase by 11% by 2035, compared to today.

The EU could also produce up to 900 GWh of batteries a year (up from the current 187 GWh) by 2030, increasing the economic output of the charging sector almost fivefold to €79 billion by 2035.

However, if the target is weakened, the European automotive value chain’s contribution to the economy is expected to decline by €90 billion by 2035, leading to the potential loss of up to 1 million jobs. Up to two-thirds of planned battery investments in the EU could also be lost while the charging industry would be deprived of €120 billion in prospective revenue over the next 10 years, the report adds.

Chris Heron, Secretary General of E-Mobility Europe, commented: “There are hundreds and thousands of new jobs still for Europe to seize in its electric vehicle transition, but only through political courage and decisiveness. The global race for electric car leadership is already underway, and we can’t let other regions get out of reach. Europe needs to keep the conviction of its 2035 target to guide investment into electric vehicles, batteries, materials, and charging. But it also needs a tangible step up in its industrial and demand policies, to prove to companies it really means business.”