Industrial Action Plan for the European automotive sector

The automotive industry is a core engine of European prosperity and an essential part of Europe’s identity. European manufacturers have been global leaders since the invention of the automobile, producing iconic brands that set high benchmarks in innovation and excellence. Today, the sector accounts for €1 trillion in GDP, a third of private research and development investment in the EU and it provides direct and indirect employment to 13 million Europeans. For commercial vehicles, European truck makers account for more than 40% of the world market.1 The European automotive industry leadership commands admiration from the world over.

Currently, the sector is undergoing a structural transformation of unprecedented speed and magnitude. The shift to clean mobility is accelerating. In 2024, already one out of five cars sold globally was electric. At the same time, the rapid integration of digital technologies, such as AI, software, sensing and communication devices, together with the increasing importance of digital services and connectivity, are shaking up the sector. It is imperative that the European automotive industry not only navigates, but also shapes the transition to zero-emission, connected and increasingly automated vehicles.

While facing this transition, our automotive industry is also confronted with serious competitiveness challenges. It faces global supply chain risks and dependencies on raw materials and battery imports, a still too large reliance on fossil fuels, fierce competition for talent, cost gaps in key inputs, and an increasingly volatile geopolitical context. European companies risk falling behind on key strategic technologies such as batteries, software, infotainment systems, and autonomous driving, and often have less direct control over many raw material inputs, while overseas competitors are often supported by assertive industrial strategies and receive State support in various forms. This is a pivotal moment for the European automotive industry – decisive action is needed, and the European Union (EU) is committed to support the sector in its transition.

That is the purpose of this Action Plan, which builds on the Competitiveness Compass, the Clean Industrial Deal and – in recent weeks – a wide series of consultations, led by the President of the Commission and several Commission members, in which more than 100 organisations actively participated.2 It sets out concrete measures to help secure global competitiveness of the European automotive industry and maintain a strong European production base through action in five key areas: 1) innovation and digitalisation, 2) clean mobility, 3) competitiveness and supply chain resilience, 4) skills and social dimension, and 5) level playing field and business environment.