A push in order to boost EV demand has been proposed by the EU

During a meeting, which is due to be held next week, it has been arranged that the European Commission will talk about the new measures they intend to implement. A large goal within these measures is to boost demand for electric vehicles (EVs) within the European Union.

Within a draft of the proposal, it was stated that the measures that the European Commission are looking to put in place, aim to see local content requirements for battery production.

So far, it is agreed that the EU executive will publish their automotive action plan on the 5^th of March and the aim for this plan, is that it will help to ensure that EU car producers have the ability to electrify their fleets. Plus it will also make sure that car producers are able to compete with more advanced Chinese and U.S. rivals.

The draft has already been witnessed once and now the project will move forwards to make proposals to the twenty-seven EU member states. The predominant focus throughout this proposal, will be to highlight actions they are able to take, with the intention of accelerating the uptake of EVs in fleets of company cars. At the moment, bloc’s market is made up of an estimated 60% of new cars.

Moreover, the measures to be put in place will work with EU countries, to determine the best way EV purchases and funding for these purchases would be incentivised. Plus, the measures also suggest that zero-emission heavy vehicles should become exempt from road charges.

Its been made known that EU carmakers have recently been affected by factory closures and therefore they are now preparing for U.S. tariffs. As they are dealing with this, they are now urging the Commission to grant relief from fines that have the potential to rise to fifteen billion euros, if they fail to create fleets which are capable of meeting CO2 emission limits in 2025.

The draft paper makes it clear that the European automotive industry is currently at risk of losing market share when it comes to EV technology, plus the industry also faces higher cost relative to competitors in EV components. This is especially true for batteries, which right now are 30-40% of the value of a typical car.

In response to this issue, the EU executive will ensure that research is put into finding support for companies which are producing batteries within the EU. The support that is found could also become available to foreign firms, if these firms are in partnership with an EU company. This support would be extended, in order to make the sharing of expertise and technology possible.

Right now, the plan is for the Commission to propose conditions for inbound foreign investments within the automotive sector. On top of this, the Commission will also research the possibility of providing financial support to battery-recycling facilities.

The EU automakers’ association ACEA, stated that, ‘New EV sales fell 5.9% in 2024.’ The ACEA says that, ‘limited charging infrastructure was partly to blame. Germany’s abrupt ending of subsidies and a shortage of cheap EVs until now have also contributed.’

The draft also stated that, ‘there will be increasing European content requirements on battery cells and components sold in EVs in the European Union.’

Senior Director of vehicles and e-mobility at campaign and research group T&E, Julia Poliscanova, commented that, ‘this was “the elephant in the room” and targets were the main measure to help Europe catch up with China by driving producers to electrify.’ She added, “Instead of creating uncertainty, the plan should stick to the promising measures on electrifying corporate fleets and localising battery manufacturing.”