The European Commission has announced a series of proposals designed to support the transition to cleaner vehicles and strengthen the competitiveness of the automotive sector across the European Union.
The new "Automotive Package" sets a framework for carmakers to reach climate neutrality by 2050 while aiming to simplify regulations and offer more flexibility to manufacturers, the Commission said in a statement on Tuesday.
The main measures include revised rules for reducing carbon dioxide emissions from cars, vans, and heavy-duty vehicles; mandated targets for zero- and low-emission vehicles among company fleets; and financial support for European battery production.
From 2035, car makers will need to meet a 90% reduction in tailpipe emissions, with the remaining 10% to be offset using low-carbon steel, e-fuels, or biofuels.
This approach means internal combustion engines, plug-in and mild hybrids, as well as electric and hydrogen vehicles, can continue to play a role beyond 2035.
Ahead of 2035, manufacturers will be eligible for so-called "super credits" for producing small, affordable electric cars made in the EU, which the Commission said is intended to encourage more such models on the market.
Additional flexibility will allow “banking and borrowing” of emissions targets between 2030 and 2032.
For vans, the 2030 emissions reduction target has been lowered from 50% to 40% to reflect slower electric adoption in this segment.
Focus on batteries and reducing red tape
The Commission will allocate up to €1.8 billion through the "Battery Booster" scheme to speed up the development of EU-based battery supply chains.
Of this, €1.5 billion will be distributed as interest-free loans to European battery cell makers, supporting the industry's competitiveness and reducing reliance on global suppliers.
Administrative savings for automotive businesses are also expected. The Commission estimates that measures to simplify regulations and streamline testing for vans and trucks will save manufacturers about €706 million per year.
A new vehicle category under the "Small Affordable Cars" initiative will cover electric vehicles up to 4.2 metres in length, enabling governments to introduce targeted incentives for these cars.
Labelling rules for cars are set to be harmonised and updated, ensuring consumers receive full information about emissions at the point of purchase.
These proposals follow consultations with representatives from the automotive industry, governments, and civil society, as part of a strategic dialogue initiated by Commission President Ursula von der Leyen in January 2025.
Three meetings have so far taken place under this format, gathering input on the sector’s challenges and future direction.
