On Wednesday, 5 March, after weeks of high-level dialogue meetings with industry and civil society, the European Commission has published its highly anticipated Industrial Action Plan for the Automotive Sector.

The Communication lays out measures to help the European auto industry maintain its competitiveness as it undergoes profound transformations in the transition towards zero-emission vehicles and connected and automated driving, both fields in which European companies begin to fall behind foreign competitors.  

The document is divided into different sections covering; Innovation and digitalisation, clean mobility, competitiveness and supply chain resilience, skills and social dimension and boosting market access, ensuring level playing field and guaranteeing economic security.

Here are four of the most important measures that were announced as a part of the Industrial Action Plan:  

Car manufacturers will be granted flexibility to comply with the 2025 CO2 targets, with an amendment to be presented by the Commission this month to spread out the 2025 target through three years. This was a key demand of the auto industry, as they struggle with lower-than-expected demand for EVs and risked hefty fines over missing the targets. On the other hand, the measure has been highly criticised by NGO and the e-mobility industry. 

The Commission will present measures to accelerate the roll-out of fully autonomous vehicles, including by creating new, harmonised rules for testing and deployment and allowing the type-approval of fully autonomous vehicles in unlimited series. These measures are an important step forward towards deployment of these vehicles, as legal fragmentation in the EU, in particular on testing and deployment, and limited number of type-approval of fully autonomous vehicles were key industry concerns.  

The Commission will present a ‘Battery Booster’ package to support the battery industry with new funds, including the possibility of production support to companies producing in the EU, though only available to foreign companies under certain conditions (ie JVs with technology transfers). The Commission will also propose local content requirements on batteries and components in EVs. This will all be welcomed by the still nascent battery industry, who have called for OPEX support and local content quotas, showing the Commission remains determined to build a homegrown battery industry. The measures, which have clear protectionist tendencies, also show the Commission is jumping on board the global trend of promoting homegrown industries.

Already in 2025, the EC will launch an alliance for connected and autonomous vehicles, aimed at bringing together automotive stakeholders to accelerate the development of common technologies through a joint innovation roadmap. Regarding connected cars, the EC also focuses on cybersecurity, acknowledging the security risks associated with both hardware and software components of connected vehicles. The aim is to proceed with a cybersecurity risk assessment of connected vehicle components under the NIS2 Directive, followed by the implementation of concrete measures.

In collaboration with the G7, the EC will work to establish a shared understanding of cybersecurity risks posed by connected vehicles and potential mitigation strategies. Additionally, the EC plans to implement a strategy to ensure connected vehicle data is accessible to the full automotive ecosystem. This will be achieved by leveraging the Data Act and publishing a Guidance on in-vehicle data at the beginning of its implementation. However, the EC does not rule out the possibility of exploring further measures, including a potential legislative initiative on access to in-vehicle data and the establishment of a European Automotive Data Platform. 

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