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AUTOMOTIVE

Policy and Strategy

The EU’s policy framework for the automotive industry positions the sector as both a backbone of the EU economy and a test-bed for the Union’s twin green-and-digital transition. Accounting for 13.8 million direct and indirect jobs and exerting a powerful multiplier effect on upstream suppliers and downstream services, the industry is too strategic to fail—yet it remains one of the largest sources of air-pollution and carbon emissions on Europe’s roads.

Against this backdrop, the Commission pursues a dual objective: preserve an integrated single market for vehicles while driving the shift to climate neutrality and enhanced road-safety.

The strategy therefore couples high environmental and safety standards with instruments that reinforce global competitiveness and a level playing field inside the Union.

To deliver, Brussels is leaning on five strategic levers.

  1. Smart regulation—stricter, but streamlined, type-approval and market-surveillance rules to boost trust and cut red tape.
  2. International harmonisation—alignment with UNECE and other fora to keep export markets open and development costs down.
  3. Bilateral regulatory dialogues—preventing divergent standards with key partners and securing reciprocal market access.
  4. Access to finance for SMEs—via COSME, the SME Instrument and InvestEU, ensuring the supply chain can scale and innovate.
  5. Future-proof capabilities—the Blueprint-driven DRIVES skills alliance and the European Battery Alliance, which anchor Europe’s workforce upskilling and battery sovereignty, respectively.

Layered onto these pillars are cross-cutting flagship agendas--Connected & Automated Mobility for digital leadership and zero-collision roads, and the push for a resilient, sustainable battery ecosystem that underwrites mass electrification.

Together they sketch a roadmap that is as much about industrial power and strategic autonomy as it is about decarbonising Europe’s transport network.

Key points 

  • Strategic importance of the sector
    The EU automotive industry supports 13.8 million jobs directly and indirectly, with a strong multiplier effect across other industrial sectors, while road-transport emissions remain a major source of air pollution.
  • Overall policy goals
    EU action seeks to create a single market for vehicles, guarantee high standards of environmental protection and road safety, strengthen global competitiveness and keep a fair level playing field for manufacturers and suppliers.
  • Skills & workforce development
    • A sector-specific Blueprint for Cooperation on Skills launched the DRIVES project (2018-2021) to forecast skill needs and design vocational training.
    • A COSME-funded follow-up (2019) focuses on up-/reskilling strategies for SMEs in and beyond the EU.
  • European Battery Alliance
    Batteries are deemed “a strategic imperative” for both the clean-energy transition and the competitiveness of Europe’s car industry; the alliance, begun in 2017, is making “major progress”.
  • Connected & automated mobility
    The Commission’s 2018 strategy (COM/2018/283) aims to make Europe a world leader in autonomous and connected vehicles, unlocking system-wide safety and efficiency gains.
  • Four competitiveness pillars
    1. Smart regulation – improved EU type-approval rules and competitiveness proofing of all proposals;
    2. International harmonisation – aligning technical requirements globally (UNECE) to cut costs;
    3. Bilateral regulatory dialogues – promoting coherent rules with non-EU partners, especially on energy saving and emissions;
    4. Access to finance & market support for SMEs – via programmes such as COSME and the SME Instrument.

Sources: European Union, http://www.europa.eu/, 1995-2025, 

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