The European Commission has today presented its Automotive Package, aimed at supporting the automotive sector in its transition towards clean mobility. The package sets out an ambitious yet pragmatic policy framework to ensure climate neutrality and strategic independence by 2050, while providing greater flexibility for manufacturers. It also responds to calls from the EU automotive industry to simplify existing rules.

The automotive sector has been a cornerstone of Europe’s industrial strength for decades, sustaining millions of jobs and driving technological innovation. As global markets evolve, the industry is undergoing a profound transformation driven by new technologies and emerging players.

The automotive package sends a strong market signal in favour of zero-emission vehicles (ZEVs), while giving the industry more flexibility to meet CO2 targets and supporting vehicles and batteries manufactured within the European Union. A dedicated corporate vehicle initiative will encourage the uptake of zero- and low-emission vehicles. At the same time, the Automotive Omnibus is set to enhance competitiveness by cutting costs—estimated at around €706 million per year—and reducing administrative burdens, while improving investment certainty.

European Commission President Ursula von der Leyen stated that “Innovation. Clean mobility. Competitiveness. This year, these were the main priorities in our intense dialogues with the automotive sector, civil society organisations and stakeholders. And today, we are addressing them all together. As technology rapidly transforms mobility and geopolitics reshapes global competition, Europe remains at the forefront of the global clean transition.”

Staying the course towards clean mobility with pragmatism

The automotive package addresses both the supply and demand sides of the sector’s transition. On the supply side, it includes a review of the existing CO2 emission standards for cars and vans, alongside a targeted amendment to the rules applicable to heavy-duty vehicles. On the demand side, the Commission proposes an initiative to decarbonise corporate vehicle fleets through binding national targets for zero- and low-emission vehicles.

The updated CO2 rules introduce additional flexibility to support industry and enhance technological neutrality, while providing predictability for manufacturers and maintaining a clear market signal towards electrification.

From 2035 onwards, car manufacturers will be required to achieve a 90% reduction in tailpipe emissions, with the remaining 10% to be offset through the use of low-carbon steel produced in the EU or through e-fuels and biofuels.

This approach will allow plug-in hybrids (PHEVs), range extenders, mild hybrids and internal combustion engine vehicles to continue playing a role beyond 2035, alongside full battery electric vehicles (EVs) and hydrogen-powered vehicles.

Before 2035, manufacturers will be able to benefit from “super credits” for small and affordable electric cars manufactured in the EU, incentivising the market deployment of smaller EV models. For the 2030 targets for cars and vans, additional flexibility is introduced by allowing banking and borrowing between 2030 and 2032. Further flexibility is granted to the van segment—where EV uptake has been structurally more challenging—by reducing the 2030 CO2 reduction target for vans from 50% to 40%.

The Commission also proposes a targeted amendment to the CO2 emission standards for heavy-duty vehicles, introducing flexibility to facilitate compliance with the 2030 targets.

Boosting corporate vehicle electrification

For corporate vehicles, binding targets at Member State level will support the adoption of zero- and low-emission vehicles by large companies. Increasing the availability of such vehicles on both the primary and secondary markets is expected to benefit all consumers. Given that company cars typically cover higher annual mileage, this will also result in greater emissions reductions.

In addition, zero- or low-emission vehicles that are “Made in the EU” will become a prerequisite for vehicles benefiting from public financial support.

Strengthening Europe’s battery industry

With a budget of €1.8 billion, the battery reinforcement initiative aims to accelerate the development of a fully European battery value chain. Of this amount, €1.5 billion will support European battery cell producers through interest-free loans.

Additional targeted policy measures will support investments, foster innovation, enhance coordination among Member States and strengthen the European battery value chain. These measures are intended to improve cost competitiveness, secure upstream supply chains and support sustainable and resilient production in the EU, while reducing exposure to dominant global market players.

Cutting red tape and improving enabling conditions

The Automotive Omnibus is designed to ease administrative burdens and reduce costs for European manufacturers, boosting their global competitiveness and freeing up resources for decarbonisation. Companies are expected to save approximately €706 million per year, contributing to total annual administrative savings of around €14.3 billion from all omnibus and simplification initiatives presented by the Commission to date.

Among other measures, the Omnibus proposes reducing the number of delegated acts to be adopted in the coming years and streamlining testing procedures for new passenger vans and trucks. These changes aim to cut costs while maintaining the highest environmental and safety standards.

The deployment of electric vans in national transport will also be supported through measures that place them on an equal footing with internal combustion engine vans regarding driving time and rest period rules.

The Omnibus further introduces a new vehicle category under the Small Affordable Cars initiative, covering electric vehicles up to 4.2 metres in length. This will allow Member States and local authorities to design targeted incentives, stimulating demand for small electric vehicles manufactured in the EU.

In addition, the Commission is updating and harmonising car labelling rules to ensure that consumers have comprehensive information on vehicle emissions at the point of purchase.

Today’s proposals build on the Automotive Action Plan and on input from industry and key stakeholders gathered during the Strategic Dialogue launched under the leadership of President von der Leyen in January 2025.

The Strategic Dialogue on the future of the automotive industry has brought together representatives from industry, social partners, Member States, regions and civil society. To date, three dialogue meetings have taken place, providing a platform to discuss the challenges and opportunities facing the sector.