The European Commission has unveiled an ambitious €2.8bn action plan designed to accelerate the transition of the automotive industry towards clean mobility. Announced by Greek Commissioner Apostolos Tzitzikostas, the plan is part of a broader effort to position the EU as a global leader in sustainable transport while supporting the competitiveness of the European automotive sector.
Key elements of the plan include a series of purchase incentives aimed at boosting demand for electric vehicles. With measures coordinated between Member States, the Commission intends to encourage the adoption of government-funded social leasing schemes, particularly for low-income families. This initiative is expected to be supported by the future Social Climate Fund, which between 2026 and 2032 will mobilise €86.7bn to aid the green transition.
In addition to stimulating EV demand, the action plan focuses on decarbonising company car fleets, which account for around 60% of new car registrations in Europe. A non-binding proposal on fleet electrification has already been issued, and further steps are anticipated later this year. The Commission’s approach includes extending the compliance window for new CO₂ emissions standards: rather than requiring annual compliance, manufacturers will be allowed to average their emissions over a three-year period (2025-2027). This adjustment is expected to provide crucial flexibility to automakers as they adapt to stricter targets, while maintaining the overall ambition of reducing emissions to 94 grams per kilometre by 2025.
The plan also supports the development of alternative fuels. In response to growing interest in synthetic fuels, or e-fuels, the EU is set to accelerate work on revising regulations to ensure “full technological neutrality” in engine transitions. This revision, scheduled for 2026, aims to create a level playing field that promotes innovation without compromising environmental objectives.
Furthermore, the Commission is placing an emphasis on strengthening the local supply chain for critical EV components, such as battery cells and car parts. Measures to increase the domestic content of these components are intended to reduce reliance on imports and bolster European manufacturing capabilities.
Industry reactions to the plan have been mixed. While some automakers and trade bodies see the flexibility as a positive step that will help them manage the transition, others caution that diluting the regulatory burden could slow down the overall pace of electrification in Europe. Critics warn that if the new rules allow manufacturers too much leeway, the region risks falling behind global leaders in clean vehicle technology.
Despite these concerns, the European Commission remains committed to its dual objectives of boosting industrial competitiveness and achieving a sustainable, low-carbon transport future.
