Published by Global Banking & Finance Review®
Posted on July 7, 2025
2 min readLast updated: January 23, 2026
The EU's 2035 zero-emission car target is crucial for protecting 1 million auto industry jobs and boosting economic growth. Weakening it could lead to significant job losses.
By Amir Orusov
(Reuters) -Europe's car industry could return to producing 16.8 million cars a year, equalling its post-2008 crisis peak, if the European Union maintains its 2035 clean cars target and implements policies to support the transition, a study published by campaign group Transport & Environment showed on Tuesday.
Conversely, deploying no industrial strategy and going back on the 2035 target that all new cars and vans sold in the EU no longer emit carbon dioxide could result in a loss of 1 million auto industry jobs and two-thirds of planned battery investments, T&E said in a statement.
WHY IT'S IMPORTANT
Already challenged by high costs in their home markets and a gap to Chinese and U.S. rivals in the electric vehicle industry, European carmakers now face the effects of U.S. President Donald Trump's 25% tariffs on auto imports, which have pushed many manufacturers to pull their forecasts for 2025.
Following heavy lobbying, the European Parliament gave its backing to a softening some of the EU CO2 emissions targets for cars and vans in May, but it has so far stuck the regulations that will bar the sale of fossil-fuel cars by 2035.
KEY QUOTES
"It's a make or break moment for Europe's automotive industry as the global competition to lead the production of electric cars, batteries and chargers is immense," Julia Poliscanova, Senior Director for Vehicles & Emobility Supply Chains at T&E, said in the statement.
BY THE NUMBERS
If the 2035 goal is maintained and policies to boost domestic EV production are implemented, the automotive value chain's contribution to the European economy would grow 11% by 2035, the advocacy group said.
Job displacement in vehicle manufacturing could be offset by the creation of more than 100,000 jobs in battery making by 2030 and 120,000 in charging by 2035, it added.
Weakening the goal alongside lack of comprehensive industrial policies meanwhile could slash the value chain's contribution by 90 billion euros ($105.5 billion) by 2035, the report said.
($1 = 0.8529 euros)
(Reporting by Amir Orusov in Gdansk, editing by Milla Nissi-Prussak)
Abandoning the 2035 target could result in a loss of 1 million jobs in the auto industry and a significant decrease in the automotive value chain's contribution to the economy.
If the EU maintains its 2035 clean cars target, Europe's car industry could potentially produce 16.8 million cars a year, matching its peak production levels from before the 2008 crisis.
Job displacement in vehicle manufacturing could be offset by the creation of over 100,000 jobs in battery production by 2030 and 120,000 jobs in charging infrastructure by 2035.
Maintaining the 2035 goal and implementing supportive policies could lead to an 11% growth in the automotive value chain's contribution to the European economy by 2035.
European carmakers are already facing high costs in their home markets and competition from Chinese and U.S. rivals in the electric vehicle industry, which complicates their position.
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