Europe's automotive industry could return to its post-2008 crisis production peak of 16.8 million cars annually by 2035 if the European Union maintains its ambitious 2035 clean car targets and strengthens its industrial and demand-side policies, according to a new study released by the green transport group Transport & Environment (T&E). This strategic pathway is projected to stabilize automotive value chain jobs at current levels and significantly boost the sector's economic contribution across the continent.

The T&E report modeled the economic impact of two distinct scenarios. The optimistic scenario, predicated on upholding the 2035 zero-emission goal and introducing new industrial policies—such as electrification targets for corporate fleets and support for EU-made vehicles and batteries—forecasts an 11% increase in the automotive value chain's Gross Value Added (GVA) by 2035 compared to today. This trajectory could also generate over 100,000 new jobs in battery manufacturing by 2030 and an additional 120,000 in the charging sector by 2035. Under this framework, the EU could achieve an annual battery production capacity of up to 900 GWh by 2030, a substantial increase from the current 187 GWh, while the economic output of the charging sector could expand nearly fivefold to €79 billion.

Conversely, the study warns that any weakening of the 2035 zero-emission target combined with a failure to implement comprehensive industrial policies could lead to a €90 billion decline in the European automotive value chain's economic contribution by 2035. This adverse scenario could result in the loss of up to one million jobs compared to present levels, jeopardize up to two-thirds of planned battery investments in the EU, and deprive the charging industry of €120 billion in prospective revenue over the next decade.

Julia Poliscanova, Senior Director for Vehicles & Emobility Supply Chains at T&E, emphasized the critical juncture facing the industry. "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," Poliscanova stated. "Europe’s success hinges on the road that EU politicians take today. Keeping the 2035 zero-emissions goal alongside adopting strong industrial and demand policies is the EU’s best chance to return to greater car production, maintain job levels and increase the economic value of its auto industry."

Industry associations echoed these sentiments. Chris Heron, Secretary General of E-Mobility Europe, highlighted the vast job potential, stating, "There are hundreds and thousands of new jobs still for Europe to seize in its electric vehicle transition, but only through political courage and decisiveness." RECHARGE Director General Ilka von Dalwigk added that the EU's questioning of the 2035 target and lack of effective support schemes for battery production endanger a strategic cleantech sector. ChargeUp Europe's Secretary General Lucie Mattera underscored the need for stable and predictable regulatory conditions to fully realize the charging infrastructure sector's potential.

The report recommends several key policy actions: maintaining the 2030-2035 car CO2 targets, introducing production aid for EV batteries with incentives for EU-made components, implementing the Alternative Fuels Infrastructure Regulation to accelerate charger rollout, and mainstreaming social conditionality for quality jobs.