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Brussels has promised to help Europe's beleaguered auto industry by using pan-EU financial support to boost demand for electric cars.
Teresa Ribera, executive vice president of the European Commission, told the Financial Times at the World Economic Forum in Davos that officials were still “shaping” options for the stimulus program.
“It makes sense to see how we can figure out, from a European perspective, how to facilitate procedures rather than going through national support,” Ribera said. She warned of “a race in which we could face one national model versus another.”
German Chancellor Olaf Scholz revealed on Tuesday that the Commission is studying the European Union support program he proposed. The German government abruptly canceled its own scheme in 2023, leading to a major downturn in the scheme Eve sales.
Many EU member states offer incentives for electric vehicles, but conditions vary widely and many member states do not offer any purchase subsidies at all, according to the European Automobile Manufacturers Association.
One challenge for Brussels is to design a plan that complies with World Trade Organization rules while avoiding subsidies that flow to Chinese automakers, whose market share is growing rapidly.
Ribera acknowledged that there was a “complicated balance” to be struck between rapid electrification and “a mismatch with the ability of European brands to provide what we would like to see moving on our roads in terms of quantity and quality.”
The Commissioner, who is responsible for the European Union's “green industry” strategy, said that the potential incentive plan would be one of several measures to support a sector considered vital to the European economy. Europe's automakers “need a comprehensive vision on how to modernize their capabilities and keep up with what is really needed around the world,” Ribera said. By contrast, US President Donald Trump this week pledged to end “unfair subsidies” for electric cars.
Ribera, a socialist and former deputy prime minister of Spain, ruled out postponing the 2035 deadline to end new sales of internal combustion engines because the auto industry wants “predictability and clarity.”
“It makes no sense to open the discussion again when that provides some certainty and punishes first movers who took it seriously without any potential benefits for those who still need to act,” she said.
But it said it was open to flexibility regarding annual electric vehicle sales targets and the fines automakers face if those targets are not met. Ribera said there was an “open conversation” with automakers about alternative commitments they could make regarding the investment.
Automakers have complained that paying fines would only hamper their investment plans in electric vehicles, while buying credits from Chinese EV makers helps Chinese competitors.
Ribera said it was important to “ensure that this legislation is implemented in a way that facilitates the achievement of the main goal” of phasing out gasoline and diesel engines.
It has also said it is open to expanding technology transfer requirements for foreign automakers that want to set up manufacturing facilities within the EU. Brussels said last year that it would ask foreign companies that received EU grants to develop the batteries Share some technology With local partners.
There is a “good lesson to be learned” from China, which set strict requirements for joint ventures and technology sharing when European carmakers set up factories there 30 years ago.
Beyond the automotive sector, Ribera said she was ready to expand the available measures the Commission could take on behalf of European industry.
Ribera said it would consider local content requirements to protect European turbine manufacturers who face fierce competition from Chinese companies.
Shares of European wind turbine manufacturers were hit by Trump's first political announcements, including a suspension of leasing for new offshore projects.
Ribera insisted that the EU would continue on its decarbonisation path, despite Trump's move to abandon the 2015 Paris Agreement on cutting emissions, of which she was one of the architects.
She said the devastating fires in Los Angeles showed that the United States is already suffering the effects of climate change at great cost.
““The world is much bigger (than the United States) and there are many other partners and players who understand why it is important to stay united,” she added.
