The European Commission has introduced a comprehensive Automotive Package aimed at supporting the transition to clean mobility, decarbonisation, and enhancing the competitiveness of the EU’s road transport sector. The initiative follows extensive consultations with stakeholders, including industry representatives and NGOs, as well as discussions with Member States.
According to the Commission, road transport accounted for about 30% of the EU’s net CO2 emissions in 2023, a figure that remains higher than in 1990. The new package is designed to help achieve climate neutrality by 2050 and ensure that all related policies align with this goal.
“The Commission stands by its goal of climate neutrality at the latest by 2050 and is committed that all policies remain consistent with this level of ambition,” the press release states.
The Automotive Package introduces several measures intended to provide industrial strategy for the automotive sector. It includes enhanced flexibility and technology-neutrality in CO2 standards for cars and vans, targeted flexibility for heavy-duty vehicles, and support for zero- and low-emission vehicles in corporate fleets.
A key element is the Small Affordable Cars initiative, which offers a framework for manufacturers to invest in producing small electric vehicles (EVs) within Europe. The package also supports battery manufacturing through a €1.8 billion Battery Booster program, including €1.5 billion in interest-free loans to European battery cell producers.
The Omnibus proposal aims to reduce administrative and compliance burdens on manufacturers, projecting annual cost savings of approximately €706 million—of which €222 million would benefit small- and medium-sized enterprises (SMEs). This measure is expected to contribute to total administrative savings from all simplification initiatives up to around €14.3 billion per year across sectors.
The transition toward zero-emission vehicles is expected to generate long-term cost savings while strengthening both growth and employment within the automotive industry. The package aims to revive production segments affected by recent declines; over six years, annual car production dropped by three million units while small car sales fell by 1.6 million units.
Regarding emission standards, updated rules maintain progress toward clean mobility but introduce more options for manufacturers through increased technological flexibility. From 2035 onward, carmakers must meet a 90% tailpipe emissions reduction target; remaining emissions can be compensated via credits from using low-carbon steel produced in Europe or from e-fuels and biofuels deployed during specific years.
Plug-in hybrids (PHEVs), range extenders, mild hybrids, internal combustion engine vehicles (ICEs), full EVs, and hydrogen vehicles will continue playing roles beyond 2035 under these flexibilities.
For heavy-duty vehicles such as lorries and coaches, proposed amendments allow manufacturers greater flexibility in meeting their 2030 CO2 targets by enabling them to accrue more emission credits before that date if they stay below annual targets.
Consumer information will also improve under revised vehicle labelling rules: labels showing CO2 emissions and energy performance will be standardized across showrooms and online platforms throughout Europe. These labels will now include data on electric consumption/range for EVs as well as cover new vans and second-hand cars/vans.
Corporate vehicle regulations are set to mandate that large companies register increasing shares of zero- or low-emission cars/vans starting from 2030—a move expected to stimulate demand given corporate registrations represent roughly 60% of new car sales (and about 90% for vans) within the EU. Member States must report registration data separately for cars/vans annually; only EU-made low/zero-emission vehicles will qualify for public financial incentives going forward.
With respect to batteries—a crucial component of EVs—the Battery Booster seeks not only investment but also innovation alignment among Member States while ensuring competitive conditions for EU-made products.
Amendments under the Automotive Omnibus package further reduce compliance costs through targeted changes such as exempting certain electric vans from tachograph/speed limiter requirements or removing duplicative laboratory tests without environmental benefit.
Finally, incentives like “super credits” will encourage production of small affordable electric cars made in Europe prior to 2035; these credits count each qualifying vehicle as more than one unit towards compliance targets—potentially making electric mobility more accessible across member countries through harmonized definitions supporting local fiscal/non-fiscal incentive schemes.