Europe's final charge? Next week is D-Day for future of EU-made electric cars

Factories on life support by taxpayer bailouts, producing cars the rest of the world no longer wants. Streets polluted by costly, oversized and outdated vehicles. Europe, frozen in time, an outlier in a world economy where market after market has swapped the century-old internal combustion engine for a more advanced, cleaner, healthier and more competitive technology.     

How far-fetched is this scenario?

Much depends on three decisions the European Commission is scheduled to take on Wednesday (10 December) — on CO₂ standards, a new fleet mandate, and its grid network.

Europe’s shift from petrol and diesel cars, vans and trucks to electric vehicles (EVs) has in many ways been world-leading.

However, this progress is built on a patchwork of regulations and incentives that are inconsistently applied and could be easily reversed. Right now, it’s standing on very shaky ground – just as markets around the world are gathering speed. 

New players like Thailand and Vietnam now sell more EVs than many Western nations, while China keeps moving at breakneck speed.

In her recent State of the Union speech, commission president Ursula von der Leyen sounded the right note when she said that, “no matter what, the future is electric”.

The urgent question however, is whether that future is European. 

What’s on the table?

First, Europe’s CO₂ standards for cars and vans, and the legislation’s centrepiece: the phase-out of petrol and diesel cars by 2035.

Companies across Europe, including those in Climate Group’s EV100 network, have made investments worth billions in recent years to strategically gear themselves — and the European market — towards electrified road transport.

The clarity provided by a 2035 phase-out date, with tightening emissions reduction targets in the years leading up to the date, has been their north star. 

It is crucial that the date remains in place, when the CO₂ standards are reviewed next week.

When is a deadline not a deadline?

Any weakening, via the introduction of flexibilities or delays, might look like a short-term fix for carmakers, but one with catastrophic consequences.

It will take the industry’s focus away from advancing EV technologies and production, harming its global competitiveness in the long-term.

And it will send shockwaves through an ecosystem that was built on the certainty of the 2035 deadline — from boardrooms to battery manufacturers. 

But where is the demand for EVs going to come from?

This argument, popular with carmakers lobbying for a relaxation of the CO₂ rules, has always been flawed.

Beyond clear consumer trends, Europe’s largest corporate fleets — which account for majority of new car sales — are already leading the charge.

Many are now over 50 percent electric. Their sustained progress depends on a steady, growing supply of EVs, and an increasing choice in models. Given that company cars make up 60 percent of all new sales in the EU, the demand is clearly demonstrated; the auto industry now must meet it.

To boost corporate demand further still, the commission is about to put a long-promised corporate fleet mandate on the table. Setting ambitious targets for companies to switch to EVs would turbocharge sales, drive down prices and create a thriving second-hand EV market for regular households.

It’s a potentially transformative piece of legislation, if the commission gets it right.

CO₂ standards and the fleet mandate are two sides of the same coin: corporate demand will ensure manufacturers achieve their sales targets, while adequate supply of EVs is essential for companies to meet their fleet goals.

But neither policy will fully succeed without a strong guarantee from the other. 

Charging points

Finally, Europe needs the infrastructure to power what it buys.

Over one million public charge points have now been installed. But scaling further — especially for trucks — depends on upgrading electricity grids. Too many charging projects are delayed by lack of grid capacity and transparency, glacial permitting and grid connection processes, and fragmented system planning.  

Fleets need well-planned networks and fast, affordable connections; power systems need the flexibility of EVs to charge at off-peak hours and integrate clean power.

With next week’s Grids Package, the EU must start prioritising modernised grids just as urgently as it once built roads, airports and rail infrastructure. 

Europe’s companies are ready. Following ambitious pioneers such as Ikea, EDF, Maersk, Unilever, AstraZeneca, Geopost and others, businesses across all sectors are rapidly electrifying their fleets – because it makes business sense.

But to keep leading Europe’s EV transition, they need a clear roadmap, and a stable policy environment.

This is Europe’s EV moment of truth. By holding firm on 2035, setting ambitious and binding targets for corporate fleets, and investing in a modern grid, Europe can secure its position at the forefront of the global race for clean transport.

If it loses its nerve now, it risks not just its auto industry, but its place in the global economy. 

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