JAKARTA The European automotive industry is at a crucial point. A recent study of the Transport & Environment (T&E) campaign group, released today and published by Reuters, Tuesday, July 8, revealed that maintaining the zero-vehicle emission target by 2035 could be key to the revival of the automotive industry, could even return the autoproduction rate to its 2008 post-crisis golden age, which is 16.8 million units per year.
However, if this ambitious target is relaxed, the impact could be very detrimental: about 1 million jobs in the automotive sector are in danger of being lost, and investments in battery development could shrink by two-thirds of the original plan.
This report confirms that Europe needs a strong industrial strategy to support the switch to electric vehicles (EVs). Without a clear and comprehensive policy direction, Europe risks losing its market share because it loses to compete with producers from China and the United States.
Currently, the European auto industry faces various tough challenges: ranging from high production costs, EV technology gaps, to trade policy threats, such as US President Donald Trump's 25 percent tariff plan for imported vehicles. All of this has led a number of manufacturers to begin revising their business projections for 2025.
Although the European Parliament had supported easing the CO2 emission limit for cars and vans in May, the ban on the sale of fossil-fueled cars from 2035 remains in effect.
"This is a decisive time for the future of the European auto industry," said Julia Poliscanova, Senior Director for E-Mobility Vehicles and Supply Chain at T&E.
"Global competition for leading in electric cars, batteries and charging infrastructure is very tight," he added.
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If the 2035 target continues and domestic electric vehicle production is strengthened, then the European automotive sector is projected to grow 11 percent that year. The shift in labor from conventional vehicles can be offset by the creation of more than 100,000 jobs in the battery industry by 2030 and 120,000 jobs in the charging infrastructure sector by 2035.
On the other hand, if the zero-emission target is relaxed without strong policy support, the value of the automotive industry supply chain could drop drastically to 90 billion euros (around Rp1,716 trillion) by 2035.
This study is an important reminder that climate commitment alone is not enough. Europe also needs to immediately develop a solid industrial strategy so that its automotive sector remains competitive and able to create a greener and more prosperous future.
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