The coming years will bring intense regulatory and organizational changes to the automotive industry—success will depend on the ability to respond quickly and strategically to new regulations and evolving consumer and advertising trends. It is worth planning now, not only to minimize risks but also to seize emerging opportunities.

Automotive Industry Trends in Europe

The European automotive sector is currently facing several challenges, particularly in the sales and development of electric vehicles. In the first half of 2024, according to research by Rho Motion, sales of electric vehicles in the European Union increased by more than 20% compared to the previous year[1]. This is a significant improvement over 2023, when growth was only 1%. In contrast, China recorded an impressive 40% increase in electric vehicle sales during the same period. These figures suggest that although the EU is lagging, the European market is beginning to catch up.

The observed changes may mark the beginning of a stronger trend toward electromobility in the EU. New emissions regulations expanded charging infrastructure, and the increasing availability of competitively priced electric models will significantly impact future sales.

Sustaining the focus on electric vehicle sales is crucial for the EU’s transport decarbonization goals. On 30 January 2025, European Commission President Ursula von der Leyen met with leaders from the automotive industry and other stakeholders to launch a strategic dialogue on the future of the European automotive sector[2].

This meeting underscored the automotive sector’s pivotal role in the EU economy and the need for a “clean transformation” of industry. President von der Leyen emphasized support for innovation and new technologies, announcing measures to expand charging infrastructure and create a comprehensive electric vehicle ecosystem. The outcome was a comprehensive Action Plan published by the European Commission on 5 March 2025.

An Automotive Development Action Plan for the EU

To support decarbonization goals and enhance the development of the automotive industry, the EU introduced the Industrial Action Plan for the European Automotive Sector (“the Plan”)[3]. This Plan is more than a general set of objectives; it includes a detailed timeline of initiatives, reforms, and investments intended to reshape the European automotive landscape over the coming years.

The Plan addresses several challenges identified by the industry, such as transport decarbonization processes, limited access to essential raw materials, and fossil fuel dependency.

It is structured around five pillars:

1. Innovation and Digitalisation, including support for autonomous vehicles.

2. Clean Mobility, including infrastructure development and zero-emission incentives.

3. Competitiveness and Supply Chain Resilience, particularly for batteries and critical materials.

4. Skills and Social Dimension, protecting workers and supporting skill development.

5. Fair Competition and Economic Security, including investment conditions and regulatory simplification.

From the perspective of entrepreneurs, the first three pillars of the Plan are the most important, whose assumptions primarily focus on the creation of legal and economic conditions for the development of the automotive industry.

Innovation and digitalisation pillar

The essence of the Innovation and Digitalisation pillar is to support and develop autonomous vehicle technology, by re-establishing the EU’s role as a technological leader in autonomous vehicles. The objectives of this pillar are to be realised, among other things, through the establishment of the European Alliance for Connected and Autonomous Vehicles. The Alliance is to create a completely new cooperation space for manufacturers, suppliers, start-ups and the research sector. At the centre of its activities will be the development of an open, European software platform for so-called Software-Defined Vehicles (SDVs), as well as the development of dedicated artificial intelligence models for use in, for example, autonomous driving, energy management or predictive maintenance of vehicles.

Between 2026 and 2027, a large, pan-European pilot centre is planned, which will serve a dual function. On the one hand, it is intended to be a hub for industry collaboration on the development of AI and software solutions in automotive, and on the other, an advanced testing platform for innovative applications and systems implemented in modern vehicles. The alliance’s activities will be funded under the Horizon Europe programme by both public and private entities. The programme will make €1 billion available to the automotive sector for the period 2025-2027, with funding for, among other things, relevant activities funded through the European Innovation Council.

Legal actions and planned legal acts:

  • New EU legislation on the approval of autonomous vehicles (2025-2026),
  • Unified ADAS and ADS test procedures in the EU (2026),
  • possible new regulations on access to vehicle data (after evaluation of the Data Act Regulation).

Clean mobility pillar

The second pillar of the Plan is a direct response to the European Union’s ambition to achieve climate neutrality by 2050. The European Union recognises that demand for electric cars has fallen between 2023 and 2024. This could mean that the automotive industry will not meet the emission targets set out in Regulation 2019/631, risking financial penalties. As a result, the European Commission has announced an amendment to the provisions of the aforementioned Regulation 2019/631, which will introduce more flexibility. Manufacturers will be able to account for the average CO₂ emissions from 2025-2027 combined, allowing them to compensate for poorer sales performance in individual years. This is to ensure continued investment in the industry and provide predictability for the market.

Automotive

Another initiative under this pillar, relevant from a business perspective, will be legislative action towards the decarbonisation of company fleets. The measures are to be carried out in a way that does not burden small and medium-sized enterprises, and we can expect concrete legislative processes from the end of 2025.

A new type of initiative from the European Commission will also be to support lower-income users through a so-called social leasing scheme. We can expect the adoption of the Transport Poverty Recommendation by the European Commission soon. It will aim to support people in financial difficulties by facilitating access to zero-emission vehicles. The Commission wants to encourage Member States to launch social leasing schemes for both new and used electric or hydrogen cars. These schemes are to be part of the national plans implemented under the Social Climate Fund (Guidance on the Social Climate Plans).

A key direction for this pillar is also to further develop the ecosystem of battery charging stations for electric vehicles. The European Commission plans to make dedicated technical support available to Member States for the implementation of the actions foreseen in:

  • Regulation 2023/1804 on the development of alternative fuel infrastructure and repeal of Directive 2014/94/EU AFIR (relating to alternative fuel infrastructure) and  
  • EPBD (Energy Performance of Buildings Directive).  

For the period 2025-2026, €570 million has already been earmarked under the Alternative Fuels Infrastructure Facility (AFIF), which supports the development of hydrogen charging and refuelling infrastructure, especially for heavy-duty vehicles.

Legal action and planned legal acts:

  • Revision of AFIR regulation – possible tightening of charging price transparency requirements,
  • Revision of the Car Labelling Directive,
  • New legislation to allow consumers to access battery data (battery passport) (Q3 2026),
  • support to Member States in the implementation of the AFIR and EPBD Regulations through the Technical Support Instrument,
  • Amendment of the regulation on CO₂ emission standards for cars and vans – making the rules for calculating targets between 2025 and 2027 more flexible.

The pillar “Competitiveness and resilience of supply chains”

The third pillar of the Plan focuses on ensuring that Europe has a strong, self-sufficient and competitive industrial base in advanced automotive technology. Particular emphasis is placed on battery production and access to critical raw materials. Pillar 3 lays the foundation for European technological independence. Its aim is for Europe not only to become a producer of future vehicles, but also to manufacture key components of their propulsion and electronics and batteries on its own territory.

The Commission is therefore launching a support package for battery production in the EU, the so-called ‘Battery Booster’, with a budget of up to €3 billion from the Innovation Fund (2025-2027). The money is intended to help companies develop production lines and move into the industrial phase. The first call for proposals worth €1bn was announced in December 2024. Between 2025 and 2027, the Commission will also provide a further €1.8 billion to support companies expanding production in the EU, including capacity expansion at existing plants. From the perspective of entrepreneurs, it makes sense to start targeted action now to get the right financial support for growth.

Legal action and planned legal acts:

  • Launch of the ‘Battery Booster‘ package – financial support under the 2025-2027 Innovation Fund,
  • considering financial support for end-of-life vehicles and battery recycling plants.

Pillar “Competence and social dimension”

The plan also draws attention to the key role of improving soft and hard skills among automotive workers. It also draws attention to the recent waves of redundancies and the risk that similar situations could recur in future years due to the increasing automation of the industry.

Legal action and planned legal acts:

  • revision and amendment of the EGF Regulation (Regulation 2021/691) with a view to supporting entrepreneurs in restructuring processes, in order to protect employees against the risk of unemployment,
  • Revision and amendment of the ESF+ Regulation (Regulation 2021/1057) to encourage EU Member States to allocate more funding to the development of the automotive sector.

The pillar “Equal opportunities and economic security”

Pillar 5 of the Plan aims to ensure fair conditions of competition, security of supply chains and protection of the interests of European companies, both in internal and international markets. To this end, the Commission will pay attention to:

  • foreign investment – on EU terms,
  • new trade agreements and international cooperation,
  • regulatory simplification.

In response to unfair trade practices related to imports of Chinese electric vehicles, the European Commission has decided to impose countervailing duties. The purpose of these measures is to counteract subsidies that distort competition on the EU market.

The Commission has also announced its readiness to initiate investigations in case of circumvention of the measures in place, if sufficient evidence of such actions is provided. New trade agreements and strategic partnerships in the area of raw materials will also be supported. In addition, the Commission is preparing a regulatory simplification package for the industry.

Legal action and planned legal acts:

  • regulatory simplification package for the automotive industry,
  • developing conditions for foreign investment in the automotive sector
  • anti-subsidy proceedings (e.g. against electric vehicles from China).

While the Plan presented is a strong political signal and a clear direction for EU action towards a ‘green’ transformation of transport, many in the industry stress that it is still missing some key solutions[4]. Regulations, initiatives, planned subsidies and new obligations will be developed gradually, which means not only opportunities but also considerable regulatory uncertainty. Therefore, it makes sense to develop an adaptation strategy today, and in this process the support of experienced legal advisors can help to understand the changes, assess the risks and prepare the business for the next steps in the implementation of the EU Plan.

Automotive advertising under the magnifying glass of the law. What challenges does the industry face?

Changes in the automotive industry are having an impact on the advertising and promotional landscape, with different characteristics in the advertising of electric vehicles and conventionally fuelled (combustion engine) vehicles[5]. The manufacturers of electric vehicles want to emphasize the advantages of buying this type of vehicle in terms of contribution to environmental protection and reduced carbon footprint. However, such actions can create the risk of – even inadvertently – greenwashing. An additional aspect of the need to adapt to new marketing realities is the move away from traditional media (radio and television) to more modern online platforms such as marketplace, social media and the wider internet.

Providing information on the environmental credentials of electric vehicles is a natural aspect that is readily emphasized by car manufacturers and dealers. However, it is worth bearing in mind that some advertising slogans can carry significant penalties. In April this year, the Italian Competition Authority imposed fines totalling €8 million on transport companies for breaching consumer protection legislation in the context of unreliable information about the companies’ green image[6]. In turn, in 2024, the Council adopted a position (general approach) on the draft new EU “Green Claims Directive”[7]. We can expect further work on the final wording of the Directive in the near future. The new law may introduce requirements relating to the information made available on the environmental credentials of electric vehicles.

The shift of the main focus of advertising activities to virtual space makes it necessary to adapt the marketing content provided to the new communication channels. One of the latest and ongoing marketing trends for the automotive industry is the influence of marketing and the increased use of social media. This type of marketing activity runs the risk of breaching competition regulations or even inadvertently committing acts that are unfair market practices.

Automotive manufacturers and dealers, given the new challenges in their image communication and the need to adapt it to increase sales of electric vehicles, should develop appropriate mechanisms to carry out effective promotion that falls within the legal framework. It is worth remembering that although a breach of regulation by an influencer does not automatically have to result in legal sanctions against the entrepreneur cooperating with him/her, such a situation may lead to serious image losses.

In an era of new image communication trends for car manufacturers and dealers, it becomes crucial to reach a select audience, i.e. an environmentally conscious one motivated to reduce their carbon footprint. Importantly, personalized marketing campaigns, while effective, may be considered an act of unfair competition if they materially interfere with the privacy of the audience.

Strengthening trust in the B2C sphere – a summary of the 2025-2026 Plan’s objectives in the context of consumer protection

One of the European Commission’s key priorities for the successful transformation of the electric vehicle market in the EU is to build consumer confidence by increasing transparency and the availability of information.

As outlined in the Plan, by the end of the third quarter of 2026, regulatory measures will be in place to ensure that consumers have access to information on the condition of batteries through a so-called battery passport. And by the end of the third quarter of 2025, consumers will already have access to data on battery repair and maintenance options.

What does this mean in practice? For consumers, the battery passport will allow them to better assess the value of a vehicle and make more informed purchasing decisions. Manufacturers, on the other hand, will be required to adapt their IT systems and internal policies accordingly so that they can easily and reliably assess the condition of batteries.

A review of the Car Labelling Directive is also planned for 2026. Its aim will be to enrich the information available to consumers when making sustainable decisions by, among other things, taking into account the average carbon footprint of a vehicle or the recycling potential of its components.

Also in 2026, a review of the AFIR regulation will be carried out to assess the potential for further price transparency at public charging stations. For operators, this will mean that billing systems and user interfaces will need to be updated to ensure full transparency of charging costs.

Conclusions for the automotive industry

The Plan presented by the European Commission describes key actions for the automotive industry in Europe. These include stimulating increased demand for zero-emission vehicles, accelerating the development of recharging infrastructure, strengthening the competitiveness and resilience of the battery supply chain, including consumer confidence (including by introducing measures to ensure transparent information on the state of the battery in its passport).

The transformation of the European automotive industry is definitely accelerating as a result of the published Plan. New regulations, ambitious climate targets and technological developments are presenting manufacturers and dealers with entirely new challenges. In the coming years, companies will have to adapt to a changing regulatory environment, including new emission regulations, the development of charging infrastructure, possible subsidies and grants, rules for online advertising (including influencer marketing and personalized advertising) or the sharing of vehicle data. Electromobility, supply chains and marketing communications today not only require knowledge of the law, but also a well-thought-out strategy. It is worth starting now to prepare the adaptation process to the new market and legal realities in order to take advantage of opportunities and minimize possible legal risks.

[1] https://rhomotion.com/news/global-ev-sales-grow-by-18-in-2025-vs-2024/ (access 12.03.2025) and https://rhomotion.com/news/over-17-million-evs-sold-in-2024-record-year/ (access 12.03.2025).

[2] https://ec.europa.eu/commission/presscorner/detail/en/ip_25_378 (access 07.03.2025).

[3] https://climate.ec.europa.eu/eu-action/climate-strategies-targets_en (access 21.03.2025).

[4] https://www.acea.auto/press-release/robust-action-essential-to-put-transition-back-on-track-and-turn-focus-to-long-term-decarbonisation-strategy/ (access 25.03.2025).

[5] https://www.datadab.com/blog/automotive-advertising-trends-and-insights-to-help-drive-traffic/ (access 26.03.2025).

[6] https://en.agcm.it/en/media/press-releases/2025/2/PS12525 (access 26.03.2025).

[7] https://www.consilium.europa.eu/en/press/press-releases/2024/06/17/green-claims-directive-council-ready-to-start-talks-with-the-european-parliament/ (access 26.03.2025).