In the heart of Europe’s ambitious quest for a greener future, the European Green Deal stands as a beacon of hope—yet, as of September 2025, it’s hitting speed bumps that threaten to derail the continent’s climate ambitions. Launched in 2019, this sweeping initiative aims for carbon neutrality by 2050, with the automotive sector at its core, pushing for a full phase-out of internal combustion engine (ICE) vehicles by 2035. But why is Europe seemingly lagging? From sluggish EV adoption to fierce industry pushback, political shifts, and global competition, the road to sustainability is fraught with detours.
The Green Deal’s Ambitious Blueprint:
At its inception, the European Green Deal promised a transformation: slashing emissions by 55% by 2030 (from 1990 levels) and hitting net-zero by mid-century. For cars, this translates to stringent CO2 targets— a 55% cut by 2030 and 100% by 2035 compared to 2021 baselines. Yet, midway through 2025, progress is uneven. While EV sales surged 34% in the first half of the year, reaching 1.19 million units across Europe, overall vehicle markets dipped by 1%, with battery-electric models holding just 15.6% share in July. This mismatch highlights a core issue: Europe’s auto giants, rooted in a century of ICE dominance, are grappling with the shift, fearing it could erode their global edge.
Politically, the Deal faces headwinds. The European People’s Party (EPP), now more influential post-2024 elections, advocates for “technological openness,” pushing to include CO2-neutral fuels like e-fuels in the mix rather than a blanket ICE ban. As MEP Jens Gieseke noted, letting the market decide could foster fair competition among propulsion techs. Meanwhile, the upcoming 2040 target of 90% emissions reduction looms, intensifying calls for revisions.
Economic Turbulence:
Europe’s automotive sector, employing millions, is feeling the pinch. In Germany alone, 52,000 jobs vanished in the past year—nearly 7% of the industry’s workforce—blamed on the electrification push. Across the EU, nearly 90,000 positions were cut in 2024, with 2025 seeing continued announcements from suppliers like Continental (7,150 global cuts by year-end). A McKinsey report warns that without swift action, low profitability could persist until at least 2025, with suppliers expecting ongoing challenges.
The European Automobile Manufacturers’ Association (ACEA) echoes this, labeling the sector in a “polycrisis” of tech shifts and competition. They demand pragmatic tweaks: better infrastructure, affordable green energy, and incentives to boost zero-emission vehicle uptake. Without these, fines for missing CO2 targets could cripple firms, as seen in looming penalties for 2025 non-compliance. Deloitte’s insights frame this as a pivot to net-zero value chains, but the transition’s cost—billions in investments—raises fears of factory closures and economic fallout.
The China Factor:
China’s EV juggernaut is accelerating Europe’s woes. In the first half of 2025, Chinese brands doubled their EU market share to 5.1%, selling 347,135 units—a 91% year-on-year leap. Brands like BYD and MG led the charge, hitting a peak of 5.9% in May. While EU tariffs aim to level the field, industry voices argue they’re insufficient amid infrastructure gaps, like sparse charging points deterring buyers.
Disruptions, such as Northvolt’s bankruptcy, have hampered Europe’s battery supply chain, casting shadows on homegrown competitiveness. Global EV sales hit 10.7 million in 2025, with Europe surging 27% year-to-date, but lagging behind China’s dominance. Transport & Environment (T&E) warns that without EV leadership, Europe risks €90 billion in value-added loss and up to 1 million jobs by 2035.
Pushback and Potential Revisions
Shifts in power are reshaping the narrative. Germany’s new conservative Chancellor Friedrich Merz has urged flexibility on CO2 rules, warning against “destroying” the auto sector by fixating on specific techs. The EPP’s Peter Liese calls for overhauls, claiming carmakers aren’t ready for 2025 exhaust limits.
A pivotal meeting on September 12, 2025, between CEOs and Commission President Ursula von der Leyen could signal changes. Von der Leyen recently announced initiatives for affordable cars and targeted investments in auto regions for a “just transition.” The Strategic Dialogue, launched in January 2025, seeks to align decarbonization with competitiveness. Yet, proposals from Italy and allies to advance CO2 reviews were sealed in June, maintaining the 2035 ICE ban—for now.
Health Imperatives: The Human Cost of Delay
Amid industry pleas, health experts counter with urgency. A September 2025 letter from medical professionals to Commissioner Wopke Hoekstra warns that weakening the ICE ban risks lives, citing NO2 and PM2.5 pollutants from fossil fuels. “This target is essential for safeguarding public health,” they argue, linking delays to prolonged fossil fuel dependency. T&E reinforces this, noting hybrids’ real-world emissions far exceed tests, no fix for CO2 goals.
The Overlooked Backbone Under Pressure
Trucks and buses, vital to Europe’s economy, face their own hurdles. ACEA’s Christian Levin warns the 2030 CO2 targets—requiring a 35% ZEV market share from 3.5% today—are unattainable without infrastructure like grid connections and incentives. Penalties loom for non-compliance, despite billions invested in ZEVs. The ICCT reports some makers will meet 2025 truck/bus targets (15% reduction from 2019), but gaps persist. ACEA urges an early HDV CO2 review to reflect interdependencies.
Can Europe Accelerate?
Europe’s lag on the Green Deal isn’t for lack of vision—it’s a collision of ideals and practicalities. With EV markets projected to hit 25% share in 2025, and the Clean Industrial Deal offering support, opportunities abound. But as Mercedes-Benz lags on emissions goals while others close in, the continent must balance green zeal with economic safeguards. Will the September 12 dialogue be a turning point? Only time—and policy tweaks—will tell. For now, Europe’s green journey remains a high-stakes race against the clock.
