The car industry is under threat: The European car industry needs to keep jobs and car factories

21/2/2025Press releases

On Friday 21 February 2025, prime minister Petr Fiala, transport minister Martin Kupka and MEP Ondřej Krutílek presented concrete steps how to save the European automotive industry. Together with Italy, Austria, Poland and other countries, the Czech Republic is expanding the so-called Competitiveness Defence Alliance, which advocates for substantially greater freedom in meeting emissions targets, real technology neutrality, the lifting of the internal combustion engine ban after 2035 and a number of other steps that will preserve jobs in the European car industry.

The car industry is under threat: The European car industry needs to keep jobs and car factories

"The Czech automotive industry is the backbone of our economy – it accounts for over 9% of GDP and employs more than 500 000 people. But because of poor European regulation and growing competition, they face serious threats. Car companies are struggling to meet the mandated sales of electric cars and are facing billions of dollars in fines that will take away their funds for innovation and competitiveness. For example, the Volkswagen Group estimates these fines at almost CZK 40 billion this year. We have proposed the cancellation of these fines, but the introduction of a five-year average reference framework for the years 2025 to 2029 for a 15% reduction in emissions seems to be an acceptable compromise," said prime minister Petr Fiala.

"It is clear that the European Commission needs to adjust the current system of sanctions for non-compliance with climate targets and spread them over five years. We have to change the conditions that are currently preventing European carmakers from catching up with the technological lead of their competitors. We need to make European cars affordable for citizens and preserve thousands of jobs in the automotive industry," said transport minister Martin Kupka.

Therefore, the Czech Republic, together with other countries, has formed a group of countries that are trying to make the necessary changes. "Together with Italy, Slovakia, Poland, Austria, Romania and Bulgaria, we are building an alliance that shall defend competitiveness. We are seeking the involvement of Germany, France and other countries," the prime minister added. "To achieve change at European level, it is essential to seek partners among like-minded countries," said transport minister Martin Kupka.

The prime minister presented concrete steps leading to the rescue of the automotive industry. "We advocate greater freedom in meeting emission targets, real technological neutrality, European subsidies only for building infrastructure and supporting innovation, the involvement of representatives of Czech car manufacturers in negotiations on the future and, last but not least, the abolition of the ban on internal combustion engines after 2035," said prime minister Fiala.

The prime minister stressed that our initiative to help car companies, which the Czech Republic and Italy presented at the European Council in December, has already worked and the European Commission has launched a Strategic Dialogue with the automotive industry. Several rounds have already taken place and the Commission will present its Automotive Action Plan early in March. Subsequently, the European Council meeting in March will focus on competitiveness, where the Czech Republic will advocate a greater focus on the automotive industry as an essential part of the European economy.

MEP Ondřej Krutílek pointed out that a letter to the President of the European Commission on the critical situation of the automotive industry, signed by 117 MEPs, had already been sent from the European Conservatives and Reformists group last October. "We now have the key points in the draft resolution in paragraph format. The first urgent point is to address fines on car companies, ideally cancelling them altogether or spreading their payment over at least five years. Another thing is the revision of the CO2 regulation already this year and the lifting of the ban on the sale of new cars with internal combustion engines in 2035. We want to push it through at the next meeting of the EP plenary in March or April," Krutílek said.

The European automotive industry is a key sector, accounting for 7% of EU's GDP. This sector remains vital to Europe's industrial base, innovation and employment. The automotive industry currently employs 13 million people across the EU. Preserving affordable and accessible mobility for all EU citizens is one of the essential prerequisites for maintaining social cohesion within the EU. It is one of the key European values and a condition for maintaining broad support for European institutions.