30/4/2026 |Articles are machine translated
European Commission. | Photo: Unsplash
The Automotive Industry Association (AutoSAP) publishes a detailed position paper, drawing attention to the fundamental discrepancy between the European Commission’s proposal to revise CO₂ emission limits and real market conditions. Despite partial flexibilities, the proposal does not lead to true technological neutrality, does not address the threat of liquidation sanctions for the European industry and continues to neglect customers. AutoSAP therefore presents specific proposals for solutions aimed at aligning regulatory ambitions with economic and market reality.
The December 2025 CO₂ emission target proposal is set for the world we would like, not the one we actually live in today. Although the European Commission bases the proposal on an updated impact assessment, its basic logic remains unchanged. It is based on assumptions defined at the time of the preparation of the “Fit for 55” package, which no longer correspond to today’s economic and geopolitical reality.
Although the Czech automotive industry is doing well so far, from a European perspective the sector is losing ground on all fronts. Since 2017, it has lost approximately 20% of its global market share, while the profitability of the largest manufacturers has fallen by almost half in the first half of 2025 alone. Accessible and affordable energy, a developed charging infrastructure or a competitive European battery supply chain remain a distant dream. At the same time, factory closures and job losses are already occurring. In Germany alone, employment in the automotive industry has decreased by around 6% year-on-year. A fundamental problem remains insufficient demand. Only around 23% of European customers are currently considering buying a battery electric car, while the majority prefer hybrid or conventional powertrains.
The AutoSAP position paper clearly shows that there is a growing structural gap between what the regulation requires and what the market is able to deliver. The share of battery electric cars in new registrations in the EU is currently around 19%. Meeting the 2030-2032 targets would require around 56% – a roughly threefold increase in just four years. Forecasts estimate an annual shortfall of around 1.4 million vehicles, which would generate penalties of up to €18 billion per year from 2030, just for the passenger car segment.
If the current exchange rate does not change, according to the cited study, there is a risk of losing up to 440 billion euros of European GDP by 2035 – a value comparable to the output of the entire annual economy of a country the size of Austria, or approximately a third of the entire European automotive sector.
“Decades of preparation, hundreds of billions of euros of private and public investment. The transition to exclusively pure electric vehicles was a step in the wrong direction. Regulation continues to pressure manufacturers with strict targets and the threat of sanctions, while ignoring economic facts and leaving customers aside. Conditions have developed differently than anyone expected and the only sensible response is fundamental change. Admitting this is not a failure, but our collective responsibility. If we do not do so, Europe risks turning from a global producer into a mere outlet for vehicle imports, and we will also feel this in the Czech Republic,” says Zdeněk Petzl, Executive Director of the Association of the Automotive Industry.
Formally, the proposal reduces the target from 100% to 90% from 2035. However, manufacturers must still achieve zero average CO₂/km emissions for the entire fleet – the remaining 10% between 90% and 100% is to be covered by a credit mechanism.
At first glance, this may seem like more flexibility and opening up space for a wider range of technologies. However, as the real-world case of Norway analyzed in the position paper shows, if the only technology with 0 g CO₂/km emissions remains the battery electric vehicle, this setting leads to a situation where up to 9 out of 10 new vehicles must be purely battery-powered.
“At the EU level, the remaining space for alternative drives, after being divided between manufacturers, brands and segments, breaks down to volumes of tens of thousands of units per model. This is well below the threshold of economically meaningful production – other technologies no longer pay off in practice. The result is practically the same pressure as with the original 100% target. This is not sustainable in the long term – neither for the industry, nor for decarbonisation, nor for Europe’s strategic independence,” says Marco Boggian, Head of Regulatory Affairs at the Association of the Automotive Industry.
AutoSAP remains ready to actively, constructively and professionally negotiate with European and national institutions and partners. At this stage, when the European Commission proposal has been forwarded to the standard legislative process and its further form is now being shaped by the European Parliament and the Council, AutoSAP calls on both institutions to fundamentally modify the proposal so that it reflects economic reality and prevents further weakening of the European automotive industry.
A detailed risk analysis, modeling of sanction impacts and specific proposals for solutions can be found in the attached position paper.
