The top European auto industry association called the EU on Thursday for "urgent" assistance as carmakers continue to struggle with slumping electric vehicle (EV) sales and stricter emissions regulations due next year.
The European Automobile Manufacturers' Association (ACEA) said the industry was trying its best to comply with decarbonization targets but was hamstrung by problems, including a shrinking electric car market, lack of charging infrastructure and the erosion of EU manufacturing competitiveness.
In a formal request to Brussels, the industry lobby group asked the "EU institutions to come forward with urgent relief measures before new carbon dioxide targets for cars and vans come into effect in 2025."
Europe has been racing to produce more EVs as part of its green transition, with the clock ticking on an EU deadline to phase out the sale of fossil fuel-burning cars by 2035.
But after years of growth, electric car sales began falling at the end of 2023 and now account for just 12.5% of new cars sold on the continent.
According to the ACEA, car sales have also stagnated and remain around 18% lower than pre-pandemic levels.
"We're playing our part in this transition," the ACEA's appeal said, pointing to manufacturers' adoption of EV technology.
"We are missing crucial conditions to reach the necessary boost in production and adoption of zero-emission vehicles: charging and hydrogen refilling infrastructure, as well as a competitive manufacturing environment, affordable green energy, purchase and tax incentives, and a secure supply of raw materials, hydrogen and batteries," it added.
"This raises the daunting prospect of either multibillion-euro fines, which could otherwise be invested in the zero-emission transition, or unnecessary production cuts, job losses, and a weakened European supply and value chain."
The lobby group asked the commission to bring forward a planned review of the carbon dioxide regulations, currently slated for 2026 and 2027.
Car sales at 3-year low
A separate report by the ACEA on Thursday revealed that new car sales in the EU fell 18.3% in August to their lowest in three years, dragged by double-digit losses in major markets Germany, France and Italy.
Sales of fully electric cars slumped 43.9% in August, falling for the fourth consecutive month, as the bloc's biggest EV markets, Germany and France, recorded drops of 68.8% and 33.1%, respectively, ACEA said.
Car sales in Europe have dropped well below pre-COVID-19 levels, with carmakers such as Volkswagen warning that the trend might not change in the foreseeable future.
EV sales growth has also slowed, partly due to diverging policies on green incentives, while regulators have imposed hefty tariffs to keep out cheap Chinese EVs.
In August, sales of battery electric and plug-in cars fell by 43.9% and 22.3%, respectively, while those of hybrid-electric cars rose 6.6% to a market share of 31.3%.
Registrations at Europe's three largest carmakers, Volkswagen, Stellantis and Renault, all fell from a year earlier by 14.8%, 29.5%, and 13.9%, respectively.
Sales at EV maker Tesla dropped 43.2%, and those for China's SAIC Motor were down 27.5%.
On the other hand, the market share of hybrid electric cars has increased in the EU in recent months as buyers see them as an affordable compromise between all-combustion and all-electric.
To inject new stimulus into the EV market, Germany agreed in September on tax deductions of up to 40% for companies on their sales of electric cars, after last year ending a subsidy program designed to help speed up the green transition.
However, campaign group Transport & Environment said earlier this week that battery-electric cars sold in the bloc are set to reach a total market share of between 20% and 24% by 2025, mostly because of lower selling prices.