EESC urges EU to act for fair and competitive future for automotive sector

The European Economic and Social Committee (EESC) recently adopted an opinion welcoming the European Commission’s Industrial Action Plan, designed to help Europe’s automotive industry navigate a period of profound change. The ongoing shift towards cleaner and more digital vehicles must be carefully managed to protect jobs, support businesses, and ensure that no region or worker is left behind in the transition.

Europe’s automotive industry remains a cornerstone of the economy, employing 3.5 million people directly in manufacturing and another 4.5 million across related services such as repairs, maintenance, and logistics. In 2024, the sector also recorded a healthy trade surplus of nearly EUR 90 billion. And yet, despite this strength, the industry faces significant challenges as it adapts to rapid technological change, evolving consumer expectations, and growing international competition.

Co-rapporteur Guido Nelissen captures this shift well: ‘The automotive sector is moving from hardware to software, from mechanics to electronics, and from conventional to electric powertrains. The automotive industry should seize the opportunities of the green and digital transformation of the automotive ecosystem and turn it into a competitive advantage.’

While the EESC fully supports the EU’s ambitious climate goals and the transition to zero-emission vehicles, it warns that this transition must be accompanied by strong social and economic measures. Without these, the Committee cautions, the shift risks exacerbating inequalities between different regions and social groups within the EU.

To address these challenges, the EESC calls for a comprehensive European strategy focused on investing in skills development, innovation, infrastructure, and the circular economy. It highlights the vital role of small and medium-sized enterprises (SMEs), which form the backbone of the automotive supply chain but often lack the resources to adapt quickly to change.

It is equally important to support the workers most heavily affected by this transformation. The opinion points to the need for large-scale reskilling programmes, backed by effective mobilisation of EU funds such as the Social Climate Fund. Coordinated efforts across Member States and sectors will be essential to facilitate smooth job-to-job transitions and prevent social disruption.

The Committee also highlights the direct impact that the move to battery electric vehicles (BEVs) is having on employment. Because BEVs require fewer components and less assembly labour than traditional internal combustion engine vehicles, job losses are already hitting certain areas. In 2024 alone, restructuring affected nearly 95 000 automotive workers. To prepare the workforce for these changes, the EESC proposes creating an EU skills passport to recognise qualifications across borders, and strengthening links between industry and education to equip future workers with the right skills.

Equally important is the role of social dialogue. Involving workers through consultation and collective bargaining will be crucial to achieving a just and successful transition.

Innovation remains a key strength for Europe’s automotive sector. The opinion highlights that the industry spends 15% of its value added on research and development. Despite this, the EU faces a gap in digital and software technologies compared to global competitors. To close this divide, the EESC calls for increased investment in battery production and in connected and autonomous vehicle technologies, and the development of harmonised software standards. Such measures will reduce dependence on non-European technology providers and avoid costly fragmentation within the industry.

Trade pressures also weigh heavily on the sector. Rising imports from China and other regions threaten European competitiveness, prompting the Committee to call for stronger trade defence measures. At the same time, the EESC supports reshoring the production of key parts to Europe and advocates new trade agreements that include strong provisions on sustainability and resilience.

Finally, the Committee stresses the need to improve the coordination of policies related to the electrification of transport. This includes accelerating the deployment of charging infrastructure, integrating smart grid technology, and supporting the downstream sector, such as repairs and maintenance, which plays a vital role in decarbonisation but faces many of the same challenges as vehicle manufacturers.