The European Union’s move to eliminate carbon-emitting vehicles by 2035 is vital not just for climate goals, but also for the economic future of Europe.
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According to a new study by Transport & Environment (T&E), maintaining the 2035 zero-emission vehicle (ZEV) mandate alongside robust industrial policies could boost annual car production to 16.8 million units, matching the pre-2008 level.
However, the report warns, scrapping or weakening the regulation could result in the loss of up to 1 million automotive jobs across the EU and the collapse of two-thirds of planned battery investments.
European automakers are already under pressure from rising costs, strong competition from China and US, and a new 25 percent US tariff on car imports. In May, the European Parliament eased some CO₂ rules but kept the 2035 restriction on fossil-fuel vehicle sales.
T&E Vehicles & Emobility Supply Chains Senior Director Julia Poliscanova said, “It’s a make or break moment for Europe’s automotive industry as the global competition to lead the production of electric cars, batteries and chargers is immense.”
If the 2035 rule stays in place, the study forecasts an 11 per cent increase in the automotive sector’s contribution to the EU economy by 2035. Job losses in traditional vehicle manufacturing could be offset by over 100,000 new battery jobs by 2030 and 120,000 roles in EV charging by 2035. But scaling back without a plan could cost the sector EUR 90 billion (USD 105 billion) by 2035.
At the same time, demand for aluminium in EVs is set to rise sharply. With characteristics like light weight, corrosion resistance, and good thermal conductivity, aluminium is increasingly used in vehicle structures, battery enclosures, and heat-management systems. Projections suggest global aluminium use in EVs could reach 16 million tonnes by 2035.
Decisions made today will have lasting effects beyond climate action, influencing employment, industrial growth, and vital supply chains throughout Europe.
Also read: Maharashtra aims for 30% EV by 2030! Confidence boosted as India ramps up production and trade.
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