For more than a decade the European Union positioned itself as a global frontrunner of the green transition. Through ambitious climate targets, strict emissions standards and sweeping regulations on industry, the EU pushed and threatened for a rapid shift toward decarbonization — especially in the automotive sector. Entire supply chains were reorganized, billions were invested, and manufacturers were told that the future was electric. The 2035 deadline to ban the sale of new combustion-engine cars became a symbol of Europe’s commitment.
Today, that symbol is cracking.
The recent push by Germany’s leadership to revisit the 2035 cutoff — most publicly signalled by Chancellor Friedrich Merz’s announcement to write to Commission President Ursula von der Leyen in November 2025 asking for a “technology-neutral” approach — represents a dramatic pivot. The Commission has since said it is open to consider a range of technologies and to reassess exactly how the phase-out is implemented. These public interventions, and press reports that the Commission may delay issuing its regulatory package, have left manufacturers and workers scrambling for clarity and most EU citizens left with that feeling of an amateurishness approach and shallow understanding by the EU parliament.
For an industry that reorganized under the assumption of a fixed political timeline, the reversal is more than an inconvenience — it feels like a betrayal. Multiple independent and industry sources recorded steep restructuring announcements during 2024 and 2025: a tranche of factory closures, plant downgrades and headcount reductions were publicly communicated across member states. Eurofound’s survey of announcements in 2024 calculated forthcoming net losses from announced restructurings at roughly 53,669 jobs across the EU — or up to 88,669 jobs if Volkswagen’s December 2024 announcement is included. The automotive suppliers’ trade body CLEPA and other industry analyses reported similar waves of cuts and flagged continued risk into 2025.
Separately, the think-tank Transport & Environment warned that a poorly managed transition could put the sector at risk of far larger losses over time — projecting scenarios that would remove up to 1 million jobs by 2035 compared with 2025 conditions in its most adverse scenario. These figures show wide uncertainty — but they converge on one point: electrification plus policy instability has already cost jobs and risks costing many more as Eurofound reports.
Adding to the confusion is a change in emphasis from influential voices who once championed the urgency of decarbonization. In late October 2025 Bill Gates published a memo arguing that, while climate change remains a serious long-term issue, immediate priorities must focus more on reducing present suffering from poverty and hunger and on strengthening resilience in the poorest communities. Some observers have read this as a step back from prioritising aggressive short-term decarbonisation timelines in favour of a broader development agenda — a tone that, when combined with political hesitancy in Brussels and national capitals, deepens the sense that the rules of the game may shift again. Other observers have also wondered what triggered this ‘new’ sense of urgency. The aid to the ‘poor and the hungry’ narrative has unfortunately engaged the minds of many so-called intellectuals, ‘nouveau riche’ and enlightened politicians for far too many decades with questionable outcomes. Or does the shift in priority make sense, now that the 2035 green transition deadline is in question, suggesting we may need to refocus on supporting the poor and the vulnerable (which, as of today, might also include the jobless professionals generated by the auto industry)?
The human and economic effects of this shift in policy by the EU are already visible at national level. Italy — one of Europe’s largest car markets and a country with a sizable manufacturing and supply chain footprint — illustrates the point. Industry data show that Italy’s total passenger-car registrations in 2024 amounted to roughly 1.56 million units, a small decline of about 0.5% year-on-year, while fully electric vehicle (BEV) registrations were only ~65,000 units (≈4.2% market share), down slightly from 2023.
Monthly and quarterly data across 2024 also show sharper drops in certain months (for example October and November 2024 saw double-digit declines in some months compared with 2023), underlining volatility tied to incentive changes, slower BEV uptake and consumer uncertainty. Those national registration figures are published by Italy’s industry association (ANFIA) and are summarised in EU/market trackers such as ACEA and the EU Alternative Fuels Observatory. The subdued Italian BEV share — well below several EU neighbours — has translated into plant downtimes and workforce pressure at firms exposed to internal-combustion engine production.
This abrupt change in direction highlights a deeper problem: climate policy has often been implemented with a heavy legislative burden but without sufficient long-term stability. Policy flip-flops — or credible threats of them — magnify the cost of transition because firms cannot rely on a stable regulatory horizon when they make long-term investment decisions on production lines, battery supply chains and skills retraining. European manufacturers were pressured (and threatened) to pivot toward electric mobility at breakneck speed — sometimes faster than charging infrastructure, secondary markets and consumer demand could support. The result has been production slowdowns, profitability stress, and repeated rounds of job reductionsacross OEMs and suppliers.
The frustration now felt across the industry is not simply about a modified 2035 target.
It is about the realization that policies which required companies to bear enormous upfront costs are now being reconsidered as though they were experiments. That inconsistency undermines trust — not just in climate legislation but in governance itself.
Back in 2014 Sergio Marchionne described this whole EV mania as “industrial masochism”. He was not against transition to EV. He questioned the timing, the deadlines and a number of critical factors that, quite evidently, politicians had thought to be totally irrelevant.
Not to mention that fragmented national policies in Europe, the lack of effective legislation and support from the EU has, as of today, favoured Chinese EV production and exports versus European products.
The automotive industry has several direct and indirect implications on domestic and global economies and is a relevant factor in global geopolitics. It should not be treated lightly or with a certain degree of approximation in its strategy implementation. The automotive sector involves high end technology, commodities and millions of employees impacting on everyone’s everyday life.
Climate change is real, and long-term decarbonization remains essential. But a transition of such magnitude must be credible, predictable and economically coherent.
Abrupt policy U-turns, or even credible signals that the rules will change, risk eroding public and investor support and weakening Europe’s competitiveness. If the EU wants to maintain global leadership in sustainability while protecting jobs, it must pair ambition with stability — and design transitional arrangements that avoid leaving workers and factories stranded mid-shift.
