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The European Commission will provide 1.8 billion euros over two years to battery manufacturers in the EU
On Wednesday, the European Commission urged EU governments to offer tax incentives to promote the purchase of electric and low-emission vehicles, focusing on corporate fleets to boost the automotive industry. The industry is currently «at risk» and falling behind in the development of strategic technologies compared to competitors like China.
This was highlighted by European Commissioner for Sustainable Transport and Tourism, Apostolos Tzitzikostas, during the presentation of the Commission’s action plan to save the automotive industry. The roadmap does not yet include any legislative proposals but encourages Member States to take preemptive action ahead of Brussels.
«Member States could already consider the possibility of granting tax advantages to zero-emission vehicles, establishing rules for taxis and car-sharing services based on their emissions, or encouraging rental companies, especially those used by tourists for short trips, to use zero-emission cars,» the Greek politician pointed out.
The Commission is inviting public authorities to offer measures that create an incentive to choose zero-emission vehicles over conventional ones and to use part of the revenue from road use instruments for public infrastructure supporting recharging and refueling.
At the same time, as part of its eco-VAT initiative scheduled for 2026, the European Commission will study a gradual elimination of the VAT deduction related to conventional vehicles.
SUPPORT FOR BATTERY MANUFACTURERS
The package of measures to revive the industry, maintain a strong European production base, and avoid strategic dependencies also includes 1.8 billion euros in support from the European Innovation Fund over two years for companies manufacturing batteries for electric cars in the EU.
Additionally, the Commission will continue developing the regulatory framework for autonomous vehicles with actions supported by public-private investments of around 1,000 million backed by the Horizon Europe Program during the period 2025-2027.
THREE YEARS TO REDUCE EMISSIONS
This action plan also includes a proposal to relax the emission reduction obligations timeline for the automotive industry, as announced by the President of the European Commission, Ursula von der Leyen, on Monday. Brussels expects to present this amendment later this month.
This change allows manufacturers three years (instead of one) to meet the set objectives before facing significant fines for non-compliance.
The modifications proposed by the head of the EU Executive also require approval from the Council (governments) and the European Parliament, the two co-legislators whom Von der Leyen has urged to proceed promptly.
The urgency arises because the regulation sets a 15% reduction target for carbon dioxide (CO2) emissions for 2025 (compared to 2021 levels), and so far, Brussels had argued that no extensions were necessary as the industry has been aware of the timeline since it was agreed upon in 2019.
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