If the 2035 zero emission target is dropped, EU could lose 1 million jobs in the automotive industry

Europe’s automotive industry could lose one million jobs and up to €90 billion in value if the EU backtracks on its 2035 zero-emission car sales ban, a new report warns.

According to a July 2025 study by Transport & Environment (T&E), a return to producing nearly 17 million cars per year – matching post-2008 crisis levels – is possible, but only if the European Union holds firm on its commitment to end sales of fossil fuel-powered cars and vans by 2035 and backs the transition with the right industrial policies.

In contrast, scrapping 2035’s zero-emissions target and failing implement a robust industrial policy could spell disaster for Europe’s auto industry.

“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,” said Julia Poliscanova, Senior Director for Vehicles & Emobility Supply Chains at T&E, in the group’s official statement cited by Reuters.

What is at stake if the EU abandons its 2035 target of zero emissions

T&E’s report outlines two dramatically different futures depending on whether or not the EU follows through with the 2035 ban:

• If the target is met and policies to support domestic EV production are implemented:
  • The contribution of the automotive sector to the economy would increase by 11 percent by 2035.
  • By 2030, over 100,000 new jobs in battery manufacturing could be created. Another 120,000 would be needed for EV charging.
• If the target is weakened or scrapped but no strategy is in place:
  • One million jobs in the automotive industry could be lost across Europe.
  • The value of the auto supply chain could shrink by €90 billion by 2035.
  • The battery industry could lose up to two thirds of its planned investments.

Trump’s tariffs are adding pressure to the situation

European automakers are already under pressure. The situation is difficult because of high operating costs, and fierce competition from China and America.

Many manufacturers have withdrawn their forecasts of 2025 due to President Donald Trump’s 25% tariffs on EU cars imported.

Even though the European Parliament lowered some emission targets in May, the fossil fuel vehicle prohibition for 2035 has not been scrapped yet.

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