Ford CEO: Europe is risking the future of its auto industry
Setting unrealistic EV regulations only to adjust them when consumers do not show up is a recipe for turmoil
Europe’s car industry is watching Brussels with concern — again. The European Commission plans to unveil new rules for the transition to electric vehicles, including the evolution of carbon emissions targets. The current rules dictate a rapid shift to EVs. The elephant in the room is that European customers — both individuals and businesses — simply are not buying EVs in big numbers.
Brussels is not alone in issuing regulations that are out of step with market reality. The UK government recently announced a new tax to charge EV drivers 3p for every mile driven, while at the same time offering a discount of up to £3,750 on a new EV. One foot on the gas, one on the brake: these kinds of contradictions leave buyers confused and frustrated.
European policymakers say they want a sustainable auto industry. But setting unrealistic regulations only to adjust them at the end of each year when consumers do not show up is a recipe for turmoil. This approach disrupts a complex cycle of product design, engineering and supply chains that require long lead times and billions in investment. We urgently need a regulatory framework for Europe that provides a realistic and reliable 10-year planning horizon.
On one side, we face the world’s most aggressive carbon mandates, regulations that demand a pace of electrification that is decoupled from the reality of consumer demand. On the other, we face a flood of state-subsidised EV imports from China, structurally designed to undercut European labour and manufacturing.
China has more than enough manufacturing overcapacity to sell to every new vehicle customer in Europe. Chinese brands have doubled their market share in the region in just 12 months, reaching a record 5.5 per cent in August. Meanwhile, the market share of EVs in the EU has stagnated at about 16 per cent — well behind the 25 per cent required to meet Brussels’ 2025 targets.
EU vehicle production is now 3mn units below pre-Covid levels. Plants are going dark. In 2024 alone, 90,000 jobs in the automotive industry evaporated. These are the kinds of jobs that sustain European social stability. This is not a transition. It’s more like a wind-down of Europe’s automotive industry.
To be clear, the industry is not asking for a bailout. We are not asking for protectionism to shield inefficiency. At Ford, we will continue to do the hard work of restructuring. We have closed legacy facilities, reduced our workforce and slimmed down costs to become more agile. We have invested billions in transforming our manufacturing operations in Europe and offer our customers greater choice in making the shift to an electric or hybrid vehicle.
But if Europe wants to avoid becoming a museum of 20th-century manufacturing, we need an urgent reset and a long-term plan.
The approach to regulation — mandate it and they will buy it — has failed. We must align carbon targets with actual market adoption and provide automakers with a realistic and reliable 10-year horizon. This includes giving consumers the option to drive hybrid vehicles for longer, bridging the gap rather than forcing a leap to EVs they aren’t ready to take.
We need to incentivise this transition. European manufacturers have invested hundreds of billions in EVs. Governments must match that commitment with consistent incentives to buy them and a charging infrastructure that extends beyond wealthy urban centres into rural areas.
The current approach to commercial vehicles is a tax on the backbone of Europe’s economy. Only 8 per cent of new vans are electric, yet regulations treat them like luxury sedans. These are tools for plumbers, florists and builders. Aggressive carbon targets on commercial vehicles unfairly penalise the small and medium-sized businesses that generate more than 50 per cent of Europe’s GDP.
Ford has called Europe home for more than 100 years. We want to be part of its green future and we plan to keep investing. But Europe faces a binary choice. It can foster a thriving, competitive auto industry that leads the world in green technology. Or it can cling to unachievable targets and watch as its market is dominated by imports while its own factories rust.