The 2024 European elections will be a key moment for the future of the climate policy agenda and the Union’s sustainability goals. In the last five years, the Von der Leyen Commission has formulated and implemented the policy framework aimed at attaining climate neutrality by 2050. As a part of such an effort, the bloc adopted a hallmark legislation banning the sale of new cars running on combustion engines from 2035 last year, pushed by no one else than the Commission President. The decision to phase out the sales of ICE-powered vehicles by 2035 has been dubbed both, a groundbreaking climate victory and a mirage, depending on who you ask. Admittedly, some EU regions would be substantially more affected than others.

Consider Europe’s central German and Eastern European automotive manufacturing cluster, for example. At its heart, Slovakia, a small former communist country of 5.5 million people boasts the world’s greatest number of cars made per capita, hosting some five major Original Equipment Manufacturers (OEMs), including Volkswagen, KIA, Stellantis, Jaguar Land Rover, and the incoming Volvo. According to the country’s Association for Automotive Industry, moreover, car-making accounts for some 46.5% of the total sales in the industry, and 41.4% of exports, while employing about 170,000 people directly, and many more when counting a dense network of almost 400 local suppliers.

The phase-out mandated by the EU will dramatically transform manufacturers’ needs pertaining to production processes, supply chains, critical raw material sourcing, and talent—none of which these manufacturing heavyweights have readily lined up, or, in many cases, propped up by robust industrial strategies. On a European Union scale, neglecting to tackle these challenges may lead to significant disruption within an industry that sustains employment for 13 million individuals and constitutes 7% of the EU economy.

And then there is China, of course, which has made a quick headway to Europe’s EV mass car market undercutting local competition with its affordable (and possibly illegally subsidised) e-cars. For example, BYD Co.'s Dolphin is priced approximately €7,000 lower than a comparably equipped VW ID.3, which Volkswagen initially introduced as the Beetle of the EV era.

Worried that the move towards electromobility is happening too fast, and, even worse, is divorced from the automotive industry’s readiness, with serious barriers to take up on the consumer side, has compelled politicians to push back. Recently, even von der Leyen’s own conservative Christian Democrats pledged to scrap the law in their draft EU election program, situating her in an odd spot ahead of the upcoming EU election.

It is clear why EVs are seen as a cornerstone strategy for lowering Europe’s transport emissions, with cars being responsible for around 12% of carbon emissions released in the EU. But many stakeholders – including manufacturers, suppliers, workers, and political leaders in affected regions – may not share the conviction of EU policymakers that the EV revolution is firmly underway. Persisting challenges for manufacturers include high research and innovation costs, severe software problems issues, patchy EV adoption rates; and on the consumer side, yawning gaps in charging infrastructure, and prohibitive prices. In several EU countries, the average EV price is still as much as 50-75% north of its ICE counterpart.

As backers of the ICE-car sales phaseout clap back by unleashing campaigns aimed at ensuring no backsliding after June's European election, two approaches emerge as important, as to whether the landmark ICE-car sales phaseout law holds up and the EU stays true to its climate ambitions to reduce its greenhouse gas emissions by 55% by 2030 and achieve net zero by 2050.

One is stakeholder cooperation. With petrol vehicles remaining comfortably in the lead across the OECD region, and the weight of the EV transformation disproportionately shouldered by car-makers, suppliers, and consumers of certain regions, EU policymakers may need to become more attuned to the needs of those most affected by the transition and become a part of solution-seeking if they expect buy-in.

Second, the transition needs to be reinforced with targeted policy incentives addressing the fundamental challenges plaguing EV manufacturing, adoption, and infrastructure. Financial incentives across the bloc vary wildly, with some governments failing to boost EV take-up, and/or accessibility to EV financial incentives being often hindered by heavy administration. The policy should also address doom loops between charging station manufacturers and consumers, where the slow EV uptake dissuades infrastructure investment, leading to further reluctance to purchase EVs due to inadequate charging facilities. The list goes on, underscoring the need for comprehensive policy reforms, in addition to the ban.

As we navigate the path forward, the upcoming 2024 EP elections present a pivotal opportunity to place the industrial transformation agenda at the heart of EU policy. But without an incentive-driven and inclusive approach, the EU's signature policy may be side-tracked. Getting it right matters, as Europe’s industrial transformation stands as a litmus test for the resilience and adaptability of its economy, as we stand at the cusp of a new era defined by technological disruption and geopolitical shifts.

Sona Muzikarova is a Policy Leader Fellow at the School of Transnational Governance. Muzikarova is a political economist, policy advisor, and consultant, focused on the region of Central and Eastern Europe. She is an Eisenhower 2023 Fellow and a Nonresident Fellow at the Atlantic Council.

All opinions expressed in the blog section are solely of the authors.