European Commission Launches “Small Affordable Cars” Initiative to Boost Homegrown Innovation
In a bold move to reshape Europe’s automotive future, European Commission President Ursula von der Leyen unveiled a new initiative aimed at revitalizing the continent’s car industry through the development of small, affordable vehicles.
Speaking at the 2025 State of the European Union (#SOTEU) address, von der Leyen emphasized the need for strategic investment in compact, cost-effective mobility solutions:
“We should invest in small, affordable vehicles. We will propose to work with industry on a new Small Affordable Cars initiative. The future of cars – and the cars of the future – must be made in Europe.”
The initiative responds to growing consumer demand for budget-friendly electric vehicles and aims to counterbalance the influx of competitively priced models from China. European manufacturers have struggled to match these offerings, often focusing on premium segments A.
In addition to the new car initiative, von der Leyen announced a €1.8 billion package to accelerate battery production across Europe, reinforcing the EU’s commitment to clean tech and energy independence A.
The Commission also signaled a potential review of its 2035 combustion engine ban, amid pressure from member states and industry leaders to reassess the timeline for phasing out petrol and diesel vehicles A.
This strategic pivot positions Europe not only as a hub for innovation but also as a defender of industrial sovereignty in the face of global competition.
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