Drawing on industriAll Europe's recent position on clean cars, Judith Kirton-Darling outlined the scale of the challenges facing Europe's automotive industry and its workforce at the gathering of senior government officials, industry experts and civil society leaders. Domestic demand remains below pre-pandemic levels, with new passenger car registrations falling from around 13 million in 2019 to approximately 11 million today. European manufacturers are also losing ground in key export markets such as the United States and China, while facing intensified competition at home. Production has followed a similar trend, dropping from roughly 15 million passenger cars in 2019 to 11 million in 2025. This has led to underutilised plants and growing uncertainty across supply chains, with significant job losses announced and many workers placed on prolonged short-time arrangements.

"This is creating massive anxiety on the shop floor and throughout the value chain – a situation which is toxic economically, socially and politically," she said, stressing the urgent need for a coherent policy response.

Stability and ambition must go hand in hand

Kirton-Darling called on policymakers to maintain a clear and stable regulatory framework to support investment and anticipation of change. She reaffirmed that decarbonising road transport, particularly through electrification, is both necessary and inevitable, but stressed that the transition must not come at the expense of quality employment.

"Decarbonisation must keep and create good industrial jobs in Europe – not destroy them. This is why a proactive industrial strategy is crucial. The new Industrial Accelerator Act, the corporate fleets regulation and revised public procurement rules are key pieces of the industrial policy puzzle, but the ambition must be strengthened. Industrial workers need to see action as well as good intentions."

While acknowledging the need for targeted adjustments to existing CO₂ standards, she warned against undermining regulatory certainty. Any flexibility must be carefully designed, conditional and based on clear evidence, and should avoid sending mixed signals to industry.

Public support must deliver public value

Judith Kirton-Darling insisted that any regulatory flexibility or public support must come with strong social conditions. Companies benefiting from policy adjustments should be required to invest in European production and safeguard employment.

"Public support and regulatory flexibility must translate into concrete commitments on jobs and industrial activity in Europe," she said. She also highlighted the importance of maximising co-benefits across the wider industrial ecosystem: the transition of the automotive sector can help drive demand for green materials such as steel and aluminium produced in Europe, strengthening industrial value chains and supporting climate goals simultaneously.

Driving demand with European and social conditions

Kirton-Darling underlined the importance of demand-side measures to speed up the take-up of clean vehicles, including corporate fleet regulation, public procurement rules and national initiatives such as social leasing schemes. These instruments, she warned, will only benefit workers and industry if they include strong European content requirements and social conditions. "Demand support must ensure that 'made in Europe' truly means made in Europe – respecting our standards on workers' rights, social dialogue and due diligence," she said.

A Just Transition requires political choices

Judith Kirton-Darling concluded that there is no single solution to the challenges facing the sector. Political choices, she made clear, will determine whether the green transition strengthens or weakens Europe's industrial base, providing a steer for corporate decision-making.