Demand-side measures for clean vehicles made in Europe

Judith Kirton-Darling underlined that the industriAll Europe strongly supports demand-side measures for clean vehicles made in Europe, with a high share of European components and robust social conditionalities. This approach, she argued, should guide EU policy across all vehicle categories.
Recent EU initiatives, including the Industrial Action Plan for the Automotive sector and the forthcoming “Auto Package”, offer promising building blocks. Together with corporate fleet regulation and upcoming public procurement rules, these instruments can help stimulate demand for clean vehicles across different market segments – from upper-range passenger cars to vans – while reinforcing Europe’s industrial base.

Why social leasing matters

Social leasing schemes, she stressed, are an essential part of this policy toolbox.

Cars account for more than 70% of passenger transport in the EU, and in many regions access to a car remains a prerequisite for social and economic participation. Yet transport poverty is a stark reality. On average, around 6% of Europeans cannot afford a car, with huge disparities between Member States – from 1.3% in Luxembourg to almost 19% in Romania – and significantly higher figures among low-income households.

At the same time, Europe’s car fleet is ageing, with an average age of 12.5 years. This slow fleet renewal reflects a growing affordability gap, with direct consequences for CO₂ emissions and air pollution. It also reveals an industrial problem: the European automotive industry has lost significant production volumes, particularly in smaller vehicle segments.

Against this backdrop, social leasing has already demonstrated its effectiveness, as shown by recent national experiences such as in France. Properly designed, it can help households access clean mobility while accelerating fleet renewal and supporting European production.

Linking social leasing to European manufacturing

A core message of the intervention was the need to firmly anchor social leasing schemes in European industrial policy.

By tying social leasing to European manufacturing, the EU can secure quality jobs, uphold labour standards and ensure that public investment benefits European workers and communities – rather than contributing to offshoring or hollow industrial strategies. This is also a question of Europe’s strategic autonomy in a key industrial sector.

To achieve this, Judith Kirton-Darling called for:

• Eligibility criteria that prioritise vehicles manufactured or assembled in Europe, while avoiding so called “screwdriver factories”.
• Public subsidies conditional on European sourcing, reinforcing domestic value chains.
• Strong battery requirements to support the emergence of a genuinely European battery supply chain.
• Full supply-chain transparency, ensuring that social leasing fleets are not built on exploitative labour or environmentally harmful practices, inside or outside Europe.

Such an approach would help secure demand for clean vehicles and give manufacturers the confidence to invest in new production platforms in Europe.

Social leasing is not a silver bullet

While emphasising its importance, Judith Kirton-Darling was clear: social leasing is not a panacea.

It must not generate windfall profits for OEMs, nor can it be used to dilute employers’ responsibilities for workers’ commuting costs. More fundamentally, the affordability gap in mobility is linked to wider structural issues: low wages, job precariousness, insufficient public investment in public services and weak social protection systems.

Reducing these gaps requires strong convergence and cohesion policies, which must remain the main instruments for addressing inequalities between regions and countries.

Scaling up social leasing across Europe will require significant funding – notably from ETS 2 revenues – but may also demand greater fiscal space and flexibility in EU budgetary rules. As Judith Kirton-Darling underlined, the European social model is not simply a legacy to be preserved, but a priority that must be actively built.

Completing the conditions for affordable clean mobility

Finally, she highlighted key enabling conditions for success. From an industrial perspective, electricity prices must be decoupled from fossil fuel price dynamics and carbon pricing when electricity is generated from decarbonised sources. At the same time, charging infrastructure needs to be rolled out much faster, and charging tariffs must ensure that e mobility is affordable for all.

Social leasing can help deliver the green transition in a fair way – but only if it is part of a coherent social, industrial and energy strategy that puts people, workers and European production first.

“We welcome the proposals developed by the S&D group as it addresses the challenges of electrification for workers dependent on cars but left without affordable options as well, while also supporting a just transition for automotive workers. A triple win.”