EUROFER has improved its expectations for EU automotive production in 2025

Uncertainty surrounding electric vehicles and trade barriers are holding back the industry's recovery in Europe

According to its latest report, the European Steel Association EUROFER has improved its expectations for production dynamics in the EU automotive industry in 2025, forecasting a 3.8% y/y decline instead of the previously expected 4.3% y/y decline. Despite the slight improvement in expectations, the overall outlook for the sector remains subdued due to persistent structural problems and external risks.

In Q2 2025, EU automotive production fell by 4.3% y/y, marking the sixth consecutive quarter of negative growth. Since 2024, the industry has been under pressure due to uncertainty over electric vehicle production standards and slow development of charging infrastructure, which complicates the transition to decarbonization targets and the planned ban on the sale of internal combustion engine vehicles from 2035.

Trade barriers and growing global tensions remain an additional deterrent. In particular, the introduction of 15% tariffs on European car exports by the United States is negatively affecting automakers’ investment decisions and holding back production growth. At the same time, the demand situation is showing cautious signs of stabilization. In the first nine months of 2025, new car registrations in the EU increased by 0.9% y/y, and in September, sales increased by 10% y/y thanks to the launch of new models.

The updated forecast predicts only a moderate recovery in 2026, at 1.4% y/y, with production volumes remaining significantly below pre-crisis levels in 2019.

According to EUROFER forecasts, apparent steel consumption in the EU will begin to recover in 2026, increasing by 3%. This will happen provided that industrial conditions improve and global tensions ease, but these factors remain difficult to predict at this time. At the same time, in 2025, the indicator will decline for the fourth consecutive year.