The EU is jeopardizing the future of its automotive industry with unrealistic regulations – Ford CEO

Ford CEO Jim Farley warned that Europe could undermine its own automakers if it continues to set ambitious rules and then adjust them at the end of each year when consumer demand falls. He wrote about this in his column for the Financial Times.

According to Farley, this approach disrupts the complex cycle of planning, design, and product supply chains, which require long lead times and billions in investment.

The Ford CEO notes that the combination of strict emissions targets, local content requirements, and changing bans on internal combustion engines creates political problems that make new investments difficult.

According to him, the problem is that while European regulators are tightening and revising regulations, Chinese brands continue to gain market share with cheaper electric vehicles.

Chinese brands doubled their market share in the region in just 12 months, reaching a record 5.5% in August. At the same time, the market share of electric vehicles in the EU has stalled at around 16%. Car production in the EU is now 3 million units lower than before the Covid pandemic.

Ford’s CEO warns that this is not a transition period, but rather a contraction of the European auto industry. He notes that the industry is not asking for financial aid or demanding protectionism to shield inefficiency. The EC must align carbon emission targets with actual market acceptance and provide manufacturers with a realistic and reliable 10-year horizon, as consumers are not ready for a forced transition to electric vehicles — it needs to be incentivized.

It should be recalled that, according to its latest report, 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 this, the overall outlook for the sector remains subdued due to persistent structural problems and external risks.