European Commission chief Ursula von der Leyen is hosting discussions with automotive sector executives and unions to address the challenges facing the EU car industry, which employs 13 million people and represents about 7% of the EU's GDP.

Automakers are under pressure to reduce emissions, facing potential fines of up to 15 billion euros for not meeting CO2 targets by 2025, as cars account for approximately 16% of CO2 emissions in Europe.

The German Automotive Industry Association (VDA) is advocating for a relaxation of fleet emission targets and the continued allowance of combustion engine cars beyond 2035.

France and Italy have urged the EU to forgo imposing fines this year to support the automotive sector during this critical transition phase.

By 2035, the EU plans to phase out the sale of fossil fuel-burning vehicles, pushing for a transition to electric vehicles (EVs) and hybrids.

The automotive sector is grappling with high manufacturing costs and a slow transition to electric vehicles, leading to significant job cut announcements, including Volkswagen's plan to reduce 35,000 jobs by 2030.

Key issues discussed at the Brussels automotive summit include tightened fleet emission targets, which have led to disagreements among manufacturers.

Von der Leyen reiterated the Commission's commitment to the climate goals established during her previous term, despite pushback from the industry.

Volkswagen is considering factory closures in Germany, signaling the industry's struggle, while ACEA's CEO Ola Kallenius voiced concerns that penalties could divert funds from research and development.

The EU is shifting towards a pro-business approach due to complaints about excessive regulations linked to climate and business ethics.

The strategic dialogue aims to enhance the automotive sector's competitiveness amidst concerns over steep emission penalties set for 2025.

Conversely, companies like BMW and Stellantis oppose relaxing EU regulations, arguing they are adequately prepared to meet the targets.