Road transport in the EU on the threshold of a new decade: what it means for automotive in Central Europe

European road transport is undergoing a profound transformation. Tightening regulation, rapid technological progress in batteries, software and charging, and growing competition from China are increasing the pressure for faster adaptation. For Central Europe this implies the need to accelerate decarbonisation while maintaining cost and technological competitiveness.

The main drivers of change are regulatory ambitions, technological progress and competition from China, which translate into pressure for faster electrification, cost optimisation and a higher pace of innovation.

In 2025, the European Commission presented the Action Plan for the Future of the Automotive Industry, designed to help maintain the competitiveness of the European automotive industry in an environment of rapid decarbonisation and growing global competition.

Motorisation and age of the vehicle fleet

Markets in Central and Eastern Europe (CEE) show a higher vehicle ownership rate and older vehicle fleets than Western Europe. In the Czech Republic, there are approximately 608 passenger cars per 1,000 inhabitants, which exceeds the EU average of around 576 as well as Germany’s roughly 590. Italy, with approximately 711 vehicles per 1,000 inhabitants, represents the upper boundary of saturation.

The average age of passenger cars in the Czech Republic is approaching 16 years compared with around 12 years in the EU. In the case of trucks, total numbers are changing more slowly and the share of rigid trucks is increasing at the expense of tractor units. This reflects the strengthening of urban and regional logistics and the impact of emissions standards.

Higher vehicle ownership and an older vehicle fleet in CEE create significant potential for renewal, with the composition of trucks shifting towards rigid trucks.

Battery electric vehicles (BEV)

The share of battery electric vehicles in the EU has been growing over the long term. In the CEE region, demand is weaker, but the charging network is becoming denser. In the Czech Republic there are approximately five vehicles per one charging point, compared with around seven in the EU. The high‑power charging segment is developing the fastest and the number of stations with an output above 350 kW is increasing. This is lowering barriers to wider deployment of electromobility in fleets.

Real emission footprint of BEV and impacts on the energy sector

Battery electric vehicles are not literally zero‑emission, but under regional conditions they achieve approximately 42 percent of the emissions intensity compared with the average of other vehicles. As power generation decarbonisation progresses, their footprint will further decrease. Additional electricity consumption will grow gradually, and the main challenge is the integration of high‑power stations into urban distribution grids and the broader deployment of smart charging, vehicle‑to‑grid (V2G, bidirectional connection of the vehicle with the power system) and dynamic tariffs.

The real‑world emissions intensity of BEV is significantly lower than that of internal combustion vehicles. For grid stability, integration of high‑power charging and smart charging management is key.

EU regulatory pressure on emissions

In less electrified CEE markets, new registrations show higher emissions according to the Worldwide harmonized Light vehicles Test Procedure (WLTP) than the EU reference. The average emission intensity of new vehicles is around 133 g CO₂/km compared with approximately 115 g CO₂/km at EU level. The framework of Regulation (EU) 2019/631 provides for the gradual reduction of fleet emissions and imposes penalties on manufacturers of EUR 95 for every gram of CO₂/km over the target value for each newly registered vehicle. For manufacturers with a predominance of combustion and hybrid models, this means the need to electrify their model mix faster and reduce real‑world emissions in operation to avoid the accumulation of penalties.

This framework is complemented by a proposed further revision of CO₂ standards after 2030, which aims for a significant reduction of direct tailpipe emissions by 2035 while allowing part of the additional reduction to be achieved through decarbonisation of the value chain (for example via low‑carbon materials or certified fuels). For manufacturers and importers in Central Europe, this means even greater pressure to accelerate investment in BEV and other zero‑emission vehicles and to systematically manage fleet emissions and the carbon footprint of the supply chain if they wish to meet tightening limits without a substantial increase in penalty costs.

LCV & HCV

Electrification of light commercial vehicles up to 3.5 tonnes (LCV) is progressing thanks to their technological similarity to passenger BEV. For heavier heavy commercial vehicles (HCV), pilot projects and deployment in urban logistics and on shorter routes still prevail. Within the EU, registrations are accelerating mainly in Germany and the Nordic countries, where support is stronger and infrastructure more advanced.

The proposed targeted revision of emissions standards for heavy‑duty vehicles is also intended to support earlier deployment of electric trucks in the period 2025–2029 through additional credits if manufacturers are able to bring their fleet‑average emissions below the 2025 target level, thereby making it easier to meet the more stringent 2030 target. From the perspective of urban and regional logistics, this creates a window in which manufacturers from CEE can, together with logistics companies, launch pilot projects of electric truck‑and‑trailer combinations before these solutions become a standard driven by regulation and the market.

Batteries: technology, prices and second life

The global battery market is growing. Solid‑state batteries and silicon anodes are gaining ground, increasing energy density and shortening charging times. Battery prices in the EU are falling and regional differences are also related to the chemical composition of batteries. In Europe, lithium‑ion batteries based on nickel‑manganese‑cobalt (NMC) predominate, while in China cheaper lithium‑iron‑phosphate batteries (LFP) are more widespread. Second‑life use of batteries can significantly boost stationary energy storage. To make second‑life batteries competitive with recycling, costs need to be reduced to approximately below USD 50/kWh. In addition, the EU is introducing minimum shares of recycled materials under Regulation 2023/1542.

Alongside regulation, the EU is also seeking to strengthen the domestic battery ecosystem through targeted investment. The Action Plan provides for a “Battery Booster” package, which is to release approximately EUR 1.8 billion from the Innovation Fund to support batteries manufactured in the EU, and for the continuation of the BATT4EU partnership with a dedicated budget of around EUR 350 million for next‑generation battery research. These initiatives aim to attract investment in cell and module manufacturing and recycling capacities in the EU and to reduce the dependence of the European automotive industry on non‑European suppliers.

Chinese competition in the EU

The share of Chinese battery electric vehicles in new registrations in the EU has shifted in recent years from roughly eight to seventeen percent. The Geely Group holds a significant share and BYD is rapidly building a European manufacturing footprint. European manufacturers thus face pressure on price, speed of model launches and scaling of new technologies.

Trajectory to 2035

Government plans in the region aim for hundreds of thousands of battery electric vehicles by 2030 and approximately one million by 2035. More conservative scenarios assume that milestones will be shifted by one to two years due to geopolitics and raw material availability. Progressive variants show significantly higher numbers but face limits on rapid infrastructure deployment and societal implementation.

Baseline, delayed and progressive scenarios show different paces of electrification, with the fastest variants constrained by infrastructure and societal adaptation.

Recommendations for automotive in Central Europe

Aligning the portfolio with the emissions trajectory, focusing on total cost of ownership and appropriate insurance for new infrastructure are among practical steps to strengthen competitiveness.

Conclusion

Those who accelerate will win. Short‑term priorities are product efficiency, development of high‑power charging and smart grid integration. A more significant reduction in emissions intensity will materialise with higher shares of BEV in new registrations and with a cleaner energy mix after 2030.

Disclaimer: This article is based on publicly available data, internal analyses and selected EU documents and draft legislation that are valid or available as of the date of its publication. Some of the initiatives, draft regulations and policy communications described may change during the legislative process or may not be adopted in the form described here. The information contained in this material does not constitute legal, tax or other professional advice and serves general information purposes only; before making any decision, we recommend conducting your own analysis or seeking professional advice in relation to the specific situation.