The 27-member bloc wants to achieve net zero emissions by 2050, meaning it will emit no more than it can balance out with measures to remove carbon dioxide from the atmosphere such as reforestation programmes.
It hopes to meet its targets with the widespread use of electric vehicles as road transport accounts for nearly a quarter of its emissions.
The EU wants to have at least 30 million zero-emission cars on European roads by 2030, or about 12% of the current car fleet. However, the European Court of Auditors (ECA) cautioned the bloc may create new economic dependencies and hurt its own industry.
As it stands, high EV production costs in Europe means the bloc will have to rely on cheap imports, mainly from China, if it sticks to the 2035 goal. China accounts for 76% of EV battery output compared with the EU that represents less than 10% of production globally.
"The EU faces a conundrum, how to meet goals without harming industrial policy and hurting consumers," Annemie Turtelboom, an ECA member, told reporters. She added that 2026 will be a key year for a policy review.
Tesla is the leading EV maker in the United States and Europe but has come under pressure to slash prices due to competition from Chinese cars. Similarly, European carmakers like Stellantis that owns Peugeot and Fiat, and Renault are now racing to develop their own affordable EV models.
While EV purchases have been on the rise in the EU, the increase was largely due to subsidies. Further, charging infrastructure is lacking with 70% of charging points concentrated in just Germany, France and the Netherlands. The EU is falling short of its aim to set up 1 million charging stations across the bloc.
"(EV) prices would need to halve and subsidies do not seem to be a viable tool ... Batteries alone already costs 15,000 euros when produced in Europe," Turtleboom added when speaking to reporters.
Alternative fuels like biofuels, e-fuels or hydrogen remain uneconomic at commercial scale.
Adding to the difficulties in hitting its 2050 goal, the ECA said the EU has not cut real CO2 emissions from cars despite new testing standards and measures such as Euro 6.
In a January report, the ECA attributes this to the gap between laboratory tests and real world emission tests. The Commission was relying on lab tests, which created a skewed version. In reality, average emissions from diesel cars are the unchanged from 2010 at 170 grams of CO2 per kilometre while petrol cars are just down 4.6% at over 160 g CO2/km.
"Despite lofty ambitions and strict requirements, most conventional cars still emit as much CO2 as 12 years ago." Nikolaos Milionis, ECA member, said in a statement, attributing part of the failure to a rise in the average weight of cars.
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