The Green Transition: A Promise Unfulfilled—Why Europe’s Climate Goals Are Stalling and What Needs to Change

Reducing our carbon footprint isn’t just good for the environment—it’s good for our health, our economies, and our geopolitical stability. Cleaner air means healthier children and adults. Breaking free from fossil fuels means less dependence on oil-rich nations that wield disproportionate power. The benefits are clear, and the urgency is undeniable.

To accelerate this transition, the European Union set ambitious climate goals, giving itself a head start with deadlines in 2030 and 2035. But despite these efforts, the green transition is stalling. Why? Because the cooperation between governments and corporations hasn’t lived up to expectations. While Brussels set the stage, the automakers and energy companies that were supposed to drive the change have fallen short. Emissions scandals, missed opportunities, and a lack of affordable EVs have left Europe scrambling to meet its own deadlines.

The EU’s Ambitious Goals and Where It Went Wrong

The European Union set bold climate targets to lead the global green transition: a 55% reduction in greenhouse gas emissions by 2030 and 100% zero-emission new cars by 2035. These goals were ambitious but achievable, especially with the head start Europe had in policy-making and technological innovation. The plan was clear: governments would create the framework, and corporations would deliver the innovation and scale needed to make it happen. Yet, despite these efforts, the green transition has stalled. Why? Because the cooperation between governments and corporations hasn’t lived up to expectations.

Automakers, in particular, have fallen short. While they received billions in government incentives, much of this support was squandered. Instead of investing in affordable EVs and scalable green technologies, many companies prioritized short-term profits, stock buybacks, and dividends. The emissions scandals, like Volkswagen’s Dieselgate, further eroded public trust and delayed progress. Meanwhile, the lack of affordable EVs for the average consumer has made widespread adoption impossible. The result? Europe is now scrambling to meet its own deadlines, with the 2030 target just five years away and the 2035 mandate looming on the horizon.

Policy Contradictions and the Path Forward

The Tariff Trap

The EU’s green transition faces a new threat—not from external competition, but from its own contradictory policies. The recent case of SEAT, Spain’s largest automaker, illustrates how misaligned policies are creating impossible situations for manufacturers and workers alike.

According to a Reuters article SEAT, the Spanish subsidiary of Volkswagen, recently announced that it may have to cut 1,500 jobs and reduce production of its flagship electric vehicle (EV), the CUPRA Tavascan, due to the European Union’s tariffs on Chinese-made EVs.

Here’s why this happened: The EU imposed a 20.7% tariff on Chinese-made EVs in October 2023, on top of an existing 10% duty. The CUPRA Tavascan, SEAT’s key EV, is produced in China to keep costs low. However, the tariffs have made the car unprofitable, forcing SEAT to reconsider its production plans.

Compounding the issue is the EU’s strict fleet-wide emissions targets. Automakers are required to balance their average emissions by selling enough zero-emission EVs to offset higher-emission internal combustion engine (ICE) vehicles. Without the Tavascan, SEAT loses a critical zero-emission vehicle from its lineup, making it harder to meet these targets. This puts the company in a difficult position: if it can’t sell the Tavascan profitably, it must either cut production of traditional ICE vehicles—threatening jobs in combustion engine manufacturing—or face hefty EU fines for missing emissions targets, which could cost hundreds of millions of euros.

But SEAT isn’t alone in feeling the impact. Tesla and BMW, along with Chinese automakers like BYD and SAIC, have filed lawsuits against the EU, arguing that the tariffs harm their business operations and slow down the transition to cleaner transportation. Tesla, which manufactures Model 3 vehicles in Shanghai for export to Europe, faces a 7.8% tariff, while BMW has criticized the measures for limiting the supply of affordable EVs to European customers. Chinese manufacturers, facing tariffs as high as 35.3%, argue that the EU’s actions are protectionist and unfairly target their ability to compete.

These lawsuits highlight the growing tensions between global automakers and the EU’s policies. While the tariffs aim to shield European manufacturers from Chinese competition, they risk harming the very companies they are meant to protect and slowing down the adoption of EVs in Europe.

Innovation Barriers

Perhaps most concerning is how these policies slow technological progress. By artificially raising prices on innovative EVs, tariffs don’t just hurt consumers—they reduce competition and weaken the pressure on European manufacturers to innovate. This creates a dangerous comfort zone where protection becomes a substitute for progress.

Resistance to Change: A Historical Perspective

Resistance to change is a recurring theme in the history of innovation. Whether it’s the automotive industry, technology, or energy, every major transition has faced pushback from those who stand to lose from the disruption. The current resistance to the EV transition is no different—but history offers valuable lessons on why embracing change, rather than fighting it, is the only way forward.

The Japanese Automotive Revolution

In the 1970s, Japanese automakers like Toyota and Honda entered global markets with a wave of innovation that transformed the industry. They introduced lean manufacturing, higher quality standards, and fuel-efficient vehicles that appealed to consumers during the oil crisis. At first, Western automakers resisted, calling for protectionist measures to shield their markets. But those who adapted—like Ford and General Motors—emerged stronger, adopting Japanese techniques to improve their own operations. The result? A more competitive, efficient, and innovative global automotive industry.

Resistance to change only delays progress. By embracing Japanese innovation, Western automakers didn’t just survive—they thrived.

The Internet and Personal Computers

The rise of the internet and personal computers faced similar resistance. In the 1990s, many businesses and individuals were skeptical of the internet, fearing it would disrupt traditional industries and jobs. Similarly, personal computers were initially seen as expensive and unnecessary luxuries. But as prices fell and technology improved, these innovations became indispensable, creating new industries and opportunities that far outweighed the losses.

Renewable Energy

The renewable energy sector also faced early skepticism. Solar and wind power were once dismissed as expensive and impractical. But as technology advanced and costs dropped, renewables became a mainstream energy source, challenging the dominance of fossil fuels. Today, countries that embraced renewables early, like Germany and Denmark, are reaping the benefits of cleaner energy and economic growth. Plus, solar energy is less expensive than fossil fuel energy.

The Resistance to EVs: A Familiar Pattern

The resistance to the EV transition follows the same pattern. Automakers, workers, and even consumers are pushing back, fearing the disruption it will bring. But as history shows, this resistance is both natural and counterproductive. European automakers have built their businesses around internal combustion engines (ICE), and many are reluctant to abandon this profitable model. They’ve invested heavily in ICE production and supply chains, creating a cultural and financial inertia that resists change. Millions of jobs in traditional automotive manufacturing, repair, and supply chains are at risk. Workers fear being left behind, creating political and social resistance to the transition.

Many consumers are also hesitant to switch to EVs due to concerns about cost, range, and charging infrastructure. This hesitation slows adoption and reinforces the status quo.

History shows that resistance to change only delays the inevitable. The internet, personal computers, and renewable energy all faced similar pushbacks, but those who embraced the change emerged stronger. The same will be true for EVs.

The Cost of Resistance

• Missed Opportunities: Companies that resist the EV transition risk falling behind in the global race to electrification.
• Economic Fallout: Delaying the transition could cost Europe its leadership in automotive manufacturing and green technology.
• Public Health Risks: Slower adoption means more years of polluted air and the associated health problems.

The Benefits of Embracing Change

• Innovation Leadership: Companies that embrace EVs and green technologies will dominate the industries of the future.
• Economic Growth: The green transition creates jobs in renewable energy, EV manufacturing, and sustainable infrastructure.
• Healthier Communities: Cleaner air means fewer respiratory illnesses and a better quality of life for everyone.

The key to overcoming resistance is to learn from past disruptors. Just as Japanese automakers revolutionized the industry in the 1970s, Chinese EV manufacturers are driving the next wave of innovation. By embracing this change, rather than resisting it, Europe can accelerate its green transition and secure its place in the future economy.

Breaking Down Barriers

The path forward requires removing artificial barriers to innovation. This means:

• Eliminating counterproductive tariffs that make EVs less affordable.
• Fostering technology exchange between European and Asian manufacturers.
• Creating frameworks for collaborative development.
• Supporting workers through the transition with training and opportunities.

Strategic Partnerships

Rather than trying to recreate capabilities that already exist, European manufacturers should focus on strategic partnerships that combine:

• European engineering excellence.
• Asian battery technology and manufacturing efficiency.
• Joint research and development programs.
• Shared investment in charging infrastructure.

Resistance to change is natural, but it’s also futile. History shows that every major technological shift—from Japanese automakers in the 1970s to the rise of the internet and renewable energy—has faced similar pushback. Yet, those who embraced the change emerged stronger, while those who resisted were left behind.

The EV transition is no different. By learning from past disruptors and embracing collaboration over isolation, Europe can accelerate its green transition, protect jobs, and secure its place in the future economy. The choice is clear: resist change and risk irrelevance, or embrace it and lead the way to a cleaner, more sustainable future.