European car brands have been warned that they are in "mortal danger" as US President Donald Trump imposes strong tariffs on countries to protect American interests.
Since returning to office in January, President Donald Trump has been insistent on introducing tariffs and other trade measures on competing nations, including Canada, China and Mexico.
Trump has also warned that the United States could impose tariffs on the UK and European Union of around 25 per cent, despite a warning from Ford boss Jim Farley that it would "blow a hole in the US industry that we have never seen".
Brands are now scrambling to see whether they will be hammered by Trump's tariffs, which could impact the 13 million employees working in the automotive sector across the continent.
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Top industry experts have warned that the automotive industry could face serious issues if tariffs are confirmed
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Stephane Sejourne, Executive Vice-President for Prosperity and Industrial Strategy at the European Commission, said: "This is a pivotal moment for this industry.
"The European Commission is letting go of its naivety, protecting the sector, giving it the opportunity to become more competitive," he told AFP.
However, he insisted that Europe had "not lost" the fight against Chinese electric vehicle manufacturers as traditional brands lag behind with more expensive market prices.
The Telegraph reported that Brussels is considering what "obligations" could be introduced to boost the production and purchase of more electric vehicles.
Potential measures could include a scheme similar to the UK's Zero Emission Vehicle mandate, which requires companies to have at least 28 per cent of sales come from electric vehicles by the end of the year.
While it has been met with mixed opinions, the ZEV mandate has stimulated growth for electric cars, helping the UK to become Europe's biggest electric vehicle market.
The latest data from the Society of Motor Manufacturers and Traders (SMMT) shows that one in four new vehicle registrations in February was a battery electric vehicle.
The tariffs have been met with criticism from world leaders, including Justin Trudeau, who called them "very dumb", and accused Trump of trying to "ruin the Canadian economy".
Similarly, the boss of Adidas said tariffs would force prices up for goods, especially if it is a 25 per cent tariff, as has been threatened by the billionaire President.
A handful of companies have already warned that they could be forced to change their production habits in response to the tariffs and counter-tariffs.
Volvo said it aims to begin exports of its European-made EX30 SUV model to the United States, but may move some production to the US because of the rules.
Sister company Polestar was also forced to move the production of its Polestar 3 model to the United States to avoid massive tariffs.
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Polestar said it was moving production of some vehicles to the US to avoid tariffs on Chinese imports
POLESTARThe Swedish brand, which is majority-owned by Chinese giant Geely, had been manufacturing vehicles in China, but moved production to Volvo's plant in South Carolina last year.
Reuters reported that the brand aims to build its Polestar 4 SUV coupes at a South Korean plant owned by Renault Korea, and part-owned by Geely.
