In her 2025 State of the Union address, Commission President Ursula von der Leyen framed the coming years as Europe’s “Independence Moment”. The message was clear: the Union must reduce dependencies, strengthen its industrial base, and ensure affordable clean energy. For the transport, energy and industrial sectors, the speech outlined a packed agenda that will shape policy well beyond the current mandate.
Energy systems were presented as the foundation of independence. A new Grids Package will be tabled to accelerate investment and permitting in electricity networks, accompanied by an Energy Highways initiative targeting eight cross-border bottlenecks, from the Øresund Strait to the Sicilian Canal. The Commission’s line was unambiguous: clean, homegrown energy – renewables backed by nuclear – is the only way to cut costs for households and industry while eliminating Russian fossil fuels.
Industrial competitiveness featured prominently. Von der Leyen announced the Industrial Accelerator Act to accelerate strategic projects, alongside a Battery Booster worth €1.8 billion in equity support to expand European cell manufacturing. Demand will be reinforced through “Made in Europe” criteria in public procurement, designed to create lead markets for clean technologies. The Commission also committed to advancing the Circular Economy Act to reduce raw material dependence and to mobilising private investors via a Scaleup Europe Fund to support growth-stage firms in Europe.
The automotive sector was singled out as both an economic pillar and a political priority. Von der Leyen announced a Small Affordable Cars initiative, aimed at delivering compact, efficient electric vehicles built with European supply chains. The President gave this a symbolic framing: Europe should have its own “E-car” – E for environmental, E for economical, E for European. The initiative responds to two simultaneous pressures: the need for affordable mass-market models to accelerate consumer uptake, and the rapid globalisation of competition, particularly from China.
The Commission’s stance reflects a growing recognition that the success of the transition depends not only on regulatory targets, but also on affordability and consumer access. While premium electric cars are already available, millions of Europeans continue to find entry-level models prohibitively expensive. The initiative aims to prevent electrification from becoming a two-tier system, with cheaper imports dominating the lower end of the market. By tying affordability to European content and supply chains, the Commission is also positioning the initiative as an industrial strategy to safeguard jobs and value creation in Europe.
The forthcoming 2035 zero-emission vehicle review will retain technology neutrality but reconfirm electrification as the baseline. Combined with the new measures, this signals a policy mix that is shifting from target-setting towards direct industrial support and market creation. The political framing is explicit: the future of affordable electric mobility must be built in Europe, with batteries, components and vehicles manufactured across the Union.
Trade policy was tied directly to industrial resilience. The Commission will propose a successor to the steel safeguard regime to protect decarbonising producers critical to carmakers and infrastructure suppliers. New trade agreements with India, Mexico, and Mercosur will be pursued to diversify supply chains. At the same time, the Commission has pledged to uphold Europe’s regulatory autonomy in environmental and digital standards, despite tensions with Washington and Beijing.
Defence and industrial policy were closely linked. Von der Leyen announced €6 billion in frontloaded support from the European Recovery Assistance loan and a new Drone Alliance with Ukraine, aiming to industrialise unmanned capabilities and embed them into Europe’s wider defence and industrial strategy. The SAFE joint procurement programme and Readiness 2030 will further consolidate EU defence demand, with spillovers into dual-use logistics and infrastructure.
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