<p>The transport sector is at the centre of the decarbonisation process. The green and digital transitions are causing a radical change in the automotive sector and in the car itself. European automotive industry has been caught unprepared and now risks losing ground to Chinese and Big Tech competition. The threat is so serious that the European Commission is reviewing its "neoliberal" philosophy and taking various measures to defend the European automotive industry. Europe's new industrial policy must balance competing priorities—decarbonisation, competitiveness and security—while addressing conflicting interests between member states. Short-term costs and long-term benefits may be very unequally distributed across and within countries. This paper considers the delicate balance needed to reduce the economic and social costs caused by industrial restructuring, which risks slowing down decarbonisation. It advocates the need to coordinate all policy instruments, at various levels of governance, to promote a different model of sustainable mobility and to define the direction and path of change. Shaping markets and coordinating investment decisions at a European level, while ensuring social cohesion, could transform the green transition from a challenge to an opportunity.</p>