Ford is set to pump €4.4 billion ($4.76 billion) into its struggling German division as part of its strategy to boost its European business.

Its Ford-Werke arm is in the middle of a rationalization program focused on reducing costs and increasing competitiveness, Ford vice chair John Lawler tells the Financial Times in an interview.

Lawler, who this month was elected to the board of Europe’s auto industry body, the European Automobile Manufacturers’ Assn. (ACEA), says the new funding includes a capital injection to address overborrowing at Ford-Werke and provide funding for a multiyear business plan.

He also calls on European lawmakers to establish a clear agenda to promote battery-electric vehicles and bring tailpipe emissions targets more in line with consumer demand.

His comments reflect the huge challenges facing Europe’s auto industry in the form of stiff competition from unfairly state-subsidized Chinese BEV makers who are shrugging off modest European Union tariffs.

Europe has responded by giving three years for its automakers to reach BEV sales targets but there is no guarantee that consumers will switch to the technology adequately within that time frame.

At the same time, threatened tariffs on European products entering the U.S. market add to the industry’s uncertainty for future trade.

Against this backdrop, Ford is cutting thousands of jobs in Europe, many of them in Germany although it currently has 32,000 employees in Europe, with manufacturing operations in Germany, Spain, Romania, Turkey and the U.K.

Lawler says: “By recapitalizing our German operations, we are supporting the transformation of our business in Europe and strengthening our ability to compete with a fresh product portfolio. To build a sustainable business in Europe, we also need to continue to simplify our governance, reduce costs and drive efficiencies.”

On joining the ACEA board, Lawler supports the EU’s trading body, the European Commission, in its plan to help the auto industry in a challenging environment. He adds: “I am encouraged by the leadership of President (Ursula) von der Leyen and the urgency of the European Commission to address the critical questions of compliance flexibility, industrial cost competitiveness and stronger enabling conditions. Collaboration between all stakeholders is essential to making the transition work.”