Europe’s EV industry losing ground to China, US, warns ACEA
14 Dec 2023
Automotive industry body issues new report highlighting need for robust EU industrial strategy...
Brussels – European electric vehicle manufacturers are struggling to counter China’s dominance of the industry supply-chain and US government incentives for domestic automotive makers.
So says a new report from the European Automobile Manufacturers’ Association (ACEA), which found the competitiveness of EV manufacturing in Europe being eroded by the more ambitious industrial strategies of other global regions.
According to the report by École Polytechnique, a strategic and holistic EV policy – encompassing mining, refining, manufacturing, charging networks, cheap energy, purchase incentives and recycling – has significantly bolstered China’s competitive edge.
“In stark contrast,” said the study, “the EU has employed a piecemeal regulatory approach to industrial policy – regulating specific steps of the value chain.”
In the US, meanwhile, ambitious sales targets in states like California and at federal level, combined with massive funding under the Inflation Reduction Act (IRA), are boosting the domestic automotive industry.
These efforts, said the report, are straining European automotive manufacturers’ competitiveness in the US, one of its most valuable export markets for EVs.
“Unlike China and the US, the EU lacks a robust industrial strategy to shore up electric vehicle manufacturing,” stated Sigrid de Vries, ACEA director general.
“Europe wants to set the global pace for decarbonising, but it must do more to bolster critical industries that are part of the solution in a synchronised and coherent manner,” added de Vries.
While the report highlighted progress in battery-cell production in Europe, it found that the development of an upstream battery value-chain is lagging demand, leading to continued dependence on China.
Concluded De Vries: “The EU’s regulatory framework lacks a holistic approach to vehicle electrification. A patchwork of regulations – at a pace of eight or nine per year on average – divert vital funds and undermine competitiveness.
“To tackle climate change and provide impetus to Europe’s burgeoning electric vehicle industry, the EU must develop a tailored regulatory and financial framework to create a supportive business environment.”
