In recent years, Europe’s ability to attract eMobility investments has diminished compared to other regions, such as North America and China.
According to an analysis by Transport & Environment (T&E), between 2021 and 2023, the continent attracted only 26 per cent of global electric vehicle (EV) funding.
This figure falls short compared to the 37 per cent allocated to North America and 9 per cent to China.
How can the European Union (EU) regain its leadership?
Adopting an industrial policy that incentivises the production and development of EVs is essential.
This includes, among other measures, establishing an investment package that attracts the global supply chain, as well as creating a regulatory framework that provides clarity and long-term stability.
Furthermore, Europe needs to maintain a competitive stance globally, not only in terms of production but also in providing affordable and sustainable energy.
As Luca de Meo, President of the European Automobile Manufacturers’ Association (ACEA) and CEO of Groupe Renault, states:
“The fact that an average of eight new regulations are approved each year until 2030 should indicate that there is a flaw somewhere in the system.”
Another key measure is the need to reduce the EU’s energy dependence on fossil fuels.
Over the past five years, rising energy prices have hampered European economic growth, leaving it 1 per cent behind the US on average.
According to long-term projections by Schneider Electric, EU growth is expected to be approximately 0.8 per cent lower than that of the US by 2028.
It is worth noting that with the Green Deal, Europe has laid the groundwork to tackle these challenges, but much remains to be done.
Simplifying the sustainability policy framework, accelerating the energy transition, and prioritising digital transformation are key steps in this regard.
In this regard, Jovan Petrovic, Backoffice Sales at SIPRO STAHL SCHWEIZ, states to Mobility Portal:
“Europe could either follow the current pace or seek alternative mobility solutions which could work better in the continent and be more efficient and sustainable than traditional ones”.
What are the reasons behind this decline in eMobility investments?
This reduction has been attributed to a range of factors, including the weakness of the EU’s electrification policies and the allure of the generous subsidies provided by the United States (US) under the Inflation Reduction Act.
Moreover, North America has solidified its position with a clear industrial strategy that promotes local production.
Regarding the US, Michel Bayings, Senior Management Consultant at Emobility Consulting France/Netherlands, observes:
“At the political level, it is highly likely that if Donald Trump were elected, investments and support for the energy transition would decrease.”
He maintains that, for this reason, they are currently investing as much as possible before the elections, “but this uncertainty is not helpful.”
Meanwhile, China has played a long-term role in developing its domestic EV market.
For years, the Asian giant has invested in the battery supply chain and charging infrastructure, enabling it not only to supply its local market but also to export its technology globally.
Europe, in contrast, has largely relied on its national manufacturers for electrification funding, with 80 per cent of the investment coming from them.
The situation is further exacerbated by the recent EU anti-subsidy investigation against Chinese EV manufacturers.
Although designed to protect the European industry, this measure has generated significant distrust among Asian investors.
According to a survey by the China Chamber of Commerce to the EU and the China Economic Information Service, 82 per cent of Chinese companies in the sector have reported a decline in confidence in investing in Europe.
This investigation has delayed collaboration with European partners and damaged the reputation of Asian brands on the continent, complicating the attraction of talent and the expansion of these companies in Europe.
Despite this context, some European nations have continued their negotiations.
Spain, for example, has partnered with Chery, a Chinese automotive giant, to manufacture electric vehicles at a plant formerly owned by Nissan in Barcelona.
Similarly, in Germany, Stellantis has teamed up with Leapmotor to sell EVs in several EU countries.
Thus, nations are seeking to attract investments that will strengthen their own production and technological capabilities.
The underlying problem, according to T&E, lies in the lack of a coherent industrial strategy from the EU.
The absence of intermediate CO2 reduction targets until 2035 has created uncertainty, hampering investment in new technologies and the infrastructure needed to support the growth of electric mobility.
“Regulation has always driven investment in clean vehicles, and now Europe is falling behind due to the weakness of CO2 standards in the 2020s,” the organisation states.
This situation is intensified by the recent European elections, where rumours emerged about the potential removal of the ban on combustion vehicles by 2035.
In this context, Michel Bayings states: “Investments are directly related to long-term stable political situations with clear objectives.”
He adds: “This is what I believe is currently lacking in many countries and in the EU, where after the elections it is still unclear where they are heading and what the governments are willing to invest in. It is a matter of decisions.”
The positive aspect is that an increasing number of individuals and companies are confident in electric driving, as well as in batteries and charging infrastructure, according to the latest surveys from the European Alternative Fuels Observatory (EAFO).
“This should give investors hope for the future,” he concludes.
