European carmakers are the ones that invest the most in electric cars. But they invested mainly outside Europe. The United States is the country that has attracted the most investments, despite having a penetration of electric cars lower than the world average which was 15% last year. The total amount of investments announced has reached the record figure of 265 billion euros in the last three years.
These are some of the data contained in a study by Transport & Environment (T&E)the independent European environmental organisation.
The study starts from market data. Since 2019, we read «the global sales of BEVs have grown rapidly since 1.6 million to 9.6 million of cars in 2023, or approximately 15% of the global market. Automakers have invested in electric vehicles and batteries in a race to electrification driven by global regulations, including EU car CO2 standards».
North America is full
Analyzing investment announcements in electric vehicles, batteries and charging Of 19 global automakers between 2021 and 2023 T&E estimates a total of 265 billion euros (150 billion last year alone).
The 34% of ads comes from European car manufacturers, followed by Chinese ones with 20% and South Korean ones with 18%. However the North AmericaEurope’s smallest car manufacturer, is awarded 37% of investments against the 26% of Europe.
The United States attracts more foreign investment thanks to generous subsidies for local production granted byUS Inflation Reduction Act of 2022 supports T&E. Conversely, in Europe 80% comes from European carmakers, while Tesla, Geely, Nissan and Ford invest the remaining 20% in electric cars. This indicates a Europe’s lack of attractiveness as a location for the production of electric vehicles.
The Stellantis case: only 10% of investments are destined for Europe
Among the car manufacturers that have invested in Europe, only 6 (BMW, JLR, Renault, Mercedes, Nissan and VW) have directed more than 50% of their investments towards Europe. There main European car manufacturer, Stellantis, directed only 10% of the announced investments towards Europe, placing instead 74% in North America.
…and Italy remains dry
The UK, Germany and Spain were the biggest beneficiaries, securing 71% of the investments announced for Europe. L’Italy wins less than 5% of the total and ten times less than Germany, 7 less than Spain, exactly half of Hungary.
Italy, an important production hub for Stellantis, managed to attract only 1.3 billion euros. And this investment now appears to be delayed.
The European automotive sector is at risk
«This should sound a wake-up call for Europe _concludes T&E -: his current one lack of an industrial strategy consistency for electric vehicles to compete with China and the United States is also hindering investment by domestic automakers themselves.”.
Other alarm bell for the European automotive sector it is the slowdown in investments in electric vehicles last year.
In relation to sales, European carmakers currently invest less in the electric car supply chain than US car manufacturers. On average, European car manufacturers have invested 3,840 euros per car soldrespect to 4,970 euros of US automakers.
This could jeopardize the maintenance long-term growth in jobs in the European automotive industry as the global car market shifts towards electric vehicles.
Transport & Environment concludes with three suggestions for political decision-makers, in the aftermath of the vote for the European Parliament.
Three moves to ride the change
- Maintain the ambition of EU car CO2 standards, including the target of a ban on thermal emissions by 2035. This is critical to providing automakers with regulatory certainty.
- Also introduce in Europe a package of incentives for the “green” automotive industry of at least 1,000 billion euros.
- Support and reward local production, not through protectionism (tariffs) but with accelerated production plans for electric vehicles. For example through ambitious carbon footprint standards of batteries, as is currently done in France with its “eco-score” concept.
