EU playing catch-up: China leading for EV investments

Mobility is at a crossroads, and Europe is falling behind in each of the three key revolutions, automation, sharing, and car electrification. In the last year alone, China has secured seven times more investments in electric vehicle manufacturing than the EU. According to public announcements, China has received over EUR 21.7 billion in investment to manufacture electric vehicles, while the EU has received only EUR 3.2 billion, a sevenfold decrease. The Volkswagen Group, Daimler AG, and Nissan have provided the majority of the investment in China, which has been driven by the aggressive electric vehicle policy. This policy requires automakers to obtain credits for the production of EVs equal to 10% of the total passenger vehicle market in 2019 and 12% in 2020.

Reported by Transport & Environment

If electric vehicles are imported rather than manufactured in Europe, a quarter of the automotive manufacturing jobs could be lost by 2030. However, a new study shows that a shift to low and zero emission vehicles built in the EU could create 200,000 jobs across the EU economy; this is supported by a variety of other published work, including the European Commission’s impact assessment on the new car CO2 regulation. The market for batteries alone is valued at 250 million euros.

If Europe is to reap the economic, employment, and climate benefits of e-mobility, it must adopt a progressive policy that actively encourages investment in plug-in vehicle manufacturing in Europe, as China and California have done through mandates. The most efficient way to accomplish this is to create a sizable market for plug-in vehicles in Europe. This is more likely to be met through local vehicle production than a niche market that can be met more cheaply by importing vehicles.

On June 25, EU environment ministers will meet in Luxembourg to discuss the new EU CO2 rules for cars and vans, the key regulation that will determine the pace of Europe’s e-mobility transition after 2020. A progressive 2025 CO2 reduction target, combined with a sales target for low and zero emission vehicles, will help drive the European market, which is currently stagnant due to a lack of supply. Member states can also help to boost local vehicle manufacturing in Europe by investing in charging infrastructure and reforming vehicle taxes. Strong policies can help Europe maintain its global automotive leadership. With weak targets, China is likely to usurp the EU’s position and key sector.

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Reported by Transport & Environment

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