Press Release

Europe far behind North America in securing EV investments

June 6, 2024

With uncertainty over its 2035 zero-emission car target and a weak industrial policy, Europe is proving less attractive to electric vehicle manufacturers.

37% The share of global EV investment, announced between 2021-2023, secured by the US.

26% The share of global EV investment secured by Europe.

80% Europe was reliant on domestic carmakers for 80% of EV investment.

North America has moved far ahead of Europe in attracting investments in electric vehicle, battery production and charging from carmakers, a new report finds. Weak EU electrification targets in the 2020s and the pull of US subsidies resulted in Europe securing just over a quarter (26%) of global EV investment announced between 2021 and 2023. More than a third (37%) went to the US, Canada and Mexico, despite the region being a smaller car producer. Transport & Environment (T&E), which published the analysis, called on Europe to respond by ending uncertainty over its 2035 zero-emission target for cars and by adopting a strong industrial policy to build up its EV supply chain.

Last year €42 bn in EV investment was committed to Europe, compared to €9 bn in China – whose carmakers invested earlier in EVs and batteries – and €58 bn in North America. The rate of investment growth in Europe declined last year compared to 2022, likely due to carmakers having no EU CO2 standards to meet for four years after 2025. The biggest beneficiaries in Europe between 2021 and 2023 were the UK (€26 bn), Germany (€13 bn) and Spain (€10 bn). Italy, a major manufacturing hub for Stellantis, managed to attract just €1.3 bn.

Anna Krajinska, vehicle emissions and air quality manager at T&E, said: “Regulation has always driven investment in clean cars and now Europe is falling behind because of weak CO2 standards in the 2020s. Ending uncertainty over the EU’s 2035 zero-emission car target is the first step to securing more production and jobs for European countries.”

Europe is currently a far less attractive destination for foreign EV manufacturers compared to North America, the report also finds. Almost two-thirds (65%) of EV investments in North America between 2021-2023 came from foreign producers – largely due to subsidies under the US Inflation Reduction Act. Europe was reliant on domestic carmakers for 80% of funding committed to electrification. Even then, Europe’s second biggest carmaker, Stellantis, invested 74% of its outlay in North America and committed just 10% to its home region.

Anna Krajinska said: “Europe’s share of the investment pie is shrinking while America’s generous subsidies for EV production are working exactly as intended. The EU urgently needs a stronger industrial strategy, particularly an investment package to attract more of the supply chain.”

Read more:

Carmaker’s EV investments: Is Europe falling behind?

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