Research: Europe is Losing Market Share in E-Mobility

While the global automotive market recorded modest growth of 1.7 percent in 2024, moderate growth of 2 percent is expected in 2025, primarily driven by the Chinese (+4 percent) and American (+2.5 percent) markets. Europe, however, continues to lag with a growth rate of only 1.5 percent, attributed to high production costs, a lack of innovation, and rising trade disputes. This was revealed by a new study from Acredia, a credit risk insurer, in collaboration with Allianz Trade.

– The automotive industry is the backbone of the European economy. However, without sufficient investment in innovation and e-mobility, we risk a permanent loss of competitive advantage. An urgent strategic turnaround is needed – warns Michael Kolb, a member of the management board of Acredia.

Targeted Support Instead of Penalties

China dominates the electric vehicle market, with a growth of 40 percent in 2024, while Europe is the only major market where a decline in electric vehicle sales has been recorded. At the same time, sales of hybrid vehicles increased by 20 percent, with Asian manufacturers reaping the largest benefits.

– China is investing billions, the USA is protecting its own market, while Europe continues to impose punitive measures instead of providing targeted support. This approach is not sustainable – emphasizes Kolb.

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Michael Kolb

photo Martina Draper

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A 10-point plan for the European automotive industry aims to regain lost competitiveness. Key measures include targeted investments in battery production and charging infrastructure, optimized vehicle offerings, and strengthening international cooperation. Successful models from China ($231 billion in subsidies), Norway (national charging infrastructure), and Tesla (technological leadership with a streamlined product range) represent guidelines for the future. Europe must now develop a strategy that emphasizes innovation, strengthens production, and expands market opportunities, the study states.

New Markets and Strategic Investments

The study therefore highlights that European car manufacturers need to reduce their model range to five or six competitive hybrid and electric vehicles and increase investments in battery production and electric vehicle charging infrastructure to reduce dependence on China. At least 10 percent of revenue should be directed towards research and development, while new markets such as India, Vietnam, and South America offer significant growth potential.

At the same time, appropriate political measures need to be introduced. Tariffs of 40 to 50 percent on the import of vehicles with less than 75 percent European production share could generate €2 billion annually. An investment package of €150 to €200 billion for charging infrastructure and a 15 percent subsidy on the purchase of electric vehicles under €45,000 with European added value should accelerate e-mobility. Additionally, 5 percent of the EU Horizon program budget should be allocated for battery research, autonomous driving, and recycling to ensure Europe’s long-term innovation leadership.

The European automotive industry is at a historical crossroads. Without targeted reforms, market share will continue to decline, while China and the USA strengthen their dominance.

– Europe must take control. With the right balance of innovation, strategic investments, and support for industrial policy, the European automotive sector can not only survive but also thrive – concludes Kolb.