Brussels, Belgium – Europe's ambitious electric vehicle (EV) transition faces significant headwinds, threatening the competitiveness of its automotive industry, according to a new report published by the Centre for European Policy Studies (CEPS) with support from the European Automobile Manufacturers’ Association (ACEA). The comprehensive analysis, drawing on insights from expert researchers and industry stakeholders, underscores that while the shift to electrification is imperative, the road ahead is fraught with complex barriers that demand urgent, coordinated action across the continent.

The report identifies several critical impediments to a smooth and competitive EV rollout. Foremost among these is the lagging development of charging infrastructure, which remains insufficient to support the projected growth in EV adoption. While EV sales continue to rise, the density and reliability of public charging points, particularly in rural areas and across borders, are not keeping pace, creating range anxiety and deterring potential buyers. Furthermore, the analysis highlights concerns over access to critical raw materials, such as lithium, cobalt, and nickel, which are essential for battery production. Europe's reliance on external supply chains for these materials exposes its manufacturers to geopolitical risks and price volatility, impacting production costs and timelines.

Beyond infrastructure and raw materials, the report points to high energy costs and the overall affordability of electric vehicles for consumers as significant hurdles. While total cost of ownership can be competitive over time, the initial purchase price of EVs often remains higher than their internal combustion engine counterparts, requiring sustained incentives and innovative financing models. Manufacturing competitiveness is also a key focus, with the report stressing the need for substantial investment in European gigafactories and advanced production capabilities to rival global players, particularly from Asia and North America, which benefit from significant state support and established supply chains.

To overcome these challenges, the CEPS-ACEA report proposes a multi-faceted approach. It calls for accelerated deployment of a robust, smart charging network, supported by clear regulatory frameworks and public-private partnerships. Strengthening Europe's raw material supply chain through diversified sourcing, domestic extraction where feasible, and enhanced recycling initiatives is deemed crucial. The report also advocates for consistent, long-term policy support, including targeted subsidies for R&D, manufacturing, and consumer incentives, alongside a stable regulatory environment that fosters investment and innovation. Luca de Meo, ACEA President, recently emphasized the urgency, stating, "Europe must create the right conditions for the industry to thrive, or risk losing its competitive edge in the global EV race." This sentiment is echoed throughout the report, which stresses the need for a holistic industrial strategy that integrates energy, trade, and environmental policies.

The findings carry significant market implications for Europe's automotive sector, which directly employs millions and contributes substantially to the region's GDP. Failure to address these systemic issues could lead to a decline in European manufacturing output, job losses, and increased reliance on imported EVs. Conversely, a successful strategy could solidify Europe's position as a leader in sustainable mobility, driving economic growth and achieving ambitious climate targets.