With uncertainty over its 2035 zero-emission car target and a weak industrial policy, Europe is proving less attractive to electric vehicle manufacturers.
North America has moved far ahead of Europe in attracting investments in electric vehicle, battery production and charging from carmakers, afinds. Weak EU electrification targets in the 2020s and the pull of US subsidies resulted in Europe securing just over a quarter of global EV investment announced between 2021 and 2023. More than a third went to the US, Canada and Mexico, despite the region being a smaller car producer.
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 , Germany and Spain .
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 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.