Electric future powers industry growth
EU car production to rise to 16m annually if EV incentives remain
Maintaining zero-emission targets could boost car and battery production, but delays or policy rollbacks risk economic and employment losses.
A study commissioned by Transport and Environment (T&E) has found vehicle production in the EU could reach 16.8 million vehicles per year if EV and clean energy targets are maintained.
T&E, a not-for-profit advocacy group headquartered in Belgium, reported that this output would match the region’s post-financial crisis peak in 2009.
For the forecast, T&E modelled the continuation of the 2035 zero-emissions goal along with the introduction of new policies. These policies would encourage domestic EV production, including increased electrification targets for commercial fleets and support for localised battery manufacturing initiatives.
The economic output of the charging sector could increase to €79 billion ($92.3bn) by 2035, the report said, and battery production could rise to 900GWh from its current 187GWh. Already, OEMs have taken steps to improve battery manufacturing capabilities in Europe. For example, CATL has raised $4bn to fund a new plant in Hungary while European automakers such as Volkswagen Group and Mercedes-Benz have begun localising production through partnerships.
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However, failure to implement effective industrial policies could result in the European automotive value chain’s contribution to the economy falling by up to €90bn ($105bn) by 2035. One million jobs would be lost in the field and two-thirds of the planned battery investments in Europe would fail, the model also suggested.
It pointed to increased pressures on lawmakers as being one of the reasons why electrification and emission targets have relaxed. In the UK, for example, the government revised its zero-emissions vehicle (ZEV) mandate earlier this year following industry requests, extending the timeline for ICE vehicles to be phased out. Similarly, the European Commission proposed an amendment to its CO2 Standards Regulation that would see emission targets averaged over a three year period.
Julia Poliscanova, senior director for vehicles and e-mobility supply chains at T&E, described the situation as a “make-or-break moment” for the auto industry in the EU.
She added: “Europe’s success hinges on the road that EU politicians take today. Keeping the 2035 zero-emissions goal alongside adopting strong industrial and demand policies is the EU’s best chance to return to greater car production, maintain job levels and increase the economic value of its auto industry.”
Additional benefits found by the study include an offset of any workforce reduction caused by the move away from internal combustion engine (ICE) vehicles, through opportunities in the battery and charging industries. According to T&E’s model, there were 100,000 new roles in the ICE market, and 120,000 in EVs.
