The global market for electric vehicles (EVs) is booming. It was valued at US$384 billion in 2022, and is expected to grow to US$8.8 trillion by 2030, possibly reaching as much as US$56.7 trillion in value by 2050. By 2040, 60 % of all vehicles worldwide are expected to be electric, compared to 2 % in 2020.
Despite this growth, and Europe’s leadership in producing cars running on internal combustion engines, most European companies are behind in EV innovation. Europe is a late starter in this field and lags behind the US and China. At the same time, the EU is China’s largest export market, with 40 % of Chinese EV exports destined for Europe; in 2022, 28 % of the EU’s EVs were imported from China. Over the past 5 years, exports of European cars to China fell slightly while European imports of Chinese cars quadrupled, reversing the trade relationship in vehicles.
Western companies operating from China were the source of most EV imports from China (see Figure 1). Together with Chinese companies that are looking to Europe to sell EVs, this double pressure risks disrupting the European automotive supply chain. The European automobile sector generated approximately 7 % of the EU’s GDP and over 13.8 million direct and indirect jobs in 2022, and is thus a strategic sector. Any threat against the sector would affect the EU’s growth, productivity and security and should therefore be taken seriously.
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