The European auto industry is at a pivotal juncture as it faces a 2035 deadline, mandated by EU member states and the European Parliament, to cease the sales of internal combustion engine cars in favor of electric vehicles (EVs). This transition is deemed essential to address the automotive sector’s significant contribution to the EU’s overall greenhouse gas emissions and to maintain the competitiveness of the European car industry in the global shift towards electrification. With the auto sector embodying a vital component of the EU’s economy, the move towards electric vehicles involves substantial investments in new production capabilities and the development of a localized battery supply chain.
- By 2035, sales of internal combustion engine cars will be banned in the EU.
- The automotive sector represents 13.8 million jobs, 8% of the EU’s GDP, and 32% of its R&D spending.
- Cars account for 13.3% of the EU’s overall greenhouse gas emissions.
- Significant investments are already being made by European car manufacturers and battery producers in anticipation of the 2035 deadline.
- The transition to electric vehicles is seen as Europe’s best industrial policy for the future.
- Manufacturers are adapting production lines to focus on EVs and the associated battery technology.
- Europe aims to be self-sufficient in battery cell technology by 2026 with the right policies.
- Morocco has emerged as Africa’s largest car manufacturing hub, benefiting from government incentives and lower labor costs.
- The EU is investigating whether China’s subsidies to its EV sector constitute unfair competition, which might lead to tariffs.
- The transition offers opportunities for countries like Morocco but raises concerns about a race to the bottom in wages and environmental standards.
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