North America surges ahead of Europe in EV investment race

Green Forum
North America has significantly outplaced Europe in attracting investments in electric vehicle (EV) production battery production and charging infrastructure, according to Transport & Environment, one of Europe's leading advocates for clean transport and energy.

Weak EU electrification targets in the 2020s and the pull of US subsidies resulted in Europe securing just over a quarter (26%) of global EV investment announced between 2021 and 2023. More than a third (37%) went to the US, Canada, and Mexico, despite the region being a smaller car producer.

Transport & Environment (T&E), which published the analysis, called on Europe to respond by ending uncertainty over its 2035 zero-emission target for cars and by adopting a strong industrial policy to build up its EV supply chain. 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 (€26 bn), Germany (€13 bn) and Spain (€10 bn).

Italy, a major manufacturing hub for Stellantis, managed to attract just €1.3 bn. Europe is currently a far less attractive destination for foreign EV manufacturers compared to North America, the report also finds. Almost two-thirds (65%) 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. Even then, Europe's second biggest carmaker, Stellantis, invested 74% of its outlay in North America and committed just 10% to its home region.

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Green Forum  |  20 June, 2024 at 8:04 AM