Europe’s producers now anticipate making 500,000 fewer electric vehicles than expected two years ago.
In the face of ongoing economic and industrial uncertainty, the automotive supply industry braces for a year of moderate growth although the electric vehicle segment continues to take a larger share however, according to CLEP
Nevertheless, overall production volumes remain significantly below pre-COVID levels, marking a departure from forecasts made just two years ago.
The establishment of a full EU battery supply chain will be crucial for turning this trajectory around. The key challenges hinge on driving down battery costs, with sodium emerging as a potential gamechanger that could reactivate the now lacking budget vehicle segment in the EU. However, a combination of low investment in the midstream battery supply chain coupled with insufficient access to raw materials poses a serious hurdle for the sector’s growth.
While projections suggest that battery electric vehicles could represent more than 50% of vehicles produced by the end of this decade, combustion engine vehicles will still represent two-thirds of the fleet by the close of the next decade. This underscores the critical importance of further developments in combustion technology and substantial investments needed in renewable fuels to meet the required CO2 emission reductions in the transport sector.
Nils Poel, CLEPA’s head of market affairs said, “While roughly 35% increase in the number of EVs produced is a positive forecast for 2024, it’s crucial to note that we find ourselves 500,000 vehicles short of projections from just two years ago. EV technology is evolving rapidly but is currently not matched by sufficient investment in an EU battery supply chain and the needed enabling conditions.”
