Trade association says Europe’s EV transition at risk as China heavily outspends EU suppliers on investment.
CLEPA, Europe’s automotive supplier trade association, says that Europe’s ambition to lead the global electric vehicle (EV) transition is facing a ‘structural investment drought’ and that the gap with Chinese competitors is widening.
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CLEPA cites new data that it says reveals that between 2021 and 2026, investment by EU automotive suppliers remained entirely stagnant. In stark contrast, Chinese investment in the sector surged by 57%, creating an ‘asymmetrical global playing field that threatens Europe’s industrial backbone’.
While European suppliers have consistently committed capital to the transition, they are hitting an economic wall, CLEPA maintains. It says unprecedented structural production costs, fragmented supply chains, and regulatory headwinds in Europe are ‘choking the ability to scale innovation competitively’. This is also due to a regulatory and economic environment that currently ‘penalises local scaling while global competitors accelerate with massive state backing’.
According to Oxford Economics data, EU automotive suppliers kept annual spending on factories, machinery, and technology largely flat at around US$42 – 43 billion, between 2021 and 2026. However, China moved in the opposite direction, increasing investment by 57% over the same period to reach roughly US$115 billion by 2026.
Revenues grew in both regions, but China has widened the gap. Chinese revenues rose by 35%, compared with 23% in the EU, pushing China’s automotive supplier market beyond US$1 trillion; 2.5 times larger than the EU market.
The gap becomes even clearer when comparing investment to sales. In the EU, investment as a share of revenues fell from around 12% in 2021 to close to 10% in 2026. In China, it rose from around 9% to roughly 11%, overtaking EU levels by 2026.
Benjamin Krieger, CLEPA’s Secretary General, said: “Strengthening competitiveness is not separate from the green transition – it is a prerequisite for it. Flexible and technology-neutral policies will be essential to support investment, maintain manufacturing in Europe, and give innovative industries the chance to grow.”
