Automotive manufacturers face a multitude of challenges as conventional combustion engine cars are gradually overtaken by electric vehicles (EVs).
Challenges include the management of changing supply chains across borders, new legislation, and disruption from geopolitical events. Businesses that succeed will be those that can adapt in the rapidly changing landscape.
Understanding changes in the automotive markets in the US and Europe
GlobalData recorded 14.7 million sales of EVs worldwide in 2025, projecting this to rise to 17.4 million in 2026.
In the US, California accounts for approximately 35% of all registered electric vehicles, according to US Government figures from September 2024, with 1.256 million. The next highest state was Florida with 254,878 registered EVs, followed by Texas with 230,125. A key enabler of EV growth in California is the Zero Emission Vehicle (ZEV) legislation, which mandates automotive manufacturers to sell an increasing percentage of zero emission vehicles every year up to 2035, with the goal to reach 100% of new vehicle sales within the next decade.
However, any chances of other states closing the gap anytime soon are looking less likely due to recent US Government policy shifts, which are already a factor in the decline in light vehicle sales nationally.
Removal of tax credits for EVs was cited by GlobalData in November 2025 as a contributing factor behind US sales of light vehicles declining by 5.8% year-on-year. In the US, GlobalData recorded 1.289 million light vehicle sales in November 2025, down from 1.368 million for the same month in 2024.
The recalibration of US Government priorities could see an increase in the nearshoring of manufacturing, potentially strengthening the domestic supply chain. This could help to offset the effects of potentially more expensive imports due to increased tariffs on vital materials such as aluminium.
There was slightly better news on the growth front in Europe. While growth in Western Europe was not significant, it was still evident at 0.4%. November 2025 light vehicle sales were at 1.090 million, up from 1.086 million 12 months previously. The picture was stronger in Eastern Europe with 2.5% year-on-year growth from November 2024 to 2025. In November 2024, GlobalData recorded 418,317 light vehicle sales, rising to 428,842 the following year.
How Asian companies influence global automotive manufacturing
Asian countries are essential for the global automotive manufacturing and supply chains. In the US, two of the best-selling vehicles are the Toyota Camry and Honda Accord, which are both produced by Asian-owned manufacturers.
In addition, firms with manufacturing facilities in the US include Honda, Hyundai, Kia, Mazda, Nissan, Subaru, and Toyota. Prominent Asian manufacturers with factories in Europe include Nissan, BYD, Chery, and Toyota.
Looking at projections for manufacturing figures, Asian companies made up five out of the top ten global list of light vehicle manufacturers in 2026 from GlobalData, with a sixth through a French-Japanese partnership. Top of the list was Japan’s Toyota, predicted to produce 8.74 million light vehicles this year. There were three Chinese companies, with BYD expected to produce 5.45 million light vehicles, followed by 3.47 million from Geely Group, and Chery projected to produce 2.84 million. South Korea’s Hyundai was also in the top ten with 3.71 million light vehicles expected. While the French-Japanese alliance of Renault-Nissan-Mitsubishi as a projected 4.02 million light vehicles.
Volkswagen was the largest European manufacturer and second globally, with 5.79 million light vehicles expected in 2026. The second-highest European company and third globally was Stellantis – which owns Peugeot, Citroën, and Opel – and is projected to produce 5.69 million light vehicles in 2026. General Motors Group and Ford Group are two US companies in the top ten, producing a predicted 3.48 million and 2.78 million light vehicles respectively.
When it comes to EVs production, China is far ahead of other countries. China’s total EV production is predicted to rise by GlobalData from 5.526 million in 2022 to 12.246 million in 2030 from the global total of 16.516 million.
How the automotive supply chain is changing
The growth of EV production is also reshaping the automotive supply chain. Although EV assembly has become more efficient than that of conventional cars due to the simplicity of powertrains, the complexity arises from the critical minerals required for the right battery chemistry.
Critical minerals include lithium, graphite, cobalt, and nickel. In terms of refinement, China dominates global supplies, a trend the International Energy Agency predicts will continue only through 2030.
However, there are issues with the traceability of these materials when sourced, with multiple reports of unethical practices at mines in certain countries.
Issues of supply chain ethics and scarcity have led countries and regions to take action to improve supply transparency and source critical minerals from locations with greater transparency.
To improve the environmental, social, and governance (ESG) footprint of EV batteries, the EU is introducing legislation in 2027. The EU’s Battery Passport will require a digital record of all materials used in each unit.
Another now-common feature in cars is the hundreds of semiconductors to enable multiple smart functions. A global shortage of semiconductors in recent years highlighted the automotive supply chain’s vulnerability when over reliant on a limited number of production locations.
Flexible platforms to manage payments in automotive supply chains
To keep supply chains moving amid the multitude of factors at work, it is essential to use a payment platform that is flexible enough to accommodate a variety of demands. Any delays can have serious financial repercussions for suppliers and manufacturers alike.
Integrated solutions from companies such as SAP Taulia enable more effective working capital management. Through smart payables tools, businesses gain much-needed flexibility in their payment processes. Buyers can retain cash when required and access early payments, providing greater certainty for businesses and building resilience in the supply chain.
Using smart tools, it is possible to dynamically manage processes based on supplier criticality, risk profile, and capital costs for buyers. Structured mechanisms from SAP Taula deliver support for greater supplier liquidity.
Along with providing greater certainty for payments, SAP Taulia solutions can also aid the efforts of businesses to improve the sustainability profile across operations and supply chains.
A multinational automotive manufacturer sought to establish a sustainable supply chain but was not having much success in convincing suppliers to follow suit. That was until the company collaborated with SAP Taulia to implement solutions such as dynamic discounting and supply chain finance. Through analysis of its supplier base, the automotive manufacturer could identify suppliers that matched its desired ESG profile. Suppliers identified were then able to access lower cost rates for early payments to financially incentivize sustainability.
Download the document below to learn more about the changing automotive market in the US and Europe, as well as more details on SAP Taulia’s smart payment tools for manufacturers.
