Countries in the European Economic Area and Switzerland have committed almost €200bn (US$232.7bn) to electric vehicle ecosystems, including manufacturing and supply chains.
This figure includes €109bn (US$127bn) for the battery supply chain, up to €46bn (US$53.5bn) for public charging networks and €60bn (US$127bn) for the battery supply chain, according to research group New Automotive.
Chinese companies manufacture nearly 70% of the world’s electric vehicle batteries and supply battery cells for more than 80% of electric vehicles worldwide, according to the International Energy Agency.
Manufacturers like CATL and BYD control a majority of the refining capacity for battery materials like lithium. According to New Automotive, Europe now produces batteries for roughly one in three electric vehicles sold domestically.
Investment distribution across Europe
Germany accounted for almost a quarter of the region’s investment, according to New Automotive. France made up 18% and Spain and Portugal together are responsible for 12%.
Norway accounts for 1.6% of the total investment. Sweden accounts for 3.8%, Finland for 3.6% and Denmark for just 0.8%.
Nordic countries dominate Europe’s electric vehicle adoption, according to the European Environment Agency. Norway leads the world in percentage of electric vehicle sales and Denmark, Sweden and Finland lead the market.
Germany manufactures half of all electric vehicles made in Europe, according to the German Automotive Association. In December, the European Commission launched a plan to cut back its ban on internal combustion engine cars from 2035, instead opting for 90% of new cars sold from that date to be zero-emission.
Battery supply chain capacity
Batteries make up the largest share of capital in the research. This covers mining, refining, materials, gigafactories and recycling.
Europe has strengths in cell manufacturing and downstream integration. However, gaps exist in cathodes, precursors and parts of the mid-stream value chain.
Battery investments remain capital-intensive and subject to intensive international competition, according to the report. This gives them the highest sensitivity to delays, downsizing or cancellation.
Asian battery manufacturers like CATL and LG Energy Solution are already set up in the region. European-owned businesses, like Volkswagen’s PowerCo, are beginning to design, develop and produce cells entirely within the continent.
“We are the first European carmaker to establish our own battery cell development and production,” says Oliver Blume, Chief Executive Officer of Volkswagen Group. “This step strengthens our position and independence in the global competition.”
Manufacturing and charging infrastructure
Manufacturing of electric vehicles in Europe is centred on converting legacy automotive plants alongside selective new electric vehicle-only facilities, according to the report. Battery production is increasingly being co-located to reduce costs and manage supply risk.
This is primarily happening in established automotive regions like Germany and Spain. Both European original equipment manufacturers and international manufacturers are carrying out this work.
Tesla operates a €5.8bn (US$6.7bn) Gigafactory in Grünheide, Germany with an annual capacity of 375,000 electric vehicles. Stellantis has confirmed its plans to manufacture the Opel C-SUV BEV with Chinese carmaker Leapmotor at a plant in Spain, “leveraging the Chinese New Energy Vehicle ecosystem”.
Europe has established a position in manufacturing high-power charging infrastructure, according to New Automotive. More than €3.5bn is being invested across the continent in this manufacturing, with companies across Italy, Germany and the Nordics supplying ultra-fast systems.
Public roll-out of charging infrastructure is estimated to have commitments of between €23bn (US$27bn) and €46bn (US$53.5bn). More than a million public charge points have been deployed across the region.
China’s electric vehicle market
China is the world’s largest electric vehicle market, with 11.3m electric vehicle sales in 2024 according to the International Energy Agency. This made up 48% of its total vehicle sales.
The country invested at least US$230bn in the research and development of electric vehicles between 2009 and 2023, according to the Center for Strategic and International Studies.
This funding covers a range of government support, including exemption from 10% sales tax, funding for infrastructure, research and development programmes for manufacturers and government procurement of electric vehicles.
The country has also made regulatory changes, such as the dual-credit system. This pushes automakers to grow electrification and make electric vehicles easier for consumers to obtain.
