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Since 2019, global BEV sales have rapidly grown from 1.6 million to 9.6 million cars in 2023, or around 15% of the global market. Carmakers have been pouring investments into EVs and batteries in a race to electrify driven by global regulations, including the EU car CO2 standards. This briefing looks at the EV, battery and charging investment announcements made by 19 global carmakers between 2021 and 2023 to analyse which regions and carmakers are winning when it comes to EV investments.
Total global investment announcements in EVs, battery cells and charging by the 19 carmakers analysed in this study [1] have increased almost six fold between 2021 and 2023, reaching €150 billion in 2023 alone. In total €265 billion of investments were announced during this period, this is almost the annual GDP of Romania, indicating a strong appetite for EV investments.
Of the carmakers analysed, European carmakers were responsible for the largest share of announcements (34%), followed by Chinese (20%) and South Korean (18%) carmakers. Yet, while European carmakers have invested the most in electrification, North America - which is a smaller car producer than Europe- is the biggest destination for investments, securing 37% of announced investments compared to Europe’s 26%.
North America is the only region which has a large share of investments from non-domestic carmakers including European, Japanese and South Korean carmakers, lured by the generous local manufacturing subsidies granted by the 2022 U.S. Inflation Reduction Act for EV and battery production. In contrast the majority of investments in Europe (80%) are by European carmakers, with the remaining majority coming from Tesla, Geely, Nissan and Ford. The small share of investments by non European carmakers indicates a lack of attractiveness of Europe as a destination for foreign EV investments compared to North America.
Of the carmakers which have invested in Europe, only 6 (BMW, JLR, Renault, Mercedes, Nissan and VW) have directed more than 50% of their investments to Europe. Major European carmaker Stellantis has directed just 10% of announced investments to Europe, instead locating 74% in North America. This should sound warning bells for Europe: its current lack of a coherent EV industrial strategy to compete with China and the U.S. is hampering investment even from its own domestic carmakers.
European investments by carmakers were directed towards 10 EU Member States and the UK. The UK, Germany and Spain were the biggest beneficiaries, securing 71% of announced investments for Europe. The largest beneficiary was the UK, predominantly due to large investments by JLR accounting for 84% EV investments in the UK. In Germany, Tesla was the biggest investor with €4.5 billion followed by VW (€3.1 billion) and Ford (€2.7 billion). VW was the only investor in Spain, with announcements worth €10 billion. Italy, a major manufacturing hub for Stellantis, managed to attract just €1.3 billion and this investment now appears to be delayed [2].
While European carmakers have spent the most on EV investments in total between 2021 and 2023, growth in EU carmakers’ investments appears to now be slowing. After announcing €29 billion in investments in 2022, announcements increased by just €4 billion in 2023. This is likely due to the lack of tighter CO2 standards beyond 2025 until 2030, hampering the need for further growth in European investments for now. When normalised based on sales, European carmakers are already investing less than U.S carmakers. On average European carmakers invested €3,840 per car sold compared to €4,970 for U.S. carmakers.
This is concerning for the EV leadership of the European automotive industry, since 80% of European EV investments are by European carmakers and several European carmakers such as Mercedes, VW and JLR have recently announced delays in EV investments or their EV targets.
Attracting EV investment to Europe is critical for maintaining the strength of the European automotive industry and keeping automotive jobs in Europe as the market shifts to EVs. To successfully attract and lock in the EV investments needed to maintain the sustainable competitiveness of the European automotive industry, the following measures are key:
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The most important policy for attracting EV investments into Europe is maintaining the ambition of the EU car CO2 standards, including the 2035 100% zero emission target. This is crucial for providing carmakers with the regulatory certainty needed to credibly invest in EV and battery production in Europe. Reopening and any weakening of the standards would increase the risk of investing in Europe, sapping investments away from Europe to other regions.
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Europe urgently needs an EU investment package to continue to attract public and private investment in EV manufacturing and the EV battery value chain. T&E calls for a €1 trillion social and green investment plan with a Green Industry Fund at its core.[3] It should provide grants, loans and guarantees to scale up EV production in Europe and support the EV battery value chain. This is key to accelerate and de-risk private investments.
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The EU should support and reward local manufacturing, however this should not result in protectionism from meaningful competition or slow down EV uptake. Instead ‘Made in EU’ measures should be accompanied by accelerated EV production plans. Build resilience aspects into various public procurement and subsidy rules around electric cars and battery value chain manufacturing. For example, loans of the European Investment Bank to EV or battery manufacturers and EU grants under the EU Innovation Fund should include ‘Made in EU’ provisions. Reward more sustainable local manufacturing: This can be done via ambitious battery carbon footprint rules that should be proposed without delay. Similarly, national EV subsidies or clean manufacturing contracts can be used to encourage green ‘Made in EU’ production, as is currently done in France with its “eco-score” concept.
Notes to editors:
[1] BMW, JLR, Mercedes, Renault, Stellantis, VW, Honda, Nissan,Toyota, Hyundai, Ford, General Motors, Tesla, BAIC, BYD, Dongfeng, FAW, Geely.The actual investments made by companies in the 2021-2023 period are not covered by this study only investment announcements made during this period. Focusing on announcements over a 3 year period enables us to identify key trends in companies’ investment strategies. Still, corporations' investment cycle can span over a longer timeframe. Therefore, this study does not provide the full picture of the entire investment strategies of carmakers.
[2] Stellantis- backed battery maker ACC pauses plans for German, Italian plants.
[3] T&E. (2024) Towards a €1 trillion package for Europe.
