Wake-up call for Europe's auto industry

Wake-up call for Europe's auto industry

“The automotive industry is the backbone of the European economy, but due to a lack of investment in innovation and electromobility, we are in danger of finally losing our lead,” warns Gudrun Meierschitz, CEO of Acredia. Austria's leading credit insurance protects outstanding claims at home and abroad with a total value of over 35 billion euros and is a subsidiary of Oesterreichische Steuerbank AG and Allianz Trade, the world market leader in credit insurance. “It is time for a strategic change of course,” emphasizes Meierschitz, pointing out that although a slight increase of two percent in the global car market is expected in 2025, this will be driven by China (4.0 percent) and the USA (2.5 percent). Europe, on the other hand, continues to lag behind with only 1.5 percent growth, particularly due to high production costs, a lag in innovation and increasing customs disputes.

Encouragement instead of punishment

China dominated the EV market with growth of 40 percent in 2024, while Europe was the only major market to see declining EV sales. At the same time, Asian manufacturers benefited from the hybrid boom with an increase of 20 percent. "China is investing billions, the USA is protecting its markets - but Europe is relying on fines instead of targeted support. That is not sustainable," warns Gudrun Meierschitz. A 10-point plan for Europe's auto industry is intended to regain lost competitiveness: This includes targeted investments in battery and charging infrastructure, a slim model range and stronger international cooperation. Successful models such as China (USD 231 billion in funding), Norway (comprehensive charging infrastructure) and Tesla (technological leadership with a few, efficient models) show the way. What is now needed is industrial policy that specifically strengthens innovation and production in order to secure Europe as an automotive location. European carmakers would have to reduce their model range to five to six competitive hybrid and electric vehicles and invest more in battery production and charging infrastructure to reduce dependence on China. At least ten percent of sales should flow into research and development, while new markets such as India, Vietnam and South America offer growth potential.

The future is at stake

At the same time, political measures are needed: 40 to 50 percent tariffs on imports with less than 75 percent European production share could bring in two billion euros annually. An investment package of 150 to 200 billion euros for charging infrastructure as well as a 15 percent purchase premium for electric cars under 45,000 euros with European added value are intended to promote electromobility. In addition, five percent of the EU Horizon program should be used for battery research, autonomous driving and recycling in order to secure Europe's innovative strength in the long term. The European automotive industry is at a historic turning point. Without targeted reforms, market share risks shrinking further while China and the USA expand their leadership positions. "Europe must take control again. With the right mix of innovation, strategic investment and industrial policy support, Europe as an automotive location can not only survive, but thrive," said Meierschitz.