Transition to Electric Vehicles

Andrea Diaz Rincon (), Aurelien Genty (), Juan Ruiz Garcia () and Wouter Vergote ()
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Andrea Diaz Rincon: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Aurelien Genty: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Juan Ruiz Garcia: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Wouter Vergote: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en

No JRC145139, JRC Research Reports from Joint Research Centre

Abstract: The European Union (EU) automotive industry is facing challenges as Chinese electric vehicles (EVs) are increasingly gaining market share due to lower prices and perceived higher quality. In the last decade, the industry's reliance on foreign components has increased slightly (from 8% to 11%), but this modest increase masks the heterogeneity of EV and internal combustion engine (ICE) manufacturing. The distinction between EVs and ICEs is particularly important for inputs where the EU lacks a comparative advantage, such as batteries. Using a new methodology developed under the SMILE EU project, we disaggregate the automotive sector to separately assess technological differences and foreign dependencies for ICEs, EVs, and vehicle parts. Our analysis reveals that EVs have a significantly higher reliance on foreign components than ICEs (29% vs 13%, respectively). We find that this disparity is largely attributed to global value chain (GVC) strategies, rather than a domestic technological shortfall. These findings underscore the need for policy initiatives at an EU-wide level aimed at reducing outsourcing through GVCs and boosting European competitiveness in EV manufacturing.

Date: 2026-03
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