EV transition not a straightforward road for competitiveness, underscores new think tank report

EV transition not a straightforward road for competitiveness, underscores new think tank report

ACEA — 2025-07-08

News from Brussels

This report by the Centre for European Policy Studies (CEPS), supported by the European Automobile Manufacturers’ Association (ACEA) and building on the insights of expert researchers and stakeholders, examines key barriers and solutions for advancing the electric vehicle transition, with a focus on cars and vans.

As stated in the report: “This transition requires a significant transformation of existing supply and value chains, which will also impact the types of labour and skills needed in the industry. The shifting revenues and cost structures, as well as the competitiveness of the EU automotive industry, will determine whether electric vehicle (EV) sales can offset the anticipated decline in internal combustion engine vehicle (ICEV) revenues.”  

Europe currently finds itself at a critical turning point in the transition, as insufficient charging infrastructure, high total cost of ownership, and limited consumer confidence continue to restrict EV uptake in specific vehicle segments and markets. In turn, the average age of vehicles on our roads is rising.  

The industrial and enabling framework funding needs identified in the report make the magnitude of the transition’s challenges even more apparent. Establishing a sufficient supply chain and achieving manufacturing scale will be key to securing long-term competitiveness. 

Among some of the key challenges are: 

1. Higher EV production costs: The higher production costs for EVs compared to ICEVs drive up EV prices. The CEPS analysis found that average BEV prices of approximately €45,000 are necessary to maintain current pricing structures, whereas the average consumer’s willingness to pay is only €20,000 
2. Risks to European value added: As manufacturing processes and supply chains differ between BEVs and ICEVs, EU value added in vehicle production drops from 85–90% for ICEVs to 70–75% for BEVs 
3. Massive investment scale in EU battery production: Up to 70% of battery cells used in the EU are produced in China. To build a self-sufficient EU battery industry, an estimated annual investment of around €42 billion is needed until 2030 
4. Charging infrastructure roadblocks: Around €172 billion of investment is needed by 2030 to meet demand, yet administrative bottlenecks such as burdensome permitting and grid connection processes are hampering faster deployment 
5. Skills evolution: While the expansion of EV production may generate new local employment opportunities, it may not be sufficient to fully compensate for job losses in ICE supply chains and production lines. As many skills are transferable, upskilling and retraining will be important 

You can consult the full report on the CEPS website here: https://www.ceps.eu/ceps-publications/navigating-the-ev-transition/