Europe’s EV transition at risk as China outspends EU suppliers by 57%
Europe’s ambition to lead the global electric vehicle (EV) transition is facing a structural investment drought. New data reveals that between 2021 and 2026, investment by EU automotive suppliers remained entirely stagnant. In stark contrast, Chinese investment in the sector surged by 57%, creating an asymmetrical global playing field that threatens Europe’s industrial backbone.
On top of that, current forecasts show European battery electric vehicle (BEV) production in 2032 has been revised down from more than 10.3 million vehicles to around 8.2 million – resulting in a cumulative shortfall of roughly 10 million vehicles by 2032 compared with projections made a year earlier.
While European suppliers have consistently committed capital to the transition, they are hitting an economic wall. Unprecedented structural production costs, fragmented supply chains, and regulatory headwinds in Europe are choking the ability to scale innovation competitively. This is also due to a regulatory and economic environment that currently penalises local scaling while global competitors accelerate with massive state backing.
Benjamin Krieger, Secretary General
EU investment does not keep pace with sales, while China accelerates spending to support growth
According to Oxford Economics, EU automotive suppliers kept annual spending on factories, machinery, and technology largely flat at around US$42 – 43 billion, between 2021 and 2026. China moved in the opposite direction, increasing investment by 57% over the same period to reach roughly US$115 billion by 2026.
Revenues grew in both regions, but China has widened the gap. Chinese revenues rose by 35%, compared with 23% in the EU, pushing China’s automotive supplier market beyond US$1 trillion; 2.5 times larger than the EU market.
The gap becomes even clearer when comparing investment to sales. In the EU, investment as a share of revenues fell from around 12% in 2021 to close to 10% in 2026. In China, it rose from around 9% to roughly 11%, overtaking EU levels by 2026.
The gap in BEV production forecasts between EU and China keeps widening
Current forecasts show a clear downward revision for battery electric vehicle (BEV) production in Europe compared with expectations a year ago. In the Q1 2026 outlook, LMC Automotive expects European BEV production to reach around 8.2 million vehicles in 2032, down from more than 10.3 million in the Q1 2025 forecast. That is a drop of over 2 million vehicles in 2032 alone. Across the 2026–2032 period, the cumulative downward revision reaches around 10 million vehicles.
China shows the opposite trend. One year ago, forecasts expected around 9.5 million BEV vehicles in 2032. Current projections now exceed 10.9 million. This means expectations for Chinese production have risen, with an upward revision of more than 1 million vehicles in 2032 alone and nearly 7 million vehicles cumulatively over 2026 – 2032.
Contact CLEPA Communications Team at communications@clepa.be
