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Europe's Car Industry Stuck in the Present - What the Continent is Doing to Buy Time

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  Published in Automotive and Transportation on Saturday, December 13th 2025 at 6:13 GMT by The Straits Times

Europe’s Car Industry Stuck in the Present – What the Continent is Doing to Buy Time

The automotive sector that has been the backbone of the European economy for more than a century now finds itself at a crossroads. A confluence of factors – from the rapid rise of electric vehicles (EVs) to a global battery supply crunch and the fierce competition from China – has left many European manufacturers scrambling to keep pace. In the article “Europe tries to buy time for car industry stuck in the present” (Straits Times, 2024), the author chronicles how policymakers and industry leaders are attempting to extend the window of opportunity for the continent’s traditional car makers while still aiming to meet ambitious climate targets.

1. The Core Problem: An Industry in Transition

For decades, Europe’s automotive industry has been synonymous with engineering excellence. In 2019, the region produced 11.9 million vehicles, accounting for about 32 % of global production. But the sector is now forced to pivot from internal‑combustion engines (ICEs) to battery‑powered machines. The shift is not simply technological; it carries significant financial, supply‑chain, and employment implications.

The European Union (EU) has set a target of a 60 % reduction in CO₂ emissions by 2030 and a 55 % cut by 2050 under the “Fit for 55” package. Yet, current EV adoption rates hover around 10 % of new car sales, falling far short of the 30 % projection the EU hopes to reach by 2030. In the words of EU Commissioner for Climate Action Kadri Simson, “We’re at a pivotal moment where the industry’s survival hinges on how quickly we can transition to greener technologies.”

2. Supply‑Chain Bottlenecks and the Battery Crisis

A recurring theme in the article is the battery supply crisis. Europe’s battery production is dominated by a handful of Chinese companies, such as CATL and BYD, that control over 80 % of global cell manufacturing capacity. Even as the EU pledges €30 billion in funding for battery research under the “Battery Alliance” (EBA), the continent’s domestic production remains a fraction of global demand.

The article links to a related Straits Times piece on the “EU’s battery strategy,” which delves deeper into how the EU plans to incentivise local cell production through tax credits, streamlined regulatory approvals, and public‑private partnerships. Germany’s “Made in Germany” battery initiative, highlighted in the article, is an example of a national strategy aimed at closing the gap.

3. Policy Measures: Subsidies, Incentives, and “Buy‑time” Strategies

The author notes that European governments are pursuing a “buy‑time” approach that balances short‑term financial relief with long‑term sustainability goals. Key policy measures include:

The article quotes German Economy Minister Robert Habeck, who emphasizes the need for a “just transition” that protects jobs in traditional manufacturing hubs while still pushing for innovation.

4. Competitive Pressure from China

China’s dominance in battery technology is a double‑edged sword. On one hand, Chinese manufacturers can supply cells at a lower cost; on the other, this places European OEMs at a competitive disadvantage. The article references a Straits Times interview with a former Volkswagen executive who warns that “without a robust domestic supply chain, Europe will continue to be a consumer rather than a producer of critical battery components.”

In response, the EU has drafted a “Strategic Partnership” memorandum with China that seeks to balance trade and security concerns, particularly around critical minerals like lithium, cobalt, and nickel. However, the policy remains controversial, with some EU members fearing that closer ties may undermine the region’s independence in key sectors.

5. The Role of Innovation and R&D

Beyond subsidies, the article highlights the importance of research and development (R&D). The EU’s €30 billion Battery Alliance is only the tip of the iceberg; the article points to additional funding streams such as the Horizon Europe program and national grants. These resources are earmarked for breakthroughs in solid‑state batteries, recycling technologies, and lightweight materials.

The article also touches on the collaboration between academia and industry. For instance, the Technical University of Munich and German automaker BMW are jointly developing a next‑generation battery that could halve charging time. Such partnerships are seen as essential to keep Europe at the cutting edge of automotive technology.

6. Looking Forward: Will “Buy‑time” Pay Off?

The article ends on a cautiously optimistic note. While the current strategies may provide temporary relief, the underlying issues—particularly the supply‑chain bottleneck—require a longer‑term solution. The EU’s “Green Deal” includes a “Circular Economy Action Plan” aimed at reducing material waste, which could indirectly benefit battery recycling and raw‑material sourcing.

Moreover, the author notes that public sentiment is shifting. A recent Eurobarometer poll shows that 62 % of Europeans support the government’s investment in EV infrastructure, suggesting that political will is not a major barrier.

In Summary

The Straits Times article paints a nuanced picture of a continent in crisis but not yet defeated. Europe’s automotive industry is confronting an existential challenge: transition to electric vehicles while preserving jobs and competitiveness. Policymakers are attempting to buy time through subsidies, tax incentives, and strategic investments in battery production and R&D. While these measures may buy months, if not years, of breathing room, the long‑term success of Europe’s automotive sector hinges on closing the domestic supply‑chain gap, fostering innovation, and securing a just transition for workers displaced by the shift away from ICEs.

The article serves as a reminder that the road to a greener future is fraught with economic and logistical hurdles, but also one paved with unprecedented opportunities for collaboration, technological advancement, and sustainable growth.