EU Has Capacity to Produce Twice Current Demand for Electric Cars, Study Finds

Investment in European electric vehicle manufacturing has slowed as the bloc now has the capacity to build more than double the number of EVs that consumers are buying, according to new research obtained by Europe Express.

The findings come ahead of a December 10 package of proposals from Brussels aimed at supporting Europe’s struggling automotive sector and reassessing the planned 2035 phaseout of combustion engines. The ban has become increasingly contentious, with divisions evident both among member states and within the European Commission, raising the prospect of delays.

A new report from Bruegel, published today, shows that investment in EV production facilities grew rapidly until early 2024 but has since weakened. The think-tank’s Clean Investment Monitor, which tracks investment at the facility level, estimates that the EU currently has capacity to manufacture about 4.6mn electric cars annually, equivalent to 200 per cent of current demand.

Germany hosts the largest share of EV capacity, supported in part by Tesla’s €5.8bn plant that opened in 2022. Bruegel’s data also indicates that Spain and Hungary are now among the most significant destinations for clean tech manufacturing investment, despite Hungary’s political objections to aspects of EU climate policy. Both countries have secured substantial Chinese investment: CATL is building a €7bn battery plant in Hungary and a €4bn facility in Spain in partnership with Stellantis. Earlier investment flows were dominated by South Korean companies, including LG Energy and Samsung.

Simone Tagliapietra, a senior fellow at Bruegel, said the excess capacity shows that Europe must focus more on stimulating demand for electric vehicles, not only on subsidising production. He called for better co-ordinated purchase incentives and warned against creating uncertainty by diluting headline measures such as the 2035 engine ban. With European manufacturers facing pressure from Chinese competitors and US trade measures, “exports will not offer a way out,” he added.

Delayed publication of EU competition decisions draws criticism

Separately, the EU’s inconsistent timing in releasing competition rulings is hampering companies’ ability to challenge them, according to a complaint filed with the European Ombudsman, reports Barbara Moens. The trade body Cloud Infrastructure Services Providers in Europe argued that long publication delays risk “a denial of justice,” citing the commission’s approval of Broadcom’s acquisition of VMware. Although the deal was cleared in 2023, the commission did not publish a public summary until May this year.

CISPE is seeking to annul the decision at the European Court of Justice. The commission said it aims to publish decisions promptly but must protect confidential business information during the review process.