UE-made automotive is global leader in research and innovation, €73 billion spent in 2023

Brussels – Leading in investment in research and development and with production on the rise: The picture taken by Acea, the European Association of Automotive Manufacturers, shows an industry sector enjoying excellent health. There is also glory for electric vehicles, with battery-powered car models nearly tripling their market share by 2023.

However, Acea CEO Sigrid de Vries cautions that despite the positive results, “the challenges facing our industry are monumental, as we are going through the most significant transformation in over a century.” The preconditions for not getting crushed by the markets of China and the United States giants seem encouraging: a €73 billion expenditure on innovation, up by €14 billion from 2022, double the amount spent by the second largest investor in this sector. Car production in the EU reached 15 million vehicles, nearly two million more than the previous year. Commercial vehicle production also picked up, with a 20 per cent growth.

Although volumes for all vehicle categories remain below pre-pandemic levels, “this is the fastest growth in the last decade,” Acea points out. China leads the way in the global market, producing about a third of all vehicles, followed by Europe with 20 per cent and North America with 17 per cent. The share of passenger cars sold in Europe is growing—a fifth of global sales—along with the remarkable 10 per cent increase in worldwide sales. Sales were driven by battery electric models, which nearly tripled their market share. Commercial vehicle sales did even better, with registrations of electric vans and trucks almost quadrupling. Electric buses on European roads also doubled in 2023.

However, the share of plug-in vehicles on European roads remains decidedly low: Acea stresses “the need for stronger measures to stimulate the market and replace older vehicles.” The various incentives or tax schemes offered by most EU governments for electric vehicle buyers are insufficient: there is a lack of parallel incentives for charging infrastructure, available in only five member states.

Trade data were also promising. The value of EU vehicle exports exceeded that of imports, with a 5 per cent growth in the trade surplus over 2022. Curious is the figure for bus exports, which showed an extraordinary 286 per cent increase. The United States and the United Kingdom remain the top two destinations in terms of both units and value.