‘China turns everything upside down’: Top 5 risks for EU automotive sector in 2025
File photo shows thousands of new vehicles awaiting export at a port. (AFP Photo)
The European Union’s automotive industry is set to face five significant risks in 2025 amid China’s growing global dominance, with ongoing challenges in the transition to electric vehicles, Türkiye’s Automotive Manufacturers Association (OSD) Chairman, Cengiz Eroldu, has warned.
Eroldu emphasized that while the European Union is striving to steer the electrification process, investments remain incomplete.
“Currently, Europe is far below the required levels when it comes to charging points. On one hand, automakers are urged to transition to electric vehicles, but on the other, insufficient effort is being made to improve the infrastructure,” he stated.
Eroldu also noted shifting consumer preferences for automobiles across Europe: “Excluding countries like Norway, Denmark, and Sweden, we observe a decline in BEV (battery electric vehicles) sales in Europe. In particular, the market share of BEVs in Germany has dropped by 26%, while sales of internal combustion vehicles have increased by 5%. Germany is Europe’s largest market, and although BEV penetration in other countries has risen by 7% on average, it is still far behind the desired 30% level.”
Emission pressure on EU automotive industry
Referring to the EU’s emission targets, Eroldu reminded that European automotive companies will soon stop selling internal combustion and mild-hybrid vehicles.
“They will either have to accept fines to maintain their current production or attempt to sell only electric vehicles.
This situation will lead to significant profitability losses. Each brand has its own strategies, but it’s a highly challenging scenario,” Eroldu commented.
The EU has urged automotive manufacturers to achieve zero emissions by 2035. However, the transition plan for 2025-2035 has been criticized as unrealistic, with claims that the industry will struggle to adapt technically within this timeframe.
Is China a real threat?
Highlighting the rise of China as a global powerhouse in electric vehicles, Eroldu pointed out that European manufacturers are rapidly losing market share in China.
He explained that China is expected to close 2024 with a production of around 30 million units, while its total production capacity is officially stated as 48 million.
“China claims it will meet 60 million of this demand alone, which is a clear threat to other global manufacturers and industries,” Eroldu said.
As a giant market for the global automotive market, Eroldu also remarked that China’s domestic vehicle market is witnessing a rapid increase in the market share of Chinese manufacturers while German, Japanese, and American companies are experiencing a swift decline.
“At this rate, foreign brands may soon disappear entirely from the Chinese market,” he stated.
Top 5 risks for EU’s automotive industry in 2025
Eroldu outlined five key risks facing the EU automotive industry in 2025:
- Political and economic uncertainties
- Overcapacity in global production
- Pressure to meet emission targets
- Profitability challenges stemming from electrification
- Increasing Chinese dominance
