Here’s how Europe is now dwarfing China in EV investments

Europe attracted €60 billion in investments for electric vehicles in 2019 — compared to China’s €17.1 billion the same year.

According to the Brussels-based nonprofit Transport and Environment, Europe’s 2019 figure is 19 times higher than it was two years ago, which was then €3.2 billion. In comparison, China’s figure was then €22 billion. In 2019, China’s investment figure dropped to €17.1. billion.

So basically, China’s EV investment dropped by a couple billion, and Europe’s exploded, far exceeding China’s.

Why the growth in Europe? A big part of it has to do with Volkswagen‘s investment in electric vehicles.

And the momentum will continue. As my colleague Fred Lambert wrote on May 19, EVs are expected to get a boost, including a VAT exemption, as part of the European Union’s pandemic recovery plan. Bruno Le Maire, France’s minister of economy and finance, said:

We are ready to support the demand for vehicles, but it will be support for clean vehicles that emits less CO2, especially electric vehicles.

European automakers are doing this because they have to in order to meet emissions reduction targets, and European states are discussing even further incentives. As the Financial Times explains:

The EU directive mandates that manufacturers reduce their fleet-wide carbon footprint to an average of 95g per kilometer by 2021, or risk fines amounting to billions of euros.

While the auto industry’s lobby group in Brussels has appealed for leniency in the wake of the COVID-19 outbreak — which brought car sales to a near halt and closed factories for weeks — Europe’s biggest carmakers have said they will comply with the new rules.

Despite car sales across Western Europe dropping by almost a third in the first three months of 2020, registrations of battery-powered vehicles rose 56% year on year, according to Berlin-based market researcher Matthias Schmidt.

Volkswagen has said they will invest €33 billion into EVs over the next four years. Their goal is to have 75 battery-powered models on the road by 2029.

Meanwhile, China is going to extend its EV subsidies and purchase tax exemption for two years in response to the pandemic, as Electrek reported on April 1, but temporarily eased its quotas for EV production to give carmakers a chance to catch up. As my colleague Bradley Berman wrote:

In its 15-year EV draft plan, Beijing set a target for EVs to account for 25% of annual new light-vehicle sales by 2025.