Europe, the Arsonist Firefighter

When the Green Strategy Sets Everything Ablaze

While the European Union aims to be at the forefront of the ecological transition, it sometimes seems to be undermining its own industry. By imposing ambitious—and at times contradictory—rules, Brussels risks triggering the collapse of the entire automotive sector, both directly and indirectly. Some compare the situation to that of an "arsonist firefighter": measures intended to save the planet but which, in reality, fuel a crisis across an entire economy.

Low Volumes of Electric Vehicles

In 2024, fully electric vehicles represent only about 13% of the European market. This figure, far from meeting the declared ambitions, reveals major challenges for the industry in its race toward electrification. While the transition was supposed to be smooth, the reality of the market shows that the adoption of BEVs (Battery Electric Vehicles) is struggling to gain traction, partly due to a gap between consumer expectations and the realities of infrastructure or associated costs.

An Industry in Trouble

The signs of weakness are not limited to low sales volumes. The entire automotive supply chain is taking a hit:

Bankruptcies and Restructuring: Many players, from suppliers to manufacturers, are seeing their balance sheets weakened by an uncertain economic climate.

Job Reductions: Job cuts are increasing, affecting not only large companies but also many subcontractors.

Financial Struggles: Massive investments in technologies still in development, combined with regulatory pressures, are putting severe strain on the industry’s financial health.

This situation is part of a broader trend in which the entire automotive sector is being forced to evolve in an increasingly hostile environment.

Consumer Confusion

While manufacturers and suppliers struggle to find solutions, customers are left feeling lost. Faced with a diversifying offer—hybrids, BEVs, and other alternative technologies—the average consumer hesitates, uncertain about the reliability of new solutions and worried that prices will continue to rise. This confusion, amplified by sometimes contradictory government communications, only deepens the market's disenchantment.

A Waste of Public Funds

In a context where industrial competitiveness is at stake, Europe is dedicating significant sums to subsidies and projects whose efficiency remains highly questionable. Massive public investments, sometimes poorly directed, are further burdening a structure already weakened by political and economic decisions that struggle to coalesce around a clear and coherent vision for the future of the automotive industry.

European Manufacturers Losing Ground

Once synonymous with innovation and quality, major European manufacturers are now seeing their image and leadership challenged. Unable to compete with the rising momentum of some international competitors, especially the Chinese, they are being forced to completely rethink their strategies. These competitors, with their mastery of the BEV value chain and even innovations in combustion engines—such as hydrogen initiatives—have gained a head start, buying or investing in struggling companies to consolidate their position.

Gigafactories in Trouble: The NorthVolt Example

The rapid rise of battery factories, touted as the pillars of the electric revolution, is also encountering setbacks. Some gigafactories, like NorthVolt, are struggling to keep up with uncertain demand and fierce international competition. These difficulties highlight the complexity of the transition: investing in future technologies without an immediate guarantee of profitability is a risky bet that, if miscalculated, could lead to more bankruptcies in an already battered sector.

The Case of Porsche: A Recalibrated Strategy

Even automotive giants are not immune to these disruptions. Porsche, for example, recently abandoned its goal of an entirely electric range in favor of diversification, including increased production of combustion engines—at the cost of sacrificing some profit margins. This change in direction, in the face of high uncertainty, reflects European players’ desire to find a balance between ecological transition and economic viability.

Heading Toward a Regulatory Dead End?

By setting ambitious deadlines—such as the ban on combustion cars by 2035—the European Union appears to have adopted a radical approach. However, the proposed measures hint at flexibilities that could paradoxically undermine the industry's competitiveness. By seeking to impose a rapid transition, Brussels risks hastening the demise of the sector while leaving the door wide open for international competitors, especially in Asia, who are already adept at handling new technological challenges.

Conclusion

While the stated goal is to save the planet, Europe’s chosen path may turn out to be counterproductive. With insufficient BEV volumes, a struggling industry, perplexed consumers, and questionable public investments, all signs point to a looming crisis. The example of Porsche shows that it’s never easy to choose between technological innovation and economic imperatives. Without a thorough revision of its strategy, Europe risks becoming, like an arsonist firefighter, an unwitting player in the downfall of its own automotive industry.