In his EUdemos contest essay, Pietro Macchia, student at I.I.S. L. da Vinci-Fascetti in Pisa, addresses a critical issue facing Europe’s economy: the decline of the European automotive industry. Through the lens of the recent Draghi Report on European Competitiveness, Pietro highlights how internal fragmentation and delayed innovation are undermining one of Europe’s historical industrial pillars.
Europe’s Automotive Decline: A Wake-Up Call
Over the last two decades, Europe has lost ground in vehicle production. While the EU has seen a decline, countries like China have surged ahead, rapidly increasing both production and export to European markets.
Pietro identifies several key reasons for this competitive erosion:
- Higher production costsin Europe
- Technological delaysin electric vehicle development
- Brand value erosiondue to slow adaptation
- Dependence on non-European suppliers, especially for batteries and chips
These trends are threatening the EU’s ability to lead the transition to sustainable mobility.
The Rise of China: A Strategic Challenge
At events like the Porte de Versailles automotive expo, Chinese manufacturers showcased cutting-edge electric vehicles with aggressive strategies to penetrate EU markets. Even new EU tariffs on Chinese EVs might not stop their expansion—companies like BYD are already relocating production to low-cost European-adjacent countries such as Hungary and Turkey to circumvent duties.
This dynamic, Pietro warns, risks making Europe strategically dependent on non-European technologies—an issue with deep geopolitical implications.
The 2035 Deadline and the Call for Industrial Strategy
The EU’s goal to phase out internal combustion engines by 2035 is both necessary and controversial. Pietro notes that:
- Some CEOs, like BMW’s Oliver Zipse, see the deadline as unrealistic and dangerous
- EU institutions, however, affirm that dialogue and transition supporthave already begun
- Industries have 11 yearsto adapt to this fundamental shift
He suggests that without a cohesive industrial action plan, the 2035 goal risks becoming a burden instead of a catalyst.
Solutions: What Should the EU Do?
To restore leadership and ensure a just transition, Pietro proposes:
Short-term:
- Avoid relocation of EU automotive production
- Prevent state-subsidized acquisitions by foreign manufacturers
- Continue decarbonization without weakening the EU industrial base
Medium-term:
- Restore competitive leadershipin next-generation vehicle innovation
- Maintain and strengthen European production hubs
- Support market-driven transitionbased on global demand patterns
At the core of his message is a call for a reformed and united EU, capable of acting strategically and swiftly.
Conclusion: Reform the Union, Protect Europe’s Industrial Future
“The automotive sector is not just an industry. It is a symbol of European identity, innovation, and integration.”
Pietro Macchia’s essay resonates strongly with the Draghi Report’s conclusion: Europe must reform itself politically to remain competitive globally. That includes giving strategic sectors like automotive the vision, coordination, and leadership they need to survive and thrive.
“The Automotive Industry: One of the Pillars to be Reformed
“To be competitive, we must reform the Union,” Draghi reiterates in the Report dedicated to the future of European competitiveness. He analyses the decline of the EU in many sectors and identifies internal fragmentation as one of the first impediments to the advancement of a common European interest. There is a serious situation of uncertainty and a general inability to innovate cutting-edge technologies, the cause of which can be inexorably traced once again to the absence of a common political authority that goes beyond national vetoes.
A sector greatly affected by this lack of cohesion and planning on the part of the EU is the automotive industry, which has already shown signs of loss of competitiveness. To demonstrate this, it is enough to analyze the data of the last two decades of the number of vehicles produced: in the EU it has decreased; on the contrary, in China production has grown and in parallel has increased the number of vehicle imports, so much so that it is now the main extra-European supplier, effectively downgrading the European automotive industry.
The most obvious reasons for this stringent competition are the higher costs, delays in technological capabilities, the growing dependence on third markets and the slow loss of brand value.
The automotive industry has always been a driving sector in Europe, but due to recent worrying developments, a major question has arisen regarding its future. China, unlike the large European automotive companies, is making giant strides in technological innovation of electric vehicles, which are leading to the slow erosion of the combustion engine and, at the same time, increasing the risks of excessive dependence on Asian producers, with all the geopolitical implications that this entails.
This was made evident in the latest exhibition dedicated to the sector at Porte de Versailles, where nine Chinese companies presented new state-of-the-art machines and strategic plans to penetrate European markets.
Faced with all this, it seems that the only timely response given by European institutions has been the application from this November of protectionist duties on vehicles imported from China, a move that appears to be counterproductive according to some manufacturing departments, which have announced that this could lead to a further weakening of the sector. Companies such as BYD, for example, have already devised ways to circumvent European tariffs, by moving the manufacturing sites of the cars they will sell in Europe to countries where the cost of production and labor is lower, such as Hungary and Turkey, thus bringing the European automotive industry to its knees, already struggling to integrate into the world of electric vehicles.
In the report, moreover, it was pointed out how relevant it is to consider the 2035 European target for decarbonisation in the automotive sector, by implementing a common industrial action plan. This deadline has been subject to some criticism, including that of Oliver Zipse, CEO of BMW, who calls it unrealistic and a threat that could lead to the mere failure of the automotive industry. A spokesperson for the Commission, however, retorts that European institutions have always been in dialogue with industries to achieve the 2035 target and that industries currently have eleven years to prepare for the ban on the production of diesel and petrol engines.
In order to cope with this crisis, a series of solutions should be adopted: in the short term, a radical relocation of production outside the EU or the rapid acquisition of European plants and companies by foreign producers subsidized by the state should be avoided, while continuing decarbonisation at the same time. In the medium term, on the other hand, a competitive leadership position should be re-established for the “next generation” of vehicles and the European production base should be maintained with current technological advantages until international markets show some demand.
It remains evident, therefore, in order to implement this, how necessary a reorganization of the EU is through reforms that lead to a political cohesion capable of coping with an increasingly competitive international context.
By Pietro Macchia
School I.I.S L. da VINCI-FASCETTI”
