acf domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/ecg/ecgassociationdev/wp-includes/functions.php on line 6121Automotive News Europe — 2026-03-01
Automotive Industry
European suppliers face a “polycrisis” — a collision of slow electric vehicle adoption, intensifying Chinese competition, rising demands from automaker to reduce prices, and regulatory fragmentation. Those combined challenges threaten 350,000 jobs by 2030, according to the European Association of Automotive Suppliers (CLEPA).
Between 2024 and 2025, automotive suppliers announced 104,000 job cuts, CLEPA Secretary General Benjamin Krieger said in a release.
Germany’s Tier 1 suppliers have been hit particularly hard.
Weaker profit margins, less output
Consultancy Oxford Economics projects annual supplier investment will flatten at €35.6 billion by 2030 from a projected €33.5 billion in 2025. This reflects a downward revision from previous projections of €39.6 billion.
In addition, about 50 percent of suppliers plan to further reduce production capacity in Western Europe over the next five years due to weak profitability, according to CLEPA. This comes as more than 75 percent of suppliers expect profit margins below the 5 percent threshold needed for long-term sustainable investment, the supplier lobbyist group said.
Chinese competition intensifies pressure
Suppliers are suffering a knock-on effect as large automakers book multi-billion-euro charges to reflect lower-than-expected demand for battery-electric vehicles. For instance, on Feb. 6 Stellantis announced €22.2 billion in charges primarily linked to reversing its BEV strategy, which includes write-downs on R&D and canceled vehicle programs.
While BEV sales continue to rise in Europe, overall demand for them is “fragile,” Krieger said. European BEV output reached 3.3 million units in 2025, far below the 4.8 million once expected, CLEPA added.
The BEV slowdown has created a “bumpy recovery road” for suppliers, characterized by significant job losses and shifted investment priorities, according to Deloitte’s 2026 Global Automotive Consumer Study.
And suppliers are facing intense pressure from automakers to lower prices. For example, BYD has asked suppliers for a 10 percent price reduction to stay competitive, the study said.
Europe’s lack of a battery champion
Adding to the upheaval is that Europe has struggled to build a homegrown battery industry, with 11 out of 16 planned European-led battery factories delayed or canceled, making European automakers more dependent on Chinese and Korean alternatives.
As a result, many European suppliers are facing a “polycrisis,” Stefan Bratzel, director of the Center of Automotive Management (CAM) told Automotive News Europe.
“On the one hand, we have a sluggish European market. Then you have the costs of transformation toward electromobility, where it is becoming clear that it is difficult to get the volumes. Also, the U.S. tariffs are affecting exports. And car manufacturers are trying to reduce costs and see suppliers as a cost factor.”
Intensifying competition from China is a major pressure point, with 69 percent of suppliers already reporting direct competition from Chinese imports, according to CLEPA.
Suppliers are also battling fragmented regulation. Europe must safeguard its industrial capacity, advance deregulation and bring down energy costs, Krieger said. European suppliers are ready to compete globally and deliver the BEV transition but “we cannot run a marathon with our shoelaces tied together.”
Future outlook: Can Made-in-Europe rules help?
Going forward, European suppliers now have to “regain a kind of robustness and adapt their capacities to the new market conditions. They’re competing in a new market, a new area of technology meaning new competitors, and that is sometimes not easy,” CAM’s Bratzel said.
Krieger said clarity is also needed to safeguard the future of European suppliers.
A European Union proposal aimed at doing that, the Industrial Accelerator Act, was to be released Feb. 26 but has been postponed until March 4.
The act, known as the IAA, could protect Europe’s auto industry from Chinese competition, including rules that could require 70 percent of an electric vehicle’s value to be made in Europe to qualify for incentives.
As BEV growth slows, suppliers are inevitably shifting their focus to components for hybrid vehicles. Hybrids are “essential” according to Krieger, “now and in the future.”