Europe's EV makers and associated industries pumped money into their trade at almost four times the rate of China throughout the course of 2019. Whilst the Chinese have long ruled when it comes to investing in an electric future, the veritable explosion in the European EV industry has seen it not only overtake China, but thrash it.

Non-profit, clean transport organisation, Transport and Environment, has crunched the numbers and throughout 2019, Europe secured €60 billion in EV investment – including vehicles and batteries. This is compared to China's €17.1bn.

This €60bn figure is 19 times more than that for mid-2017 to mid-2018 which stood at a pitiful €3.2bn. During that 2017-2018 period China pumped €21.7bn into its EV market, whereas in 2019 its investment dipped slightly to 'just' that €17.1bn figure. So it's not because of China completely dropping the ball that Europe has taken the top spot – it's simply because car makers over here have hit the metaphorical accelerator pedal on their EV projects.

Where has this investment come from?

The short answer is Germany, which accounted for €40bn of the total investment. VW invested €33.3bn in its domestic market thanks to the new ID. range of EVs. Tesla also announced it was funnelling €4bn into Germany due to building Gigafactory Europe just outside of Berlin.

Volkswagen was by far and away the biggest investor outwardly into the rest of Europe, too. €6.6bn flowed into the Czech Republic so that it can start production of VW Group EVs. Italy benefited from €1.7bn from the FCA group and the UK follows with €1.2bn from Jaguar Land Rover over the course of 2019. Other countries received investment in the hundreds of millions of euros range, too.

Continuing investment in Europe

Whilst the investment made during 2019 was substantial, the Coronavirus outbreak and subsequent catastrophic effect on the car industry has seen both the EU Commission and individual governments jump to kick-start it up again with incentives and investment.

We reported that the EU Commission has drafted a plan for a stimulus package for green vehicle production which covers a €30bn purchasing facility and €60bn investment fund. The document, which was first seen by Bloomberg, also suggested that VAT could be wiped from the cost of a new EV – something which has helped countries like Norway become EV-dominant.

On an individual basis, France's President Macron has announced a package worth almost €8bn to help lift the country's auto industry out of the doldrums. It will be used, in part, to incentivise consumers into buying EVs and hybrids, with €6300 off the list price of an EV and €1800 off the price of a hybrid. Given that France has some 400,000 unsold cars sitting around, shifting these will be a big priority as the country tries to bounce back from the COVID-19 recession.

Saul Lopez, e-mobility manager at Transport and Environment, said: “COVID has wrought human tragedy and economic turmoil. But the EU and governments can use the recovery to emerge with a healthier, greener economy that reinforces its EV industrial strategy and creates thousands of jobs.”

Can China bounce back?

Probably not – for the time being at least. In response to the Coronavirus crisis the government there has temporarily lifted its EV production quotas, but it has also extended its EV purchase subsidies that have helped make EVs so popular there for some time now. The bottom line, however, is that Europe's investment has been so substantial that China will struggle to catch up quickly.

China will continue to drive innovation and battery production, but increasingly countries are realising that domestic giga-style production of EV batteries is required to maintain a sustainable motor industry into an electric future. Ultimately, China may end up being self-serving rather than a massive exporter of batteries.

Discover EV's take

Europe overtaking China was inevitable and the surprising fact here is perhaps more that it's taken this long for it to happen. That said, the investment in EVs within Europe has not been piecemeal – it's been huge. Being cynical we could argue that European manufacturers have been pushed into it thanks to emissions targets coming in, and in VW's case to make up for its own emissions scandal, but whatever the case under the skin, it's most certainly welcome news.