The Munich Wake-Up Call: Europe’s EV Struggles and the Road to Recovery

The Munich IAA Mobility 2025 revealed cracks in Europe's EV strategy, highlighting low consumer demand and challenges from Chinese manufacturers.

The Munich IAA Mobility 2025 exposed cracks in Europe’s EV strategy. While Mercedes and BMW unveiled advanced electric SUVs, consumer demand remains low, creating a gap between regulatory-driven production and market reality. Porsche’s falling margins highlight financial pressures that limit R&D and competitiveness. Meanwhile, Chinese manufacturers like BYD and Xpeng are expanding in Europe, using hybrids to bypass tariffs and establishing permanent operations. Supply chain reliance, weak charging infrastructure, and high costs exacerbate challenges. Coordinated action is needed: reassessing the 2035 combustion ban, investing in European batteries, leveraging hybrids strategically, and focusing on market-driven innovation to maintain Europe’s global automotive position.