Can the global battle for electromobility pose a threat to Central Europe?
Can the global battle for electromobility pose a threat to Central Europe?

Author(s): Konrad Popławski
Subject(s): Business Economy / Management, Energy and Environmental Studies, Economic policy, Environmental and Energy policy, Government/Political systems, International relations/trade, Financial Markets, Transport / Logistics
Published by: OSW Ośrodek Studiów Wschodnich im. Marka Karpia
Keywords: The balance of trade; EU; China’s expansion in the field of electromobility; IRA;
Summary/Abstract: The Inflation Reduction Act (IRA) adopted in 2022 marks a profound change in the US’s approach to its economic competition with China. This will have global consequences, and will also come to affect Central Europe. Since this document was adopted, Washington has used subsidies to restrict access to the American market as a fully-fledged tool of its industrial policy. This is aimed at blocking the expansion of the Chinese automotive industry in the US and pushing it out of Western companies’ supply chains. As a result, Beijing will most likely utilise its resources to dominate the European market, capitalising on the advantages it already has. The discussion about the European response to the IRA, as well as the growing dependence of German companies on Chinese technologies in the field of electric vehicle production, suggest that Germany and Central Europe are drifting apart as regards the automotive industry, even though they used to have similar interests in this area. German vehicle manufacturers are opposed to imposing restrictions on vehicles made in China on the European market, as they fear retaliation and losing competitiveness. From the Central European perspective, the increasing presence of Chinese electric vehicles (manufactured by both European and Chinese companies) in the EU poses a threat to a key pillar of economic growth. The region has experienced unfair competition from Beijing for years, but it has managed to gain a foothold as a car production hub; its position may be undermined as a result of China’s expansion in the field of electromobility.

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