top of page

The Three Missing Elephants in the EU Auto Industry Debate

Writer: Emin AskerovEmin Askerov

Another week, another report on the state of the EU auto industry—this time from Allianz Research. But compared to the hard-hitting Dunne report I covered last week, this one misses three elephants in the room.


What the Report Recommends:

The Allianz report offers a familiar playbook to restore the EU auto industry's edge:

  • Smaller EV Line-ups: Focus on 5-6 models with hybrid and electric versions.

  • Vertical Integration: Invest in mining, battery supply chains, and charging infrastructure.

  • Software Investment: Build software-defined vehicles and pursue autonomous driving.

  • IRA-style Subsidies: Implement major incentives to drive the transition.

There are more recommendations, but these are the big ones. Yet, the report fails to confront three massive realities:


🐘#1: Incumbent OEMs Can’t Execute This Plan

The first elephant is the complete inability of legacy OEMs to implement these recommendations. Why? They lack both the cash and the will.

  • No Cash: OEMs are bleeding from collapsing ICE margins and rising EV losses. The report ignores the fact that executing its plan would mean gutting their ICE operations, shedding 80% of their workforce, and facing mass bankruptcies.

  • No Will: Boards are paralyzed by short-termism, fearing shareholder revolts and labor unrest. This isn’t a pivot - it’s a bloodbath. And it won’t happen.


🐘 #2: Massive Subsidies Aren’t Coming

The subsidies the report calls for are pure fantasy.

  • Political Dysfunction: EU governments are gridlocked and focused on defense spending, not auto bailouts.

  • No Appetite for More Spending: With government incomes stalling, there is much less room to launch an IRA-style package.


🐘 #3: The EU Already Has a Pure-Play EV Maker - Just Not in the EU

The third elephant: The report claims Europe has no pure-play EV manufacturer. Wrong.

  • TOGG in Turkey: While not technically in the EU, TOGG is the closest thing to a pure European EV player. 

  • Cooperation, rather than integration: Repeating the Tesla and BYD model is out of the question - there is just no time and no capability. TOGG is a case in point; it is not vertically integrated, sourcing its batteries from Farasis Energy.


What’s More Likely to Happen:

  1. New OEMs from the South and East:  I’d expect Middle Eastern and North African players to emerge, partnering with Chinese and Korean battery firms. EU firms might catch up, but I see no signs to support that. 

  2. Software-Led Disruption: New players will focus on EV software - not just hardware - to win consumers and address cybersecurity concerns.

  3. The EU Will Miss Its Moment: Without bold action, the EU risks ceding the future of its auto industry to players beyond its borders. And there is just no 


The Allianz report is well-meaning, but these three elephants make its roadmap unrealistic. Europe's auto future may be forged outside its borders.


Read the full report here:




  • X
  • LinkedIn
  • alt.text.label.Instagram
  • alt.text.label.Facebook

© Emin Askerov, 2023.

bottom of page