Structural Challenges in Europe's Green Transition: Bottlenecks to Electric Vehicle Adoption and the Urgency of Industrial Reshaping

Europe is at a critical structural turning point. In terms of decarbonizing the energy system, Europe is showing positive signals: in 2024, the share of clean energy in its electricity mix has risen to 71%, indicating the leading position of renewable energy and nuclear power in the energy supply. However, there is a significant disconnect between this energy-level progress and the electrification rate of final energy consumption. The decarbonization progress in the power sector is not equivalent to a fundamental shift in final energy consumption patterns, which exposes a structural contradiction in Europe's choice of energy transition path.

The transport sector, as one of the largest sources of emissions in European energy consumption (accounting for about 29% of total greenhouse gas emissions), is becoming the main "bottleneck" in this transition. Although the EU has set ambitious goals for zero-emission roads by 2035, the adoption rate of electric vehicles (EVs) has not reached expectations. This slow transition is not merely a technical issue but is constrained by multiple interconnected economic and policy factors.

Firstly, cost and market acceptance are core obstacles. The pricing of locally produced electric vehicles in Europe is generally higher than market expectations; many models cost over 30,000 euros, with average prices even exceeding 50,000 euros, which severely restricts their market penetration among low- and middle-income groups. Furthermore, the speed of charging infrastructure deployment and regional policy differences also affect consumer confidence and purchasing decisions.

Secondly, strategic dependence on supply chains constitutes an undeniable vulnerability. In the field of electric vehicle batteries, Europe still faces dependence on foreign facilities and imported raw materials in terms of production capacity and key input materials. Import tariffs imposed by the EU to support domestic manufacturers, while aimed at protecting European industry, may also limit the choices of domestic consumers in the short term and highlight the urgency of achieving strategic autonomy in key technologies and components.

From an industrial policy and competition perspective, the EU's "Clean Industrial Deal" aims to combine decarbonization goals with economic competitiveness to prevent the green transition from leading to industrial hollowing out. However, to achieve this goal, Europe must move beyond mere subsidies and tariff protection toward deeper structural reforms: optimizing the interconnection of charging networks, accelerating the decline in battery technology costs, and building more resilient and diversified internal European supply chains. If industrial transformation fails to successfully convert green technology into sustainable employment opportunities and competitive advantages, Europe's green strategy may face risks to political sustainability.

Looking ahead, Europe's green future depends on whether it can solve the "last mile" problem—from decarbonizing the energy system to electrifying final consumption.Looking ahead, Europe's green future depends on its ability to solve the "last mile" problem of decarbonizing the energy system to electrifying the end-user. This requires not only continuous policy commitments but also an upgrade of the industrial ecosystem—a synergistic development of technology and business models that can effectively reduce electric vehicle costs, establish local battery manufacturing capabilities, and ensure energy infrastructure can support large-scale electrification. Europe's green competitiveness will ultimately depend on its ability to successfully navigate the complex challenges brought by this key structural reshaping process and achieve a virtuous industrial upgrade.