The Automotive Industry's Transition towards Electric Vehicles and

its Alignment with the EU Green Deal Priority

The EU Green Deal

The EU green deal is a policy framework aimed at achieving climate neutrality by 2050, with a focus
on decarbonizing key sectors such as transport, energy, and buildings (European Commission, 2020).
The automotive sector is a critical focus of the green deal, with the goal of reducing emissions by
55% by 2030 and achieving zero emissions by 2050. The green deal includes several policies and
initiatives, such as the Clean Vehicles Directive, which sets CO2 emission targets for new vehicles,
and the Alternative Fuels Infrastructure Directive, which promotes the development of charging and
refueling infrastructure for alternative fuels.

The automotive industry:

The automotive industry is a critical sector that significantly impacts the global economy,
environment, and society. The sector has been grappling with sustainability challenges, including
resource depletion, pollution, and climate change. In response, the European Union (EU) has
prioritized green deal policies aimed at decarbonizing the automotive sector, promoting the use of
electric vehicles (EVs), and reducing greenhouse gas emissions. This report provides a literature
review on the automotive industry, EVs, and the EU green deal priority, focusing on sustainability
perspectives. The automotive industry is a significant contributor to global emissions, with over one
billion vehicles emitting an estimated 8.7 billion metric tons of CO2 annually (Moltesen &
Stanciulescu, 2021). The sector has also been associated with other sustainability challenges, such as
energy and resource depletion, air and noise pollution, and safety concerns. In response to these
challenges, there has been a growing shift towards sustainable practices, including the development
of EVs and the adoption of green deal policies. The automotive industry is one of the major
contributors to greenhouse gas emissions. In response to the climate crisis, the European Union (EU)
has established the Green Deal Priority, which aims to achieve carbon neutrality by 2050. As part of
this initiative, the EU has set a target of reducing greenhouse gas emissions by at least 55% by 2030.
This report examines the transition of the automotive industry towards electric vehicles (EVs) and its
alignment with the EU Green Deal Priority. The report presents a brief overview of the current state
of the automotive industry, the technological advancements in EVs, and the policies and incentives
that are driving the transition towards a sustainable future. The report concludes by highlighting the
challenges and opportunities that lie ahead for the automotive industry in achieving the EU's
ambitious targets. The automotive industry has been a major contributor to global economic growth
over the past century. However, the industry's reliance on fossil fuels has led to significant
environmental challenges, including air pollution and climate change. The EU Green Deal Priority
sets out an ambitious goal of achieving carbon neutrality by 2050, and the automotive industry has a
critical role to play in achieving this target. The transition towards electric vehicles (EVs) is a key part
of this effort, as they are cleaner, more efficient, and less harmful to the environment than
traditional internal combustion engine (ICE) vehicles. This report explores the progress made by the
automotive industry in transitioning towards EVs and its alignment with the EU Green Deal Priority.
The automotive industry is facing pressure to reduce its carbon footprint, and the transition towards
EVs is one of the key solutions. According to the International Energy Agency (IEA), the number of
EVs on the road is projected to reach 145 million by 2030, up from 11 million in 2020 (IEA, 2020).
This growth is driven by a combination of factors, including government policies and incentives,
technological advancements, and changing consumer preferences.

Electric Vehicles

EVs have gained significant traction in recent years, driven by factors such as increasing oil prices,
environmental concerns, and technological advancements. According to the International Energy
Agency (IEA), EV sales increased by 41% in 2020, with over three million units sold worldwide (IEA,
2021). EVs have several benefits, including reduced emissions, increased energy efficiency, and
reduced dependence on fossil fuels. However, there are also challenges to their adoption, such as
high costs, range anxiety, and infrastructure limitations. The transition towards EVs is driven by a
range of factors, including government policies and incentives, technological advancements, and
changing consumer preferences. Government policies and incentives are critical in driving the
adoption of EVs. The EU has established a range of policies and incentives to support the transition
towards EVs, including the deployment of charging infrastructure, incentives for EV purchases, and
regulatory standards for vehicle emissions. However, these policies may not be enough to accelerate
the transition towards EVs in the short term, and further policy measures may be required (Figueroa
and Moreno, 2020).

Technological advancements are also driving the transition towards EVs. Battery technology has
improved significantly in recent years, leading to longer driving ranges and faster charging times.
However, the cost of batteries remains a significant barrier to the widespread adoption of EVs, and
further research and development is required to reduce the cost of batteries (Sierzchula et al.,
2018).

Consumer preferences are also changing, as more people become aware of the environmental
impact of internal combustion engine (ICE) vehicles. However, consumer demand for EVs is still
relatively low, and more needs to be done to educate and inform consumers about the benefits of
EVs (Figueroa and Moreno, 2020).

One of the primary contributions of EVs to the EU's green deal priority is their potential to reduce
greenhouse gas emissions. A study by Han et al. (2021) found that EVs emit significantly less
greenhouse gases compared to conventional vehicles, even when accounting for the emissions from
electricity generation. The study also found that the emissions from the production of EVs are offset
after approximately 1-2 years of use.

In addition to reducing greenhouse gas emissions, EVs have the potential to improve air quality in
cities. A study by Li et al. (2019) found that the use of EVs in Beijing could reduce fine particulate
matter (PM2.5) concentrations by up to 19%, leading to significant improvements in air quality.
Similarly, a study by Lü et al. (2020) found that the use of EVs in Shenzhen, China, could reduce
nitrogen oxide (NOx) emissions by up to 21%, further demonstrating the potential of EVs to improve
air quality.
EVs can also contribute to the EU's green deal priority by reducing dependence on fossil fuels. The
EU imports approximately 90% of its oil, which makes the region vulnerable to price volatility and
geopolitical tensions (European Commission, 2019). By reducing dependence on fossil fuels, EVs can
increase energy security and reduce the EU's exposure to global oil markets.

Finally, the widespread adoption of EVs could lead to significant economic benefits. A report by
Cambridge Econometrics (2021) found that the adoption of EVs in the EU could create over 800,000
new jobs by 2030, mostly in the manufacturing and service sectors. The report also found that the
shift to EVs could increase GDP by up to €140 billion by 2030.

Sustainability Perspectives

The adoption of EVs and the implementation of green deal policies have several sustainability
benefits. EVs can reduce emissions, improve air quality, and increase energy efficiency. Green deal
policies can promote sustainable practices and investments, create jobs, and reduce dependence on
fossil fuels. However, there are also sustainability challenges associated with EVs and green deal
policies. For instance, the production of EVs requires significant amounts of resources and energy,
and the extraction of materials such as lithium and cobalt can have negative environmental and
social impacts. There are also concerns about the potential impacts of green deal policies on the
automotive industry, such as job losses and economic disruptions.

Challenges of EV’s and possible solutions:

The adoption of electric vehicles (EVs) is crucial in meeting the EU Green Deal Priority of reducing
greenhouse gas emissions by at least 55% by 2030. While EVs offer numerous benefits, including
reduced emissions and increased energy efficiency, they also present significant challenges. This
segment of the report shall examine the challenges and solutions of EVs in meeting the EU Green
Deal Priority, and provide recommendations for overcoming these challenges.

A number of challenges have been associated with EV’s widespread adoption. High costs, limited
charging infrastructure, and uncertain environmental benefits are among the key challenges facing
the EV market.

High costs remain a significant barrier to the adoption of EVs. While the cost of batteries has
declined in recent years, EVs remain more expensive than traditional internal combustion engine
(ICE) vehicles (IEA, 2020). This has limited the market for EVs, particularly in low- and middle-income
countries. High Cost of Batteries. Additionally, the production of batteries is energy-intensive and
can have a significant environmental impact. To address this challenge, the EU could invest in
research and development to reduce the cost of batteries. This could involve the development of
new battery chemistries or the optimization of existing battery technologies. Additionally, the EU
could provide financial incentives for the development of battery production facilities in the EU,
which would help reduce the cost of batteries by reducing transportation costs. Finally, the EU could
introduce a carbon tax on the production of batteries, which would incentivize manufacturers to
reduce their carbon footprint and promote the development of more sustainable battery
technologies.
Limited charging infrastructure is another challenge facing the EV market. The lack of charging
stations has limited the range of EVs and made them less convenient for long-distance travel
(Sierzchula et al., 2018). While the deployment of charging infrastructure is increasing, it remains
insufficient in many areas. In addition, the existing charging infrastructure is fragmented, with
different charging standards, making it difficult for EV users to find a charging station that is
compatible with their vehicle. To address this challenge, the EU must invest in the expansion of the
charging infrastructure. This could involve the installation of more charging stations, particularly in
areas where there is currently limited coverage. Additionally, the EU could incentivize the private
sector to invest in the development of charging infrastructure by providing tax breaks and other
financial incentives. To address the issue of compatibility, the EU could develop a common charging
standard, which would make it easier for EV users to find a charging station that is compatible with
their vehicle.

The limited range of EVs is another significant challenge facing their adoption. Currently, the range
of most EVs is between 150 and 250 miles, which is significantly less than the range of conventional
vehicles. This has made EVs unsuitable for long-distance travel, which has limited their appeal to
consumers. To address this challenge, the EU could invest in research and development to increase
the range of EVs. This could involve the development of new battery technologies, such as solid-
state batteries, which could provide significantly longer ranges. Additionally, the EU could invest in
the development of charging infrastructure that is capable of providing fast charging, which would
reduce the time required to charge an EV and make it more convenient for long-distance travel.

Uncertain environmental benefits are also a challenge facing the EV market. While EVs produce
fewer emissions than ICE vehicles, the production of batteries and the generation of electricity used
to power them can result in significant environmental impacts (Herrera et al., 2019). The
environmental benefits of EVs are highly dependent on the source of the electricity used to charge
them.

Policies and incentives have been established to overcome these challenges and drive the adoption
of EVs. The EU has established a range of policies and incentives, including the deployment of
charging infrastructure, incentives for EV purchases, and regulatory standards for vehicle emissions
(European Commission, 2020). The EU's Clean Mobility Package, which aims to reduce emissions
from the transport sector by 60% by 2050, provides a roadmap for the transition towards a
sustainable transport system (European Commission, 2018).

Potential solutions to the challenges facing the EV market include continued investment in research
and development to reduce costs and improve battery technology, the deployment of charging
infrastructure to increase the range and convenience of EVs, and the adoption of renewable energy
sources to power EVs.

Conclusion:

The adoption of EVs is crucial in meeting the EU Green Deal Priority, but it presents significant
challenges that must be addressed. While policies and incentives have been established to support
the transition towards a sustainable transport system, continued investment in research and
development and collaboration across industries will be needed to overcome the challenges facing
the EV market. By working together, policymakers, industry leaders, and consumers can ensure a
sustainable future for generations to come.