What was investigated / analysed A comprehensive masterplan for the European automotive industry’s transformation was developed to address the unprecedented structural, economic, and technological challenges facing the sector. The analysis assessed Europe’s competitive position, value creation dynamics, and pathways to sustainable success amid the transition from internal combustion engines to battery electric vehicles. Why it was investigated The European automotive industry – historically a driver of prosperity, innovation, and employment – is facing declining global market share, rising production costs, and value-chain erosion. These developments threaten up to €440 billion in GDP contribution and 1.3 million jobs by 2035. The masterplan was developed to identify decisive measures that secure Europe’s industrial base and competitiveness while meeting decarbonization goals. Area of application The study applies to the European automotive ecosystem, including OEMs, suppliers, policymakers, and infrastructure providers, and spans manufacturing, supply chains, R&D, energy, and mobility regulation. Description of the methodology used The analysis combines quantitative assessments of value creation, cost and time-to-market benchmarking, and scenario modelling for economic and decarbonization outcomes. The resulting three-layer masterplan defines transformation within OEMs, collaborative value-chain development, and framework and infrastructure enablement. Presentation of case studies / application results • Market data show European OEM global market share declining from ~33% to 24% between 2000–2024, while Chinese BEV manufacturers now control >70% of the global BEV market • Value-add analysis revealed a drop in EU content, from 90% (ICE) to 20% (imported BEVs) • Benchmarking studies highlight that leading Asian OEMs achieve 2x faster dev cycles and up to 50% lower BEV costs, emphasizing the urgency for process and structural reform What was achieved The masterplan delivers a quantitative roadmap to secure Europe’s automotive future through economic viability, decarbonization, and resilience. Key outcomes include: • Defined investment needs across OEMs, suppliers, and infrastructure (€150B + €350B + €200–300B battery chain) • Actionable levers to halve development time and close cost gaps • A framework to build regionalized, resilient value chains (e.g., batteries, semicon) • Scenario comparisons outlining that flexibility in propulsion technologies (e.g., long-range hybrids, carbon-neutral fuels) may better balance climate, economic, and industrial resilience Conclusion: Europe’s automotive sector stands at a defining moment. Achieving sustainable competitiveness demands bold, synchronized action across industry and government – focused on rapid transformation, technological leadership, and strategic investment. Incremental change is no longer sufficient; the time to act is now.