Last year, Europe surpassed China in investment for electric vehicles and batteries, analysis found.

Driven by the EU’s CO2 car targets, industries and governments have invested 3.5 times more towards electric vehicles (EV) and battery production in Europe than China, according to Transport & Environment’s (T&E) May report.

This comes as stricter CO2 targets are helping attract higher sums of zero emission vehicles. An impressive 19 times higher than in 2018, the NGO reported.

€40bn, by far the largest chunk of the overall investment went to Germany, coming mainly from Volkswagen Group, as well as the US EV giant Tesla.

Volkswagen has plans to produce 75 all-electric vehicle models globally by 2029. They also contributed to the €6.6bn investment in EVs and batteries in the Czech Republic last year, the analysis found.

In response to this increased investment, Saul Lopez, e-mobility manager at T&E, said that the stricter targets had “concentrated carmarkers and governments’ minds” to “finally close the gap with China” in EV investment terms.

“A few years ago, Europe was nowhere in the race for EV supremacy,” he said. “Success in this market is now Europe’s industrial policy, and lawmakers should double-down with stimulus measures that will also drive a green recovery.

This input of investment comes as tougher EU vehicle CO2 targets are implemented, requiring car manufactures to only emit a maximum of 95 grams of CO2 per kilometre on average from cars sold starting in 2021. If these regulations are not followed automakers could potentially face multibillion-euro fines.

The transition time for companies to implement such changes has been severally impacted by the COVID-19 pandemic as production has been halted worldwide.

The pandemic has been detrimental to the automobile industry. 2020 was expected to be the year of the electric car in the EU, with early 2020 records showing record plug-in sales.

Since lockdown measures have been implemented, car sales have plummeted by 23 percent, according to a BloombergNEF report.

In order to help the EV industry bounce back quicker, T&E has urged EU policymakers to ensure any aid the car industry receives is contingent on firms prioritising EV production post-COVID.

Furthermore, they said that EU and national post-pandemic aid to the stricken car industry should build on this investment and support a green recovery by purchasing incentives to boost zero-emission car sales, especially in corporate, taxi and car-sharing fleets.

Read the full report here.