European automotive industry faces crisis amid electric‑vehicle transition

The European car sector is confronting a deep structural crisis as demand for traditional internal‑combustion models wanes and competition from Chinese manufacturers intensifies. Stricter EU emissions standards and the 2035 ban on new gasoline and diesel cars are forcing manufacturers to accelerate electric‑vehicle (EV) development.

German groups such as Volkswagen have seen profits halve and sales fall, prompting talks of large‑scale job cuts and plant closures, while other European makers like Stellantis face similar pressures. Politicians are criticised for delaying clear EV policy frameworks, and the loss of cheap Russian gas after the Ukraine war has further strained costs. The slowdown threatens supply‑chain jobs across the region, including in the Czech Republic and Slovakia, where the automotive industry has long been a key economic driver.

Analysts argue that while EV sales are rising, the transition must be managed to avoid massive layoffs and preserve the competitiveness of European manufacturers in a market increasingly dominated by Chinese and US rivals.