
The Impact of the EU's Green Technology Push on the Automotive Industry
The EU has introduced a series of measures to ensure the availability of essential raw materials and establish production capabilities for green technologies.
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CIO Applications Europe | Friday, April 14, 2023

EU's green technology push present some short-term challenges for the automotive industry, it is ultimately a positive development that will encourage innovation and benefit both the industry and the environment in the long term.
FREMONT, CA: The EU has introduced a series of measures to ensure the availability of essential raw materials and establish production capabilities for green technologies. These measures are aimed at securing the supply of critical components necessary for the manufacturing of electric vehicles (EVs), such as rare earth materials. The EU recognises the importance of maintaining competitiveness in the market and has acknowledged the significance of accessing key materials and components for the development and construction of EVs.
Critical Raw Materials
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The Critical Raw Materials Alliance (CRMA) is primarily concerned with EU-based mining, refining, and recycling of critical raw materials to enhance the circular economy. One of its primary goals is to safeguard European industries from future disruptions, such as those caused by the COVID-19 pandemic and the conflict in Ukraine, which caused significant disruption to supply chains. The demand for raw materials required for consortium has reached unprecedented levels. The EU is projected to require 12 times more lithium by 2030, as it is a crucial component used in the batteries of electric vehicles (EVs) and plays a significant role in the shift towards cleaner technologies.
The EU has set a limit that no more than 65 per cent of its annual use of any raw material should be sourced from a single third country by 2030. The EU has recognised the challenge of achieving complete self-sufficiency and will continue to depend on imports for most of its consumption. Technologies and products of strategic importance rely on electric cars, chips, solar panels, heat pumps, pharmaceuticals, ammunition, and raw materials.
The demand for precious and scarce resources is increasing rapidly, prompting the EU to enhance its efforts in extracting, refining, recycling, and diversifying to ensure secure and sustainable access to critical raw materials. Auto manufacturers are still facing restrictions to ensure they have full control over the supply chain of raw materials.
Net-Zero Technologies
Europe is committed to becoming a climate-neutral continent, and to achieve this goal, it is necessary to increase the production of technologies that have a net-zero impact on the environment. This includes the manufacturing of wind turbines, solar panels, and renewable hydrogen.
The European Union has set ambitious goals to increase the production of goods within its borders, with a target of manufacturing 40 per cent of the products needed for net-zero technologies by 2030. To become a hub for hydrogen production, pilot auctions for renewable hydrogen production are expected to be launched this year.
The EU's green technology push, which includes the implementation of strict emissions regulations and incentives for the development and adoption of electric and hybrid vehicles, is expected to have a significant impact on the automotive industry. In the short term, automakers will need to invest heavily in research and development to produce vehicles that meet the new emissions standards. This could result in higher costs for automakers and potentially higher prices for consumers.
However, in the long term, the push towards green technology will benefit the automotive industry by creating new opportunities for innovation and growth. Companies that invest in electric and hybrid technology now are likely to be better positioned for future success as consumers increasingly demand more environmentally friendly options.
Furthermore, the shift towards green technology is not limited to the automotive industry but extends to other sectors such as energy production and infrastructure. This creates opportunities for collaboration and partnerships between different industries which could result in even more innovative solutions.
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