The CEE Automotive Summit roundtable provided fresh insight into the current state of the automotive transformations in V4 countries, as well as key takeaways for improving battery electric vehicle (BEV) uptake from outside the region.
The session opened with an update from Brussels where the European automotive industry has been lobbying hard for derogation from the stricter vehicle emissions law entering into force in 2025 to avoid the steep penalties for exceeding average fleet CO2 limits. The European automotive association (ACEA) pointed to sluggish BEV sales in recent years – which it blames on the discontinuation of subsidy programs in key markets – making compliance unrealistic. It goes on that the penalties would be crippling to an industry struggling under intense international pressure, not only undermining its ability to invest in the electromobility transformation, but effectively paying said non-EU competitors already in dominant market positions. The effort was successful, marked by the European Commission’s proposed amendment to the CO2 emissions performance standards 1 April 2025 as part of the Industrial Action Plan for the automotive sector, allowing manufacturers to meet targets based on a three-year average rather than annually.
While the points are all valid, they are far from the complete picture. First, not all European carmakers find themselves in a dire situation. Volvo already met the target while Stellantis and Renault launched small and affordable models in 2025 to achieve compliance by the end of the year. As a result, along with VW Group, their BEV sales have surged in 2025, with BEV sales up 24% y-o-y over the first three quarters of 2025, granted from a low 2024 baseline.
In reality,, OEMs in this position can mostly blame (or credit) themselves for years of short-term profit-seeking behavior, coupled with reasonable expectations they would get bailed out because of their outsized impact on the jobs market. Fossil cars generate more profits than EVs, and although registrations dropped precipitously from 2019-2022 they have since leveled off and continue selling post-Covid. Similarly, the industry has prioritized the higher margin premium BEV market while neglecting the small vehicle segment that would generate the volumes to meet the new CO2 target. As a result, BEV prices actually increased from 2021-2024, which is arguably the biggest reason for the sluggish sales.
V4 countries understand the importance of securing battery manufacturing plants with the looming prospect major job losses from traditional automotive linked to the combustion engine and have been working to secure deals with foreign partners.
The Hungarian government has been the most proactive and ambitious courting South Korean and Chinese investors in a quest to become a European EV battery producing hub. It is already the fourth largest battery producer globally which will be reinforced with its target of 250 GWh annual production capacity in coming years. This was punctuated with the CATL agreement announced in August 2022, marking the largest battery investment in Hungary and what will be the second largest battery plant in Europe. However, the terms of the agreement raises questions over the viability and durability of the government strategy. The foreign direct investment model offers little spillover effect – even less than the German automakers before them – and risks locking in dependency on imported Chinese technology and know-how. Furthermore, the concessions to multinationals, including the massive subsidies and lax environmental regulations, raise governance issues between with the EU and local authorities.
Slovakia, meanwhile, has taken a different approach to maximize technology spillover. The 20-80 joint-venture between its homegrown company Inobat and Chinese Gotion would be instructive for Europe, which has little choice but to onshore Asian lithium-ion battery technology to not only ensure jobs but also local content in the supply chain. The bloc simply cannot compete with China’s overwhelming dominance of the sector and must accept Asian batteries will power European BEVs for years to come. All four OEMs operating in Slovakia produce BEVs, meaning the country is in a favorable position for the transition.
Poland is also a major battery player, currently producing 60% of batteries used in the EU, with a growing list of diverse suppliers bolstered by special economic zones, skilled workers and clusters. Czechia, the only V4 country with a domestic OEM, is a top ten global EV exporter, doubling its output in the first half of 2025 y-o-y. However, the country is struggling to secure green field investment for battery production as plans for a gigafactory have been repeatedly delayed over disagreements between national and local governments, creating damaging uncertainty.
V4 BEV market penetration remains the lowest in the EU but there are positive signs of growth aided by the nascent 2nd hand market. For example, Czechia produces four times the amount of BEVs on its roads, but demand is increasing even after its subsidy program was ended. For Poland, even with 80% BEV growth in 2025 the share of registration is only 7%.
Finally, there were important lessons shared by more experienced Member States. For Portugal, a BEV leader, it was emphasized that consumers and car sales representatives alike need to be better educated and trained about the 2nd hand market. France’s most effective tool has been its corporate purchase mandate. Companies buy 50% of new BEVs while 85% of BEVs are purchased 2nd used, demonstrating the desired knock-on effect. Furthermore, France launched an extremely popular social leasing program for small EVs that was overbooked.
Italy, meanwhile, provides lessons about what not to do. There has been no clear direction from the government which has resulted in fear, uncertainty and doubt among industry, investors and the market. It changed the incentive scheme four times over the last five years, and the most recent announcement was not published for another six months. This has resulted in huge production loss from its domestic champion Stellantis, which has invested in other countries like Slovakia. Finally, Italy is proof that charging infrastructure is not a bottleneck to electromobility, reaffirming that there are a confluence of factors. Despite having the second most charging points in Europe behind the Netherlands, the share of BEVs remains small, leading low utilization rates and challenging ROI for charging companies.