The global auto market is facing a growing risk of fragmentation into three geopolitical blocs, amid escalating trade barriers and international tensions between the US, Europe and China. This development comes as battery electric vehicles (BEVs) reached a record global market share of 16% in the first quarter, after a 42% increase in sales compared to the same period in 2024, according to the latest Autofacts report by PwC. The development was mainly driven by the Chinese market, which generated over 60% of global sales and reached a share of 27%.
Despite this growth, the transition to electromobility is not proceeding at the speed previously forecast. Geopolitical uncertainties, as well as divergent policy decisions at the international level, are complicating the adaptation of local auto industries to new requirements.
Europe is trying to stay competitive through support and flexibility measures, while major markets such as the US and China are adopting aggressive protectionist policies. In this volatile landscape, Romania needs to rethink its stimulus policies to avoid missing out on the transition to electric mobility.
Europe, recovery in major markets, but with persistent challenges
After three quarters of decline, Europe has made a solid comeback. In the top five major markets — the UK, Germany, France, Italy and Spain — BEV sales increased by 30% in Q1 2025. The UK and Germany are leading this recovery, with increases of 43% and 39%. Italy and Spain are following closely behind, with advances of 73% and 69%, although from a lower starting point. France is the only one to record a 7% decline, following the expiration of state subsidies.
Despite the upward European trend, Romania has seen a sharp decline in electric vehicle sales, a development generated by the delays in the Rabla program. According to data from the Directorate for Driving Licenses and Vehicle Registration (DRPCIV), in the first quarter of 2025, electric vehicle registrations fell by 36.4%, which continued in April with a 70% decline, all against the backdrop of the delay in the Rabla program. It is expected to start this week. The program is very important, as the Romanian automotive sector risks losing ground at a critical moment in the global transformation.
European action plan to relaunch the automotive industry
To face global competition and support the green transition, the European Commission launched in March 2025 an action plan dedicated to the automotive industry, a sector that contributes 7% to EU GDP and supports around 13 million jobs.
This plan focuses on five key areas: innovation and digitalisation – investing in products and reducing external technological dependency, clean transition – more flexible emissions rules and accelerating the development of charging infrastructure, resilient supply chains – investing in critical raw materials for batteries, skills and social adaptation – professional retraining towards electromobility and a level playing field – support for fair competition with subsidised foreign manufacturers.
The European Parliament has approved a temporary relaxation of CO₂ emission targets for cars and vans. Compliance will no longer be assessed annually, but on an average over the period 2025–2027. The measure comes in response to calls from the industry, which warned of potential fines of up to €15 billion for the slow pace of electrification compared to global rivals.
Outside Europe, the United States and China are taking drastic measures to protect their respective industries, in an exchange of tariff increases, which is now suspended for 90 days.
China, the global leader in battery production (98%) and a major player in the lithium-ion battery value chain, continues to invest heavily in innovation to reduce its dependence on foreign technologies.
The global automotive industry is reconfiguring itself between economic pressures and the transition to electromobility, and success will depend on the ability of manufacturers in the industry to innovate, collaborate and adapt quickly to new market conditions.