Several car factories in Europe and North America may face closures or be sold in 2025 due to overcapacity and intense price competition, according to a recent report from research and advisory firm Gartner.
Automakers are expected to reduce production capacity in these regions as they navigate emissions targets and tariffs. The firm also highlighted the increasing dominance of Chinese electric vehicle (EV) manufacturers, driven by their advancements in software and electrification technologies.
The report noted that closures or sales are more likely in high-cost countries, where political and societal pressures are compounded by growing competition. Gartner anticipates that Chinese brands may acquire plants in these regions to bypass trade barriers, or open new facilities in lower-cost European countries and free-trade partners like Morocco or Turkey.
In Europe, concerns about the impact of upcoming 2025 European Union CO2 emission rules have also been raised, with some industry leaders urging against penalties for companies that fall short of emissions targets. The European auto industry is also reportedly off track to meet its 2030 and 2035 EV targets, leading to concerns over the potential for artificial boosts in EV sales at the expense of combustion engine vehicle sales.
Despite these challenges, Gartner forecasts that shipments of electric buses, cars, vans, and heavy trucks will grow by 17% in 2025, with more than half of all vehicle models marketed by automakers expected to be electric by 2030.
To meet this transition, legacy automakers may explore partnerships with newer EV manufacturers and technology firms, and invest in software architecture and digital infrastructure to support the growth of electric vehicles.
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