What Powers Europe's Trams to "Accelerate" in the Slow-Fast Game?

The 2025 Munich Motor Show in Germany has kicked off, featuring a major showdown in the automotive world, with electrification remaining the key theme.

European car manufacturers such as BMW, Mercedes-Benz, and Audi have already revealed models like the BMW all-electric iX3, the Mercedes-Benz all-electric GLC EV, and the new all-electric concept car from Audi before the auto show. Chinese car companies are also showcasing their offerings, with BYD's Seal 06 DM-i travel version making its European debut, Avita presenting a new concept car, and the Xpeng P7 and Leapmotor Lafa5 making their first appearances...

China's electric vehicle industry chain also showcased its strength. On the eve of the auto show, CATL globally launched the NP3.0 technology platform, the highest safety level in the battery sector, locally debuting the first lithium iron phosphate power battery product equipped with this technology, the Shenxing Pro, demonstrating the new quality productivity from China.

Prior to this, Toyota announced it would invest 680 million euros to build a factory in the Czech Republic to produce its first pure electric vehicle in Europe; NIO declared plans to further expand its European market in 2025-2026; Xiaomi announced it would enter the European automotive market by 2027... All of these signal one thing: electrification in Europe holds great potential.

Accelerating Electrification in Europe

The industry generally believes that the electrification transformation of the European automotive sector is entering an accelerated phase.

In the first half of 2025, several car manufacturers, including Volkswagen, Renault, and BMW, saw a significant increase in electric vehicle sales in Europe. According to statistics from the Korean research firm SNE Research and the Japanese automotive information service MarkLines, the electrification rate in the European market rose from 23% to 26% in the first half of 2025, and it is expected to reach 29% by the end of 2025. This indicates a robust growth of 6 percentage points in the European electric vehicle market within just one year.

"The electrification rate in the European market has made significant leaps, from only a few percentage points in 2018 to about 26% this year. At that time (2018), many people couldn't see the potential of the European market, but CATL had already started to make arrangements. We saw the trend and future of electrification and were very determined to invest in overseas markets," recalled Zhu Lingbo, CTO of CATL's Overseas Business Unit.

At that time, CATL invested in establishing its first overseas battery production base in Erfurt, Thuringia, Germany. The following year, the European Commission announced a major agreement—the European Green Deal—committing to making Europe the first carbon-neutral continent by 2050. Two years later, the European Climate Law was enacted, legally enshrining the goals of the agreement and stipulating that net greenhouse gas emissions should be reduced by at least 55% compared to 1990 levels by 2030, and that climate neutrality should be achieved by 2050.

In Europe, where fuel-powered vehicles dominate, the automotive sector faces pressure to reduce emissions. The European Union has explicitly stated that by 2035, all new passenger cars and light commercial vehicles sold in Europe must have zero emissions, meaning that by 2035, the sale of fuel-powered vehicles will be banned in all 27 EU countries.

Image/Image by Visual China Group (VCG)

As the global electric vehicle market develops, the European automotive industry faces challenges in technological transformation, potential supply chain crises, and global competition. To address this situation, on March 5, the European Union issued the "European Automotive Industry Action Plan," introducing a series of strategic actions and funding support schemes to promote the automotive industry's advancement towards zero emissions, intelligence, and sustainable development. In March, the European Commission also announced a legislative proposal to increase the proportion of electric vehicles in company car purchases. According to the draft, the EU's originally planned 2035 internal combustion engine ban will have a "rehearsal" five years earlier, demonstrating the EU's determination to advance the automotive industry's transformation.

Under policy-driven initiatives, European car manufacturers are adjusting their product strategies, with traditional European carmakers like Mercedes-Benz, BMW, Audi, and Volkswagen all undergoing transformations. The vast market attracts global attention, with numerous car manufacturers and supply chains setting up in Europe, collectively driving the transformation of the European electric vehicle industry.

The Game of Fast and Slow

Turning an elephant around is no easy task. Based on the current state of electric vehicles in Europe, a new round of policy and market battles has begun. Recently, several executives in the European automotive industry have expressed concerns about the 2035 ban on the sale of internal combustion engine vehicles and have even suggested postponing it. Some European automakers have already adjusted their plans to cease selling fuel-powered cars, attempting to signal to policymakers through a slowdown in electrification that "I know you're in a hurry, but please hold on."

These car companies are heavily reliant on fuel vehicles, and coupled with Europe's lack of a complete industrial chain for developing the electric vehicle industry, battery technology, and insufficient charging infrastructure density, it is difficult for car companies to offer low-cost products. Take charging stations, for example, the distribution within EU countries and between member states is uneven, with nearly 60% of charging stations concentrated in Germany, France, and the Netherlands.

Ideals are rich, but reality is stark. The call to "slow down" also stems from rational consideration—if you want to go fast, you must first pave the way. Slowing down does not mean abandoning electrification; these companies are actively seeking solutions. For example, in the field of power batteries, they clearly understand that batteries, like the internal combustion engines in fuel vehicles, are the "power heart" of electric vehicles and require reliable partners. As early as 2012, BMW placed an order with CATL, which had just been established for a year, accompanied by 800 pages of German production standards. Over two years, they engaged in a "slow-cooking" style of cooperation to jointly explore industry standards.

Over the past decade, CATL has become the world's largest supplier of power batteries and has established partnerships with 90% of leading automotive manufacturers in Europe, firmly grasping the characteristics of the European market. Zhu Lingbo mentioned that core issues such as price, range, and safety continue to trouble European consumers. Lithium iron phosphate batteries, with their excellent safety performance and cost advantages, have become a key choice in the electrification strategies of European car companies.

Ningde Times Shenxing Pro Lithium Iron Phosphate Power Battery

This statement is not without basis. For European car manufacturers and consumers, "performance, safety, range, and price" are high-sensitivity focal points, and none can be overlooked. CATL offers the "perfect match" solution with the Shenxing Pro "long-life version" and "supercharge version." Firstly, lithium iron phosphate batteries are low-cost and have a mature supply chain, which is welcomed by European car manufacturers. For example, Volkswagen uses lithium iron phosphate technology in entry-level electric cars, Stellantis is collaborating with CATL to build a 50GWh lithium iron phosphate battery plant in Spain, laying the foundation for its promotion.

"Long-life version" longevity: Sets a new global record for passenger car battery lifespan with 12 years and 1 million kilometers. It offers an ultra-long WLTP range of 758 kilometers and a degradation rate of 9% after traveling 200,000 kilometers, making it suitable for cross-border long-distance travel and long-term rental markets. The "supercharge version" currently holds the title for the fastest supercharging speed among lithium iron phosphate batteries in Europe, with a 12C peak charging capability. It can replenish 478 kilometers in just 10 minutes, and at minus 20°C, it takes only 20 minutes to charge from 20% to 80%, with a WLTP range of 683 kilometers. These excellent performances help reduce consumers' range anxiety and vehicle usage costs.

The three major factories built by CATL in Germany, Hungary, and Spain also help reduce costs for car manufacturers. For example, the Hungarian factory is adjacent to BMW and other plants, allowing for nearby supply. CATL has also proactively addressed the high standards of carbon emissions and recycling set by the European Battery and Waste Battery Regulations. According to data from Bernstein Research, CATL has captured nearly 50% market share in Europe over the past five years and is a significant force in driving the local green transition.

Today, in the contest between the “speed” of policy and the “slowness” of the market, Europe is forging a transformation pace suited to its local context. Meanwhile, Chinese companies represented by CATL are seizing the opportunity to accelerate Europe’s electrification transformation through innovative technologies and solutions.

A marathon race

"‘It's Europe vs China’. Reuters set this tone before the start of the Munich Auto Show. Industry insiders generally believe that this auto show is an unprecedented intense 'clash' between the Chinese and European automotive industries. In the previous show, which was in 2023, there were only 70 Chinese exhibitors. This year, it has reached 116, covering the entire industry chain, including new energy vehicles, three-electric systems, and automotive intelligence software and hardware."

"China" has become an indispensable presence in the European market. Whether it is vehicle manufacturers or the ecosystem chain, China has already been at the forefront of transformation.

The rapid development of China's electric vehicle industry is inseparable from the coordinated growth of industries such as software, semiconductors, intelligent systems, and power batteries. This synergy allows vehicle manufacturers and upstream and downstream suppliers to engage in in-depth and comprehensive cooperation. For instance, companies like Seres, Li Auto, and Volkswagen China collaborate with CATL in a highly customized manner, conveniently enjoying the performance benefits brought by battery technology iterations, and collectively driving industry evolution with advanced experience.

An all-electric SUV equipped with CATL battery

Europe is weak in the software, microelectronics semiconductors, and battery industries related to electric vehicles. An increasing number of European automakers are collaborating with the Chinese supply chain to make up for shortcomings in the industrial chain. Companies such as Volkswagen, Stellantis, BMW, and Renault have established cooperative relationships with Chinese industry chain enterprises like CATL.

Such exchanges and cooperation are conducive to promoting the development of the global automotive industry. Whether in the era of internal combustion engines, where vehicle manufacturers and component companies collaborate to enhance the driving experience of fuel-powered vehicles, or in the era of electrification, where vehicle manufacturers work with battery manufacturers and software developers to jointly expand the boundaries of intelligent electric driving, they ultimately achieve complementary advantages and drive the entire industry forward.

In the era of electrification, racing is not about going it alone; only through collaboration can we achieve spiraling progress. Currently, electric vehicle technology is continuously evolving, and the industry calls for a spirit of long-term commitment. It's like running a marathon; automakers are the runners, and supply chain partners are the support. Only by working hand in hand can we run further and faster.

The tide is surging, the road ahead is wide open, and every vehicle has its path.

Electrification is the prevailing trend, and as the cradle of the automotive industry, Europe faces structural adjustments and urgently needs to explore suitable transition paths. "CATL still regards the European market as an important market and is optimistic about its electrification rate, with at least a 100% growth from 2026 to 2050," Zhu Lingbo stated confidently.

The European market is vast, and Chinese enterprises have great potential. "European electric vehicles with a CATL heart" – CATL has conquered the European market with its technology and quality, carving out its own path for international expansion, which is worth emulating. We also believe that through complementary advantages and collaborative innovation, the global automotive industry will step into a new stage of high-quality development.