Transition of the automotive industry towards electric vehicle production in the east European integrated periphery

Abstract

This article analyzes the progress of the transition from the production of vehicles with internal combustion engines to the production of electric vehicles in eastern Europe. The transition is considered in the context of the development of the automotive industry in eastern Europe since the early 1990s and the relative position of the east European integrated periphery in the European automotive industry value chains and production networks. The article argues that foreign firms are driving the transition, while the role of the east European governments and local firms is much less significant. The transition is slower than in western Europe and eastern Europe will continue to produce internal combustion engine vehicles longer. Eastern Europe will continue to rely on its competitive advantage of low production costs, especially low labor costs, to continue to attract foreign direct investment in the automotive industry. The article considers the consequences of the transition for the position of east European countries in automotive value chains, production networks and the division of labor in the European automotive industry.

The realities of EU industrial policies analysed through automotive value chain dynamics

“…Depending on the level of influence or the level of ownership to act, improvement and monitoring could differ among HQ and FC economies. Headquarter economies might own the developments while factory economy chain partners are to execute and deliver actions, which can create polarised pressure points (Pavlínek 2022;Russo et al 2022). Besides legislative pressures, global competition also pushes carmakers towards electrification.…”

“…China and the USA are ahead in EV production: China is the global leader in EV manufacturing and the leading EV manufacturer is Tesla, an early mover US firm. European companies reacted later, but are catching up to their US and Chinese competitors (Fredriksson et al 2018;Pavlínek 2022;Túry 2019). Global competition is high in battery production as well, led by Chinese and South Korean firms and the EU is currently lagging behind (Delanote et al 2022;Simonazzi et al 2020).…”

Fagyos szelek idején

“…Magyarország esetében a 2007. évi 0,2298 forward participációs index 2017-re 0,2777-re nőtt, s ezt a változást a WTO példaként említi a feljebb lépésre (WTO, 2019:14). Más empirikus vizsgálatok is megerősítik Magyarország vagy a keletközép-európai országok (lassú, a tevékenységek szintjén vagy regionálisan korlátozott) feljebb lépését, akár egyes kiemelt iparágakban (autóipar) is, többek között például Kordalska & Olczyk (2022), Molnár et al, (2020), Pavlínek (2022) és Szalavetz (2022). növekedni kezdett.…”

European Union’s Structural Vulnerability in a Changing Geopolitical Environment

“…The two peripheries suffer from different fragilities, which descend from their common, albeit diverse, economic and financial dependence on the core. While the weakened industrial base of the South reduced its resilience, the Eastern European countries' integration in the core's value chains implied the risk of excessive specialization in few sectors, e.g., the weight of the automotive industry in their total value added, a risk which became evident in the current crisis (Pavlínek, 2023). This combination of structural divergence and economic interdependence lies behind the Union's fragility as well as the extremely slim likelihood of its disintegration, given the prohibitively high costs such a decision would entail for both the core and peripheries.…”