Electrification is no longer a distant goal—it’s the reality of today. Electric Vehicles (EVs) and Hybrid Electric Vehicles (HEVs) have seen a significant rise in recent years. In the past few years, EVs have gone from being a rare sight to the sound of an electric motor driving by becoming a normal part of everyday life.
By 2025, they are expected to account for 20% of new car sales globally. However, this transition is not without its challenges, especially for Europe's automakers.
Introduction: The push for electrification
The automotive industry is on the brink of an electric revolution. Numerous tech-driven and EV-exclusive companies are stepping up to meet consumers' increasing demands for personalisation, safety, and functionality.
However, the rapid growth of this sector is met with numerous obstacles such as supply chain issues and innovation hurdles, which are becoming more prevalent for manufacturers.
According to a Charged EVs report, many automotive manufacturers are facing significant roadblocks as they strive to capture a share of the market, projected to reach USD 236.3 billion by 2030.
A study by Molex and Dimensional Research shows that 92% of design teams within the industry are grappling with challenges directly related to electrification.
Electrification and Europe’s ambitious goals
Europe's automotive industry is undergoing a major transformation, driven by the European Union’s Green Deal, which aims for carbon neutrality by 2050 and a 55% reduction in emissions by 2030 compared to 1990 levels.
These regulations are pushing manufacturers to phase out internal combustion engines and develop Zero Emissions Vehicles (ZEVs).
This drive towards electrification has been hindered by several factors, including the high cost of electric vehicles, the slow rollout of charging points, and potential European tariffs on Chinese-made EVs.
Hexagon reports that European car giants like Volkswagen, Ford, and Mercedes-Benz have delayed plans to phase out internal combustion engines due to these challenges.
Market pressures on European OEMs
The growing demand for EVs has put immense pressure on European Original Equipment Manufacturers (OEMs), who face competition from established brands such as Tesla, as well as emerging Chinese manufacturers.
As consumers increasingly prioritise sustainability, OEMs are racing to adapt to these shifting preferences.
In the UK, car production fell by 14.4% in July 2024 due to challenges linked to the EV transition. Despite this decline, the value of the sector remains strong, with electrified vehicles accounting for 37.5% of total output.
Higher costs and limited new models
One of the major issues hindering the growth of battery electric vehicles in Europe is their higher total cost of ownership. In Germany, EV prices remain around 20% higher than those of internal combustion vehicles, even after subsidies.
As Euronews reports, this cost disparity is a key factor in the slow adoption of EVs across Europe.
BMW defies the trend
Despite the broader challenges facing European carmakers, BMW has managed to buck the trend, reporting significant growth in its battery-electric vehicle market share.
BMW’s electric vehicle sales soared by 40% year-on-year in July 2024, pushing its market share to 4.6%, up from 3.7% in the second quarter of 2023.
"The i4 and iX1 keep selling very well and the recently launched i5 is contributing meaningfully to the annual growth rate," analysts wrote.
Unlike many of its competitors, BMW's decision to prioritise battery electric vehicles over plug-in hybrids appears to be paying off.
Engineering hurdles in electrification
Transitioning to electrification is not merely about replacing petrol engines with batteries; it requires a complete overhaul of vehicle design and manufacturing processes. EVs are much heavier due to battery packs, which need careful placement to maintain handling and stability.
Additionally, the thermal management challenges posed by EVs further complicate this shift. Engineers must now integrate advanced cooling systems and adopt new technologies to optimise performance and longevity.
Recently, software-related challenges have forced OEMs like Bentley to delay their EV projects. Unlike traditional internal combustion engine (ICE) vehicles, which have a more mechanical power delivery system, electric vehicles (EVs) rely heavily on software to manage power distribution to the drivetrain. This makes the design and development of a robust Battery Management System (BMS) critical but also extremely complex.
In EVs, the BMS needs to balance competing demands like range and performance, all while contending with the physical limitations of batteries, such as energy density and degradation over time. The development of such software is an evolving field that requires new sensors and technologies to capture precise real-time data.
However, the expertise in designing these advanced systems is still in its infancy, and the shortage of skilled engineers in this domain is contributing to project delays. As a result, many automakers are struggling to keep up with the growing demand for EV innovation, further slowing the transition to electrification
The role of advanced simulation and AI
Emerging technologies, such as AI-driven simulations and digital twins, are playing a pivotal role in helping OEMs overcome the complex challenges associated with electrification. As the automotive industry undergoes a radical transformation, these advanced tools offer a significant advantage by enabling faster, more efficient design processes.
AI-driven simulations allow engineers to test and refine vehicle components in a virtual environment, reducing the dependency on expensive and time-consuming physical prototypes.
By creating highly detailed digital twins—virtual replicas of physical assets—OEMs can simulate real-world conditions and predict the performance of new electric vehicle (EV) designs with unparalleled accuracy.
Monolith AI, a leader in AI-powered simulation, empowers engineers to rapidly iterate and optimise designs. This leads to faster time-to-market for electric vehicles and helps OEMs remain competitive in the fast-paced automotive sector. For instance, traditional methods might require multiple physical prototypes, which are not only costly but can also prolong development timelines.
In contrast, Monolith’s AI simulations can run thousands of virtual tests, providing instant feedback on design improvements and enabling rapid decision-making. This approach not only accelerates product development but also cuts down on costs related to material waste and labor-intensive physical testing.
Monolith AI’s collaboration with NIO Europe
A recent collaboration between Monolith AI and NIO Europe, a leading global electric vehicle manufacturer, showcases the transformative power of AI-driven simulations.
NIO, known for its innovative approach to electric mobility, partnered with Monolith AI to optimise the design and performance of their electric drivetrains. By leveraging Monolith’s AI simulation platform, NIO was able to accelerate the development of critical components, reducing the need for physical testing by 50%.
By using Monolith AI’s platform, NIO engineers could identify and resolve potential issues earlier in the design phase, leading to improved efficiency, safety, and vehicle performance.
Future outlook: What’s next for Europe’s OEMs?
The future of European OEMs will depend on their ability to innovate and adopt emerging technologies such as solid-state batteries and hydrogen fuel cells.
Check out this blog to learn more: Balancing sustainability and innovation: Investments in EV battery testing and AI integration.
Solid-state batteries offer higher energy densities and faster charging times, which could address many of the current limitations of EVs. Furthermore, hydrogen fuel cells may present a viable alternative, particularly for larger vehicles.
Read this blog to discover the potential of solid-state battery technology, its advantages over lithium-ion batteries, and the challenges of commercialization.
Conclusion
The journey towards full electrification is fraught with challenges, from high costs and supply chain disruptions to intense competition from Chinese manufacturers.
However, with continued innovation and collaboration, European OEMs have the potential to lead the charge towards a more sustainable future in mobility.
Read this blog to learn more: New developments in solid-state batteries: Samsung & Toyota
By embracing advanced technologies and fostering collaboration across sectors, the road to an electric future becomes more achievable for Europe's automakers.
