10. Sustainable Mobility and Industrial Policy

Focusing on the automotive industry, this chapter addresses the problem of Europe’s vulnerability (e.g., import dependency, technological backwardness in key domains) and the hypothesis of the obsolescence of its growth and production model. First, we analyze the evolution of the Sino-German relationships highlighting the emergence of two divergent trajectories: while a well-tailored combination of industrial and trade policies allowed China to become the leader in electric vehicle (EV) production, the German development model, mostly driven by the choices of key carmakers, slowed innovation, fostered fragmentation within the European Union (EU) and created the conditions for the current vulnerability. Second, we identify the key elements— i.e., increasing demand for affordable EVs, investments in infrastructure for the provision of public goods, building-up a European Directorate for Resource Security—of a European industrial policy for sustainable mobility which may help achieve the multiple goals of decarbonizing the economy, increasing resilience, and reducing inequalities between and within countries.