Europe’s mobility industry faces converging pressures to transform
The mobility industry continues to face a perfect storm of change — from tightening EV regulations to shifting economic conditions and the growing influence of new global players. As the landscape becomes increasingly volatile, the pressure is on to deliver short-term efficiency while building long-term resilience.
Managing the transition to electric vehicles (EV) and containing costs are two of the biggest challenges facing the mobility industry. For many mobility companies in Europe those challenges are closely entwined. High EV transition costs are weakening their ability to invest in solutions that could strengthen the mobility industry and improve their profitability.
The dial-back of EU subsidies and incentives, weak economic growth and hesitancy among potential buyers have stalled EV sales in Europe. While rising vehicle production and financing costs coupled with increasing regulatory demands are squeezing profitability.
Pricing volatility for new EVs has put further strain on leasing companies, used vehicle suppliers and finance providers. Price cuts on new EVs are undermining the residual value of used EVs, forcing many owners of those assets to absorb substantial write-offs. Geopolitical uncertainty, the global ambitions of Chinese vehicle manufacturers, and rapid advances in technology are putting additional pressure onto European mobility firms.
Leaders from the mobility industry in Europe addressed the major challenges facing the sector and identified potential solutions at an online event hosted by Qorus and consulting firm CVA. The event marked the release of the Qorus-CVA 2025/26 Mobility Report which analyzes several major industry transitions. It includes insights from companies such as BYD, Allianz Partners, BMW Financial Services, BNP Paribas, and Société Générale.
Leading discussions at the online event were representatives from CVA, CaixaBank, Crédit Agricole (CA), and Lloyds Banking Group. The growing influence of EVs and the critical need to contain costs were recurring themes. Nearly two thirds of the executives polled at the event reported that developing EV business models was one of their top three challenges. Almost half of the executives ranked reducing costs a top-three priority.
The event focused on four factors forcing transformation in the mobility industry.
- Managing EV transitions through multicycle strategies
- Building partnerships across mobility ecosystems
- Responding to Chinese OEM expansion
- Leveraging AI and digital transformation
Managing EV transitions through multicycle strategies
The transition to EVs is forcing structural changes to the mobility industry and opening the way for firms to adopt multicycle strategies that deploy a vehicle with a variety of users and different applications over its lifespan.
However, multicycle strategies remain very challenging for the industry to implement despite their theoretical appeal, says Amelia Bradley, associate partner at CVA. EV prices are still higher than traditional internal combustion engine (ICE) vehicles, demand for EVs among retail customers is waning, and leasing companies with EVs on their books have had to carry big write-offs.
Further changes in EU emissions regulations are also adding complexity to potential multicycle strategies with stricter targets for fleet operators introduced this year.
The EV market in the UK is strongly influenced by government tax incentives, says Ashley Barnett, senior manager at Lloyds Banking Group. EV sales are affected by four different taxes. While incentives, such as salary sacrifice schemes, have encouraged corporate sales, little has been done to promote the retail market. Furthermore, government grants designed to boost the sale of new EVs can inadvertently undermine used vehicle sales, says Barnett.
"If I'm a used car dealer and I've got an electric vehicle that was 12 months old that I've just brought onto the forecourt and then the manufacturer of that car drops the price by 10% to become eligible for a government grant, the price of my asset on the forecourt drops by 10% as well."
Despite these challenges, CVA's Bradley identifies several approaches mobility companies can explore to address difficult conditions in the EV market.
- Focus on multicycle remarketing to manage residual value losses more efficiently.
- Optimize used car value chains by treating EVs as strategic assets rather than disposal problems.
- Develop structural business models that position EVs as affordable standalone solutions.
- Use battery health data and certification to stabilize used EV valuations.
- Collaborate across industry sectors to share risks and capabilities.
- Explore partnerships with non-traditional mobility players to expand market reach.
Building partnerships across mobility ecosystems
Partnerships enable mobility companies to adjust to the changes sweeping the industry and capitalize on new revenue opportunities. The biggest value will come from partnerships that cross traditional silos and span logistics, marketing, sales, and services, says Bradley.
“There are a lot of value pools, for example, at the far end of downstream services. Players need to take these partnership opportunities partially to optimize costs, partially to improve positioning and also to tap into new value pools.”
Bradley points out that major vehicle manufacturers such as Mercedes-Benz, Stellantis and Volkswagen are working with insurance providers to integrate cover into their sales offerings.
Cross-sector partnerships are a departure from traditional automotive links that have tended to focus on single functions such as financing arrangements between banks and vehicle suppliers. They stretch across mobility ecosystems.
Spain’s CaixaBank, for example, is expanding its long-standing partnership with international mobility services provider, Arval. The bank began working with Arval in 2010 to provide its clients with traditional full-service leasing. It has since extended its offerings to include flexible leasing and used vehicle leasing. Last year it ventured into multicycle mobility solutions with Arval.
CaixaBank has also teamed up with a range of car dealerships to build an online portal that combines vehicle sales and financing. Launched early in 2025, the Facilitea Coches portal has already facilitated the sale of more than 10,000 vehicles and enabled the bank to provide €170 million in financing.
Key to CaixaBank’s mobility strategy is focus, notes Alejandro Vila-Trias, director for business development at the bank.
“We are a bank with clients and that’s where we want to be. The rest of our activities we develop through partnerships. We don’t want asset risk and we don’t want operational risk.”
To succeed with cross-sector partnerships, Bradley recommends mobility companies focus on several key capabilities:
- Cost control.
- Flexibility and real-time management.
- End-to-end customer journeys.
- Seamless customer experience.
- Advanced service integration.
Geopolitics and Chinese OEMs
Chinese vehicle manufacturers (OEMs) have collaborated across their domestic mobility ecosystem and are now capitalizing on their product quality and low production costs to push into international markets.
With the EU steering Europe towards a transition to EVs, Chinese OEMs, world leaders in the production of such vehicles, pose a major challenge to European suppliers.
“The success story of China is amazing. Chinese OEMs now account for 58% of global BEV (battery electric vehicles). And that’s growing,” says Markus Collet, partner and head of the automobility platform at CVA. He adds that the quality of Chinese EVs has improved dramatically in recent years, with substantial advances in software defined powertrains and automated driving systems, and their pricing is highly competitive.
“The very center of the automotive industry has moved to China. Most of the innovation in artificial intelligence, human-machine interfaces, and autonomous driving is now coming from China,” adds Vincent Carre, Deputy CEO of the Automotive and Mobility Group at Crédit Agricole (CA).
Carre, who also heads CA’s Mobility Services and Insurance, warns that European manufacturers need to respond quickly to rising competition from Chinese OEMs.
Two potential obstacles currently face Chinese OEMs looking to expand their presence in European vehicle markets.
- EU regulations that protect domestic industries.
- Lack downstream service and support networks.
Carre points out that Chinese suppliers have already begun to accommodate EU restrictions by opening manufacturing plants in Europe. BYD, Chery, and Leapmotor, for example, have begun setting up European factories. Tighter restrictions on the sale of Chinese vehicles in Europe appear unlikely as they could jeopardize the export of luxury European cars to China.
However, the lack of downstream infrastructure, to sell, service, finance and support vehicles in Europe, remains a significant barrier to Chinese OEMs’ ambitions in Europe.
"China is really behind in terms of financing, insurance and services. It's just starting there. That is probably why Chinese OEMs have such difficulties understanding the European market. They struggle with the whole chain between selling the cars, repurchasing, leasing and managing residual value," says Vincent.
He advises companies across the mobility value chain in Europe to quickly prepare for greater competition from their Chinese counterparts. Potential defensive steps include:
- Accelerating technology development.
- Protecting dealer networks.
- Learning from Chinese AI advances.
- Exploring partnership opportunities.
Leveraging AI and digital transformation
Mobility companies operating downstream in the automotive sector are ideally placed to capitalize on recent advances in AI, says CVA’s Collet.
“AI absolutely makes sense downstream in the automotive business because companies through digitization are generating more and more data and increasing their capacity to process that data.”
Potential AI applications include lead generation, customer interaction, contract management, service management, dynamic asset allocation, collections, end-of-term management and remarketing.
He points out that more than 50% of automotive dealerships in the US and Canada are already using GenAI or planning to use it this year. And half of the GenAI users reported revenue improvements of more than 20%.
One of the biggest challenges encountered by organizations adopting AI is scaling the technology, adds Collet. A recent study by the Massachusetts Institute of Technology (MIT), for example, found a huge discrepancy between piloted AI projects and those successfully deployed at scale. The divergence was especially large among embedded and task-specific applications.
“Most players have done something with AI but despite substantial investments the business impact is still quite limited. But the capability to implement AI successfully is going to determine business performance in future.”
Collet advises mobility companies to quickly scale up AI applications and bridge the gap between pilot projects and productive implementations. He adds that employees who are “bilingual in business and AI” are critical.
“They not only make technology work but also generate business benefits.”
Companies in Europe's mobility industry are facing major challenges on several fronts. To survive they must adopt strategies that address multiple interconnected threats. They need coordinated responses to navigate the EV transition, adapt to rising Chinese OEM presence in domestic markets, and harness essential digital tools such as AI. Their success will depend on how quickly they develop new business models, secure cross-industry partnerships, and scale up critical technology applications.
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