Central Europe-East Asia EV nexus : Tracking Chinese, South Korean and Japanese electric vehicle and battery investment in the V4 countries

Abstract

A confluence of factors is challenging the industrial structure and the long-standing business model of four Central and Eastern European (CEE) countries: Czechia, Hungary, Poland, and Slovakia—collectively known as the Visegrad Four (V4). Since their transformation from command economies to free markets in the early 1990s, the automotive industry has been a backbone of their manufacturing sectors and, by extension, their economies. Two major trends emerging in the 2020s now pose considerable challenges to the V4’s established automotive sectors: the rise of EVs and the increase in geopolitical tensions and protectionism. East Asian EV and battery producers have surpassed their European counterparts in terms of production processes and technological expertise. At the same time, geopolitical tensions, such as tariffs, transportation risks, and military conflicts, have disrupted free trade and reshaped the export pathways of the automotive industry. The consequences of these shifts are both disruptive and potentially advantageous for the V4 region. On the one hand, they undermine the position of the established automotive producers. On the other hand, they facilitate the inflow of billions of euros in East Asian greenfield and brownfield investments into the region. This paper aims to provide a comprehensive understanding of these developments by examining them in four interlinked steps that combine empirical examination with policy-oriented analysis.