Protectionism and the Policy-Driven Restructuring of Automotive Value Chains in the Global EV Transition

Résumé:

The transition toward electric mobility is a key step in moving the automotive industry toward more sustainable and circular production systems. However, while technological innovation is often presented as the primary driver of this transition, the restructuring of the industry is increasingly shaped by trade policy, industrial strategy, and geopolitical competition among major economies. Recent rapid expansion of Chinese electric vehicle and battery exports, the adoption of new tariffs and industrial subsidies in the United States and the European Union illustrate a process of policy-driven restructuring of global automotive value chains.
Rather than relying on multilateral trade governance, governments are increasingly deploying industrial policy instruments such as tariffs, subsidies, local content requirements, and bilateral trade agreements to secure technological leadership and supply chain resilience in EV and battery industries. As a result, competing regional industrial ecosystems are emerging in which trade policy and industrial strategy are reshaping global automotive value chains. These policy interventions not only influence technological competition but also the industrial structures through which more sustainable and potentially circular automotive production systems may develop.
The paper explores how these trade and industrial policy measures interact across four major automotive economies: the United States, the European Union, China, and India. It also explores how emerging bilateral and regional trade agreements are reorganizing automotive supply chains and market access. it asks how are emerging forms of trade protectionism and green industrial policy reshaping global automotive value chains in the transition to electric mobility, and what do these policy shifts reveal about the geopolitical reorganization of production, competition, and trade in the EV era? This paper contributes to the Global Value Chain literature by showing how climate and industrial policy instruments are restructuring automotive value chains through new forms of policy-driven industrial coordination.
The analysis focuses on three interrelated policy domains shaping the restructuring of automotive value chains:
1. Trade policy and protectionist measures
This includes tariffs, anti-subsidy investigations, local content requirements, and investment screening mechanisms that influence market access and supply chain organization.
2. Green industrial policy
Policies promoting electric vehicle production and adoption, including subsidies, tax incentives, battery manufacturing strategies, and domestic supply chain development, are examined as key drivers of industrial restructuring.
3. Bilateral and regional trade agreements
The study also considers the role of emerging bilateral and regional trade agreements in reshaping automotive trade and investment patterns. Agreements currently under negotiation, such as the EU–India trade agreement and other strategic partnerships among major economies, are increasingly influencing regulatory alignment, market access, and investment flows in the EV and battery sectors. These agreements represent an important institutional mechanism through which states seek to reorganize global automotive value chains in response to shifting geopolitical and technological dynamics.
The research relies on comparative policy mapping and regulatory benchmarking, drawing on policy documents, trade measures, industrial policy initiatives, and industry reports. This approach enables the identification of distinct policy configurations and their implications for the evolving structure of global automotive value chains.