STAMFORD, Connecticut: The global automotive industry is poised for a shake-up in 2025, with several factories in Europe and North America at risk of closure or sale due to overcapacity and mounting competition, according to a new report from Gartner.

Automakers are grappling with evolving market demands, emissions regulations, and the growing dominance of Chinese electric vehicle (EV) manufacturers.

Pedro Pacheco, Gartner's VP Analyst, highlighted the mounting challenges faced by legacy carmakers in high-cost regions. "This is a little bit like a pressure cooker," he explained. "The pressure increases, increases and... that will push the number of automakers to take more pragmatic decisions."

Gartner predicts that closures or sales are more likely in countries with higher operating costs, where automakers are under pressure to remain competitive. Chinese brands, in particular, are expected to capitalize on this trend, potentially acquiring plants to circumvent trade barriers or establishing new facilities in lower-cost regions such as Morocco or Turkey.

The report comes as European automakers brace for stricter EU CO2 emissions rules in 2025. Stefan Hartung, CEO of German auto supplier Bosch, called for leniency from the EU, urging the bloc to refrain from penalizing companies that fail to meet the stringent targets.

"The risk is that we end up reducing combustion engine vehicle sales to artificially beef up EV sales," warned Luc Chatel, chairman of the French car lobby PFA, who expressed concerns about the industry's ability to meet its 2030 and 2035 electrification goals.

Despite these hurdles, Gartner projects a 17 percent growth in global EV shipments across various categories, including buses, cars, vans, and heavy trucks, in 2025. It also forecasts that more than half of all vehicle models marketed by automakers will be EVs by 2030.

To stay competitive, legacy automakers may explore partnerships with tech firms, invest in software architecture from newer EV companies, and enhance research and development initiatives in tech hubs. Pacheco suggested that self-funded EV joint ventures could play a critical role in the industry's transformation.