Regional capabilities in the European automotive industry: Relatedness, complexity and lock-ins in the transition to electric vehicles

The shift toward battery electric vehicles (EVs) represents the most profound disruption in the automotive industry in over a century, with far-reaching consequences for European automotive regions. For decades, incremental improvements in internal combustion engine (ICE) technologies have served as the dominant decarbonization pathway, and many regions have built strong innovation systems around these legacy technologies. To assess how European NUTS2 regions are positioned for the transition to electric mobility, we analyze regional technological capabilities using technology-specific relatedness and knowledge complexity to investigate how EV- and ICE-related capabilities affect regional EV innovation. Using patent data from the OECD REGPAT database, we map regional innovation potentials and estimate econometric models to assess how these capability structures affect EV patenting. We find that higher relatedness density to EV technologies is positively associated with EV patenting, while relatedness to ICE improvements also shows a significant but weaker positive association, indicating that ICE capabilities do not necessarily impede EV innovation. However, when ICE-related capabilities substantially outweigh EV-related ones, we observe a negative effect on EV patenting, pointing to emerging lock-in risks. This effect is markedly stronger in low-complexity regions. Interregional co-patenting analysis shows that regions with low complexity and low EV-relatedness are doubly disadvantaged, as they are weakly positioned internally and less integrated into innovation networks. Focusing on four regions of this type, we illustrate how targeted partnerships could unlock untapped potentials. The results inform a policy discussion highlighting the need for place-sensitive innovation strategies addressing both emerging and legacy capability structures.