Comment by Joanna Podkowa, Head of Strategic Suppliers at ElectroMobility Poland, on the evolving architecture of the automotive market.

The inspiration for this piece came from a conversation hosted by Karol Tokarczyk. In the “Na prąd” podcast, Joanna and Jakub Jakóbowski from the Centre for Eastern Studies (OSW) discuss what is happening in the automotive market and what it means for Poland. Their perspectives connect the broader geopolitical and economic picture with the “down-to-earth” reality of what can be built in Poland — and how to approach it pragmatically and with long-term national interest in mind.

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The New Value Architecture in the Automotive Industry

How margins are shifting — and where Poland stands in this new configuration

The transformation of the automotive industry is dismantling decades-old structures that have shaped the market. Competitiveness and profits no longer stem from simply increasing production volumes. Today, real influence and value are created by controlling the key elements of the supply chain. Supply chains are becoming the new architecture of margin allocation and the source of control over technology and intellectual property. Poland remains strong in manufacturing, yet weak in generating high value added because the decisive functions and core competencies are located abroad. This tension is becoming increasingly visible in the debate about the future of the sector — including the role of the ElectroMobility Poland project.

A sector undergoing deep reconstruction

The industry is experiencing simultaneous waves of electrification, digitalisation, rising importance of batteries and software, geopolitical turbulence, and shifting power dynamics across global value chains. Together, these trends erode Europe’s traditional advantages built on internal combustion engines and extensive, fragmented supply networks. It is becoming clear that a supply chain is no longer merely logistics — it is a deliberately engineered value architecture designed to maximise margins and used as an economic, political, and increasingly military instrument.

Managing supply chains — by both states and multinational corporations — has become a tool of influence. It applies pressure on suppliers, governments, and entire economic systems by determining who earns profits, who owns IP, who makes strategic decisions, and who controls critical technologies.

In this logic, ElectroMobility Poland (EMP) — a production-and-development hub for next-generation vehicles — becomes an instrument enabling Poland to climb up the value chain. By combining OEM-level decision-making, R&D capabilities and supplier-ecosystem development in one project, EMP gradually shifts Poland’s position from an executor to a co-creator of technology.

The supply chain as a value architecture: whoever designs the chain, designs the margin split

Today’s value chains are multilayered ecosystems of technologies and competencies — from R&D and design, through electronics, software, advanced modules, all the way to systems integration. In complex sectors such as EVs, batteries or semiconductors, advantage belongs to those who control the upper layers: R&D, electronics, software and system integration. Mere presence in the supply chain is no longer enough; owning its strategic assets is what creates value.

Why position in the value chain determines technological sovereignty

In the era of global competition, advanced economies no longer compete through labour costs. They compete through control of chokepoints, proprietary technologies, strategic module localisation and the ability to reconfigure supply chains quickly.

For years, Europe assumed the “invisible hand” of the market would naturally create resilient and competitive supply chains. Reality shows otherwise. In sectors critical to electromobility, the true contest is over control of value added.

Analyses illustrate this well. According to McKinsey, the value added retained in Europe in the development and production of a BEV amounts to approximately 70–75% of the vehicle’s sales price. For ICE vehicles, this was 85–90%. But for non-European OEMs that design BEVs in home-market R&D centres (e.g., Korea or Japan) and manufacture them in Europe, European value capture drops to 50–60%. For fully imported BEVs, it is only ~20%.
European EV sales: A new economic potential | McKinsey.

This is why the localisation of production and technology is fundamental for economic resilience and growth — and why the debate about supply chains is, in essence, a debate about technological sovereignty for both individual states and the continent as a whole.

Poland’s automotive sector: strong in production, weak in value capture

Poland remains one of Europe’s largest suppliers of automotive parts. However, this activity is concentrated in the lower layers of the value chain — production and assembly. The highest-value competencies — R&D, design, IP creation, systems integration — largely remain abroad.

According to the Polish Economic Institute, the automotive sector generates approx. 1.4% of Poland’s gross value added, while 75% of revenues in 2024 were generated by entities established by foreign capital. This reflects a structural dependency on decisions made in OEM headquarters outside Poland.

We already see the risks: falling demand in Europe, the powertrain transition and growing cost pressure expose the fragility of the “low-cost manufacturing” model. Without progressing into higher-value activities, Poland will remain a subcontractor in someone else’s strategy. Experts note that Poland’s historical growth model is reaching its limits; without a strong investment impulse — in innovation and modern industrial infrastructure — sustaining high growth rates will be increasingly difficult.

Poland at a developmental crossroads. What role can EMP play?

Poland faces a fundamental question: how much value added stays in the country?
The model based on low labour costs is exhausted. Wages rise, the labour pool shrinks, and technological competition requires competencies in software, power electronics, batteries, and systems integration.

This is why EMP — by building durable technological capabilities, decision-making centres and local supply chains — is viewed as an instrument of industrial policy. The new EMP strategy as an NEV production-and-development hub in a joint-venture model with an industry partner directly serves this purpose. It means:

• locating the decision-making centre in Poland,

• gradual technology transfer,

• building R&D capabilities,

• developing local suppliers,

• enabling Polish engineers to work on design and system integration,

• building an ecosystem of technology companies, not merely production facilities.

This is a “level-up” unavailable in any other sectoral initiative. Experience from early EMP phases and from grant-based projects shows clearly that without industry standards, networks, scale and coordinated state-level strategy, the so-called “Polish engineering thought” will remain a wishful slogan — not a competitive reality.

Batteries and digital systems of intelligent vehicles: a new map of risks and opportunities

Europe assumed it would dominate NMC chemistry. The market corrected this assumption: LFP — where China leads — became the preferred mass-market technology. Upcoming EU regulations (battery passport, carbon footprint) will force localisation of battery and component production near manufacturing hubs.

At the same time, Europe is witnessing waves of investment announcements, rising risk of unfinished projects and intense competition for viable locations, technology and scale. In response, EU economies — France, Germany, Spain, but also smaller countries like Sweden or Hungary — are building battery and digital hubs, leveraging EU mechanisms (IPCEI, Innovation Fund, RRF/RRF) to secure technologies and position their firms higher in the value chain.

Another critical area is cybersecurity for intelligent vehicles. Europe, including Poland, lacks a comprehensive regulatory framework governing these systems. It is clear that such technologies generate new risks related to cybersecurity and the transfer of sensitive data. Introducing regulations — such as requirements for local data storage or domestic IT solutions — may also become effective industrial-policy tools, forcing advanced services and value creation to localise within Poland.

Poland’s experience in building advanced security solutions for the domestic banking sector can translate into intelligent-vehicle systems deployed across the EU. If Poland does not enter digital architecture, system integration, BMS, power electronics and advanced components, it will be left only with low-margin manufacturing.

Opportunities for Poland: moving from “production” to “value”

Poland has a unique set of strengths: skilled engineers, a powerful IT/software sector, strong production quality culture, experience in EV components and batteries, and a growing domestic market. Yet without industrial-policy tools and anchor projects that retain competencies, these advantages will not convert into sustainable value creation.

The direction is clear: batteries → power electronics → software → integration → data.
This is where margins reside. This is where IP is created. This is where the competencies shaping the future of industry are formed.

EMP — as a production-and-development hub — is designed to be the vehicle of this advancement. It requires deliberate implementation, coordination and strategic influence at the EU level.

Will Poland benefit from the revolution — or become its casualty?

Electromobility is not a “change of engine.” It is an industrial revolution reshaping business models, supply chains and value architectures. The effects of today’s decisions will define our economy for decades.

Poland can either remain a low-margin manufacturing node whose importance gradually declines — or build a next-generation industry with technology, IP and decision-making located domestically.

The stakes are not a single factory.
The stake is economic agency — whether Poland co-creates future technologies or merely executes someone else’s plans.

The EMP project is one of the few real tools capable of shifting that trajectory. In the race for high positions in modern value chains, the winners will be those states that move beyond isolated investment projects and instead build coherent industrial policies, complete technological ecosystems, and long-term strategic capacity.