I‘m sure it’s not as simple, but my first take on this was: Europe doesn’t invest in EVs, but China does. They start to loose the Chinese market and are about to loose their own market to China as well. Then politics steps in to “rescue” their own companies but all that does is shelter them from the pressure to adapt and evolve, and in the end they’re beyond hope and left in the dust while the advanced Chinese cars dominate everything.

Countering subsidies with import taxes is a different story ofc. But it certainly feels like the European car industry is in decline and it’s mostly their own fault.