VAT is a tax paid by the consumer, not the manufacturer. It's collected at the point of sale by the retailer and passed on by them to the local tax authority.
VAT is physically paid by businesses in EU.
At the end of the day it's a tax on final business to customer transaction (like sale tax). It's levied on a transaction. Saying one party pays it but the other doesn't is meaningless. It's added to the transaction and then collected by the business and transferred to government.
You are correct in essence but that is not exactly how it works.
VAT is paid on the gross margin on each transaction. It only looks like the end user is the only one to pay because for that transaction the gross margin is the whole of the price. Car makers are to a large extent assemblers of ready made parts so some, admittedly small, VAT is certainly paid at various points in the supply chain.
