In Germany for example, there are currently 1.4 million EVs on the country’s roads. But the government target is 15 million by 2030 – a figure which feels increasingly out of reach.
The appetite for electrification seems to have faltered in Europe in recent years, in some countries more than others. But what’s the reality, and is there a way forward?
We’re in a time of transformation for mobility, driven by technology, the environment and changing social attitudes. The last decade has seen a shift towards electrification, as the answer to CO2 and other greenhouse gas emissions. However, what was predicted to be a rapid transition now seems to be stalling, particularly in Europe, with a marked deceleration of EV sales compared to previous years in several countries.
Where are EVs in the charge for change?
In mid-2024, around 21% of all new vehicles being sold in Europe were EVs. However, the rate of increase is slowing, with just 4% growth in almost three years*. Which means that, overall, sales have fallen short of expected forecasts.
*https://www.iea.org/reports/global-ev-outlook-2024/trends-in-electric-cars
1.4 million EVs
Partly to blame is the fact that in many countries, subsidies for EVs have been reduced or cancelled, resulting in a noticeable drop in sales. But there are other important factors at play.
According to Statista (2024), between January and May 2024, new electric car (BEV) registrations in Europe showed varying levels of growth compared with the same period last year, with declines in Germany (-16%) and Sweden (-21%), while the UK and the Netherlands saw growth of 10%, France 23%, and Belgium 47%, resulting in an overall 2% increase across the EU.
Consumers need more reassurance
Beyond wavering government support, consumer confidence also lies at the heart of EV market stagnation. Yes, everyone wants to be part of a sustainable solution for mobility. But is electric the long-term answer? Are we backing the right horse? And can EVs meet our practical day-to-day needs?
There’s little doubt that cost is a major concern. While the headline price difference between EV and ICE equivalents is narrowing, that’s not the whole story. As EV technology continues to advance with each new model, buyers fear that they risk steep depreciation, and a severe hit on the residual value of their vehicle. The removal of subsidies doesn’t help the equation. And even running costs, until now an EV strong point, are under scrutiny with mileage taxes now appearing on the radar.
‘Range anxiety’ is another fundamental issue. Interestingly though, our own research suggests that most current EV owners consider their cars to have adequate range for daily journeys. Charging availability is the bigger concern for this group. Range anxiety appears to in fact be a misconception that prevents non-EV drivers from making the switch. Even so, it’s a myth in need of debunking.
There’s also a degree of scepticism about manufacturers’ published data for battery range, as well as the negative impact of adverse environmental conditions. Non-EV owners remain unconvinced that EVs are a credible option for anything beyond city driving.
Insufficient charging stations are often cited as a problem. And whereas petrol and diesel refuelling are known quantities, consumers are much more nervous about electric charging stations. They worry that even if found, they may be out of order, busy, or only deliver slower charging – all of which feeds a perception of unreliability and unpredictable journey times.
The final factor is the diminishing sustainability appeal of EVs. Many potential buyers are becoming aware of the environmental impact of raw material extraction, and the build-up of hazardous EV battery waste. Suddenly, in the public mind EVs don’t seem quite as green as they have been marketed. And for more eco-ambivalent buyers, there is the emergence of hydrogen-fuelled vehicles as a potential option for the longer-term future. Some, contemplating a greener switch, are gambling that with the EV market slowing, the wise decision is to continue with petrol for another vehicle purchase cycle, and see in 2030 or so whether a viable alternative to electric, like hydrogen, has materialized.
Industry and governments have contributed to the problem
Confidence in the future of the EV is not restricted to consumers. Some of the major OEMs, are also showing mounting hesitancy. Volvo are rowing back on their commitment to sell only electric cars by 2030.
Hesitancy among manufacturers is party explained by actions and policies at government level. OEMs see the weakening of EV subsidies as a sign that governments are not 100% behind the transition. Meanwhile the EU recently raised tariffs on Chinese EVs in a protectionist move to stem the potential tide of lower priced imports. According to IfW calculations (Handelsblatt 2024), EU tariffs of around 31 percent on average on the three major Chinese OEMs will lead to a decline in electric car imports from China of around 25 percent.
And in many countries, for example Spain, Italy and the UK, investment in new and improved EV infrastructures has been patchy. Vital expansion programs for charging points have been slow in arriving. Many major energy providers have been similarly slow to get behind the EV project, although new players from other industries (e.g. Tesla, Ionity) along with a few energy giants (Total, Shell, BP) have begun to build up networks.
The same is true for regulators whose task it is to set universal standards for OEMS, infrastructure providers and even housebuilders. Each EU member country has to implement these as directives into national law – this can take years and lead to country-specific differences in implementation. Due to the number and diversity of nations within Europe, it is perceived that no single voice is taking charge.
This reduction in industry-wide confidence can be simply summarized: the industry has the ambition to make it happen, but are running on multi-year programs, and political opinion is changing much faster, which makes it difficult for OEMs to react. What is missing is a coordinated, shared sense of where the EV ecosystem intends to be in the medium and long term.
The one-size-won’t-fit-all problem
Car makers, governments, utilities/grid operators and charging providers need to be on the same page. But the goal of a continent-wide approach is hampered by a further problem.
There are strong disparities in the usage and demands of private mobility in urban and rural settings. Those living in cities have greater opportunities to adopt new modes of transport, as part of more integrated and highly developed transport infrastructures. In addition, network improvements are more economically viable in densely populated areas. On the flipside, space for wall-mounted chargers is limited in cities, whereas there is ample room in the countryside. Even with subsidies, connecting the countryside and facilitating private EV ownership is expensive, and brings less demonstrable ROI. For less urbanized countries and regions, it’s a major hurdle.
Even within cities though, increasing EV adoption isn’t straightforward. For example, built-up areas have apartment buildings that can be home to up to 100 families or more. Currently, these types of dwellings have little or no allocation of private charging points, with only 7% in Germany (ADAC 2024) typically offering them.
Different countries face unique challenges, and have correspondingly different approaches to tackling them. Some, such as the Netherlands, are taking a smart approach with huge investments in infrastructure and a more gradual reduction in subsidies. Others, particularly Spain and Italy, are currently demonstrating less commitment, partly due to higher energy prices and also limited available funds for investment.
The Ukraine conflict: a mixed impact
War in Ukraine has had an impact on the evolution of mobility across Europe. Some anticipated that it would hasten the transition, but in fact it has put pressure on energy prices, which in turn has created a negative impact on electric mobility.
Dr Robert Habeck, the German Federal Minister for Economic Affairs and Climate Action, stated at the Süddeutsche Zeitung Sustainability Summit in June 2024 that Germany’s progress towards electrification lost two years due to rising energy prices stemming from their dependency on Russian gas. This was because Germany had to prioritize other issues such as security of energy supply.What does the future hold?
What does the future hold?
The electric transition has not halted entirely, but has been severely hampered by numerous factors.
The picture that emerges is one of a fragmented, inconsistent, and decentralized approach: more equivocation than electrification. From a sustainability perspective, a successful EV revolution is the clearest route towards Europe achieving its carbon reduction goals for the transport sector. But the orchestrated policies and investment required have so far been lacking.
Substantial change is needed to rebuild confidence and momentum for both consumers and the industry. We’ll highlight what’s needed in the next article in this series.
