EU battery-electric vehicle market outlook ‘likely to worsen’ in 2025

A lower battery-electric vehicle market share in 2025 is likely to make it much more difficult for the EU to meet its carbon emission targets as increasing the BEV market share and sales is one of the key ways car makers were planning to meet those goals.

The outlook for the battery-electric vehicle (BEV) in the EU is continuing to worsen, according to new data from S&P Global. It estimates that the share of the battery-electric vehicle in 2025 is likely to be 21%. This is a significant downward revision from S&P Global’s forecast in the first half of 2024, which was 27%.  This revision is mainly because of changing market conditions, as demand for electric vehicles suffers globally.

A lower battery-electric vehicle market share in 2025 is also likely to make it much more difficult for the EU’s 2025 carbon emission targets to be met. This is because increasing the BEV market share and sales is one of the key ways in which vehicle manufacturers have been planning to meet these targets.

Other ways include higher-emissions manufacturers partnering with lower-emissions ones, as well as changing sales strategies to put the spotlight on more efficient vehicle models. Mild-hybrid technology, which involves using a small battery-powered electric motor to help a traditional diesel or petrol engine, could also contribute in meeting these targets.

Martin Kupka, the Czech transport minister, said in a statement on the ACEA website: “Without a targeted automotive industrial action plan, we risk falling behind the US and China.

“The reality check shows that the EU needs to have a more flexible system in place for auto manufacturers to reach the ambitious CO2 reduction targets. We should ensure the industry uses profits to invest into new solutions instead of paying penalties.”

Sigrid de Vries, the director general of ACEA, also said in the press release: “The looming crisis necessitates urgent action. All indicators point to a stagnating EU electric vehicle market, at a time when acceleration is needed. Apart from the disproportionate compliance costs for EU manufacturers in 2025, the success of the entire road transport decarbonisation policy is at risk.

“We appreciate that several European Commissioners have emphasised regulatory predictability and stability in their confirmation hearings, but stability can’t be a goal in itself. Manufacturers have invested heavily and will continue doing so. Europe must stay on course of the green transformation by adopting a strategy that works.”

Higher EU tariffs on Chinese electric vehicles (EVs) likely to further dampen BEV market

The EU has recently imposed higher import tariffs on Chinese electric vehicle makers such as Geely, BYD and SAIC. This decision came amid increased allegations of the Chinese government heavily subsidising these companies, thus allowing them to sell their models at significantly reduced prices in the EU.

This in turn, has considerably undercut other European automakers such as Volkswagen, Audi, Mercedes-Benz and BMW.  The EU has now imposed a tariff of 18.8% on Geely, 17% on BYD and 35.3% on SAIC.

However, with the implementation of these tariffs, these electric vehicles are likely to become quite a bit more expensive, thus discouraging sales, especially as buyers still struggle with the cost of living crisis across Europe. This in turn, is likely to make it even more difficult to achieve carbon emission goals, both in 2025 and further ahead in 2030.

source: euronews.com