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T&E Study: Carmakers in Europe Are Failing To Deliver Affordable Electric Cars, Holding back EV Adoption

Electric Volkswagen charging at Partking Lot in Gothenburg

Just 17% of electric cars sold in Europe are compact vehicles in the cheaper B segment, compared to 37% of new combustion engines, a new analysis by environmental NGO Transport & Environment (T&E) finds. Only 40 fully electric models were launched in the compact segments (A and B) between 2018 and 2023 compared to 66 large and luxury models (D and E), according to a new T&E report.

European carmakers prioritise sales of larger, more expensive EVs

In Europe 28% of electric sales are in the large car D segment, compared to just 13% of new combustion cars, according to T&E’s analysis of 2023 sales figures from Dataforce. The average price of a battery electric car in Europe has increased by 39% (+€18,000) since 2015 while in China it has fallen by 53%. This is due to European manufacturers’ disproportionate focus on large cars and SUVs, which carry a price premium.

European carmakers are holding back the mass market adoption of EVs by not bringing affordable models to consumers faster and at volume. The disproportionate focus of manufacturers on large SUVs and premium models means we have too few mass-market cars and too high prices.

—Anna Krajinska, vehicle emissions manager at T&E

Of the sub-€25,000 models carmakers have planned, only 42,000 vehicles are likely to be produced for the European market this year, according to T&E analysis of production data from GlobalData. But despite the lack of affordable models, the EU market share of battery electric cars still grew by 2.5 percentage points to 14.6% in 2023.

However, EU BEV market share could already be at 22% if the corporate car segment, which accounts for most new car sales, were leading on electrification, the T&E analysis also finds. Currently, with an electric uptake of 14%, the corporate sector is lagging behind the private market (15%).

Taxation plays an important role in incentivizing electric car uptake, but in countries such as Germany, carmakers have opposed the reform of company car taxes that would increase the tax burden on gasoline and diesel cars. Setting binding electrification targets for corporate fleets will also be key to accelerating electrification in Europe. T&E is calling on the EU to set targets for fleets to be 100% electric by 2030 at the very latest. The EU Commission has opened a public consultation on greening company cars.

Source from Green Car Congress

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