The electric vehicle market in the European Union (EU) is witnessing a worrying trend of shrinking market share, raising concerns among industry leaders and policymakers.
The European Automobile Manufacturers’ Association (ACEA) has called for urgent intervention from the EU to support the electric vehicle market as the industry prepares for new CO2 emission targets for cars and vans set to take effect in 2025.
Urgent review of CO2 regulations needed
ACEA is urging the European Commission to accelerate the review of CO2 regulations for light- and heavy-duty vehicles, currently scheduled for 2026 and 2027, respectively.
The industry body argues that these reviews must happen by 2025 to address the challenges facing the zero-emission transition.
The European auto sector has invested billions into electrification and supports both the Paris Agreement and the EU’s 2050 decarbonisation goals.
However, manufacturers are facing obstacles that go beyond vehicle technology, such as the availability of charging and hydrogen refuelling infrastructure, access to raw materials, and affordable green energy.
These challenges, combined with a declining competitive edge in the global market, are threatening the success of the EV market.
Falling electric vehicle market share
The latest data from ACEA confirms a steady decline in electric vehicle registrations across the EU, reflecting a broader slowdown in the adoption of zero-emission vehicles.
Despite the technological readiness of electric vehicles, a lack of consumer trust in infrastructure, insufficient purchase incentives, and slow economic growth are hampering the growth of the electric vehicle market.
These conditions make it increasingly difficult for the industry to meet the 2025 CO2 targets. Year-to-date EU battery-electric market share has dipped from 13.9% in 2023 to 12.6% this year.
Moreover, only 16% of non-EV motorists say they plan on purchasing an EV for their next vehicle – down from 18% in 2021, with around 20% of EV owners saying they will likely switch back to combustion engine vehicles.
A major reason for this is due to infrastructure challenges, with the EU requiring eight times more charging points per year by 2030 to meet CO2 targets.
Economic impact and competitive pressures
The European auto industry faces the risk of either significant fines or production cuts if the downward trend continues. Such penalties could divert crucial resources away from the zero-emission transition.
ACEA stresses that earlier reviews and strategic actions are essential to safeguard Europe’s industrial future, boost competitiveness, and reduce dependency on non-European resources.
Industry leaders are calling for swift action to reverse the market decline and ensure the EU’s electric vehicle market remains globally competitive.
