Europe’s EV Sales Targets Face Challenges

European governments have mandated that all new sedan and SUV sales must be electric by 2035, aiming for 80% by 2030. However, achieving these goals seems uncertain.

A mass market for affordable EVs is essential, but European manufacturers are hesitant to produce budget-friendly models. Low-cost EVs like China’s Wuling Bingo and BYD Seagull, priced around €10,000 ($10,900), are currently not being made by European companies. Meanwhile, the EU plans to limit China’s EV imports.

Forecasts for EV sales by 2030 vary significantly, with estimates ranging from 40% to 60%, despite the EU and UK targeting 80%. The UK's new government has advanced the 100% target to 2030, creating a potential gap that only cheap, mass-market cars can fill.

German automakers are resisting the quotas, arguing it could undermine climate goals. The growth in Europe’s electric car sales has slowed, with current sales just over 2 million annually, representing under 20% of the market. In the UK, the 2024 EV sales quota is 22%, but sales are around 17%.

Experts predict that the EU and UK will miss the 2030 and 2035 targets without more affordable EVs. European manufacturers are reluctant to enter the low-profit, budget EV market. Industry experts argue that the focus should shift from high-performance electric SUVs to small, efficient city cars.

Investment bank UBS has cut its European EV sales forecast to 8.3 million by 2030, and Jefferies predicts 6.8 million, about 50% of the market.

Cardiff Business School’s Professor Peter Wells and other experts suggest allowing more affordable Chinese EVs into the market could help meet targets. Otherwise, the industry may face fines or miss climate goals.

Pedro Pacheco from Gartner Group believes almost 100% electrification in Europe is inevitable, though it may not happen by 2035. Collaboration with Chinese manufacturers could be a solution, as Europe needs to focus on affordable EVs to ensure a successful transition.