The European car industry is sounding the alarm about a decline in demand for electric cars, with experts raising concerns about the future of the zero-emission transition. The European Automobile Manufacturers’ Association (ACEA) has called for urgent action from the EU institutions to address the falling demand for battery electric vehicles (BEVs) and revisit CO2 regulations for cars, vans, and heavy-duty vehicles ahead of their scheduled reviews.
According to the latest data from ACEA, the market share for BEVs is shrinking across Europe. Year-to-date sales volumes have fallen by 8.4% compared to the previous year, and market share dropped from 13.9% in 2023 to 12.6% in 2024. This decline in the electric car market is happening against a backdrop of broader market contraction, with total car sales in the EU still 18% lower than pre-pandemic levels.
Consumer sentiment also reflects this decline, with fewer non-EV owners considering an electric vehicle for their next purchase. McKinsey’s 2024 report indicates that only 16% of non-EV owners plan to switch to an electric car, down from 18% in 2021. Even more concerning, nearly 20% of current BEV owners are considering a return to combustion engine vehicles.
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The Infrastructure and Policy Gaps
Despite the car industry’s significant investment in EV production, ACEA argues that insufficient charging and hydrogen refuelling infrastructure, along with a lack of affordable green energy, is hampering growth. The association also highlights the need for more tax incentives, a competitive manufacturing environment, and secure access to key materials like batteries and hydrogen.
According to the ACEA report, the EU needs to increase its charging infrastructure eightfold by 2030 to meet its CO2 reduction targets. However, current progress is falling short of these goals. This, coupled with rising competition from other automaking regions, threatens Europe’s automotive competitiveness on a global scale.
A Looming CO2 Target Deadline
Adding pressure to the situation is the looming 2025 deadline for stricter CO2 emission reduction targets. European car makers are growing concerned about their ability to meet these targets without major regulatory revisions. The ACEA warns that failing to adapt the rules to account for the economic and geopolitical shifts of recent years could result in significant financial penalties, production cuts, job losses, and a weakened supply chain. This situation comes at a time when the European auto industry is already struggling to keep pace with international competitors.
Calls for Urgent Action
In response to the declining demand for EVs and the challenges in meeting upcoming CO2 targets, ACEA is calling for the European Commission to bring forward the review of CO2 regulations for both light- and heavy-duty vehicles to 2025. This move, they argue, is critical to ensuring that the necessary infrastructure and economic conditions are in place to support the continued transition to zero-emission vehicles.
ACEA is also urging EU institutions to implement short-term relief measures to help the industry navigate the 2025 CO2 targets, including targeted secondary legislation to fast-track the deployment of EV infrastructure and increase the availability of affordable green energy.
A Challenging Road Ahead
The road to a fully electrified future for Europe’s car industry is proving more difficult than many anticipated. While automakers have made significant strides in bringing EVs to market, the broader ecosystem needed to support mass adoption is lagging. Without rapid intervention from policymakers, the promise of a zero-emission transport system in Europe may falter.
For now, the data suggests that demand for EVs is indeed slowing down, and unless urgent action is taken, the transition to zero-emission vehicles could face even greater challenges in the years ahead.
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John is the Editor and Spokesperson for Electric Car Guide.
With over 20 years of writing experience, he has written for titles such as City AM, FE News and NerdWallet.com, covering various automotive and personal finance topics.
John’s market commentary has been covered by the likes of The Express, The Independent, Yahoo Finance and The Evening Standard.
