Europe poised for electric car boom as sales surge towards half a million

The report by campaign group Transport & Environment (T&E) reveals that the EU witnessed a record year of plug-in hybrid and EV sales in 2015, reaching 145,000 vehicles sold. Including non-EU members, Europe is now the second-largest market for electric cars in the world behind China, and T&E is calling for increased legislation to accelerate the transition.

“The electromobility revolution is underway and Europe is well placed to take a leading position,” T&E electromobility officer Julia Hildermeier said.

“To fully grab this chance, Europe needs four important boosts from regulators: ambitious European CO2 limits for new cars in 2025 including a specific target for EV sales to stimulate competition amongst carmakers; to accelerate the roll-out of EV charging infrastructure across Europe; to ban dirty diesels from cities; and tax breaks for battery electric vehicles.”

While the European market is growing rapidly, sale levels of EVs vary considerably across EU Member States. The Netherlands stands out as the frontrunner for the third year in a row, and EV sales also represent by far the largest share of total new cars sales at nearly 10%, thanks largely to generous subsidies.

The UK sells the second highest level of EVs, with plug-in hybrids dominating sales despite the fact that the purchase incentive offered is decidedly less.

The growth in sales is matched by an increase in choice, with nearly 30 EV and hybrid models now on the market. The top-selling battery models are the Renault ZOE (16,612 units sold) and the Nissan Leaf (11,977 sold), while plug-in hybrids are showing strong growth across the board. This includes the Mitsubishi Outlander SUV (27,977 sold), now the most popular hybrid choice by quite some margin.

Mitsubishi dominates the market position of major manufacturers in the EU’s low-emission vehicle market in 2015, almost exclusively reflecting sales of the Outlander. Renault, Nissan, BMW and Volkswagen all recorded electric car sales between 10,000 and 23,000 last year, while Elon Musk’s Tesla finished highest of the entrants specialising solely in EVs, with 9,300 new cars sold in Europe in 2015.

These developments across the European market are largely driven by the recent drop in battery prices, T&E says.

The fall in battery prices is an essential component of the growing popularisation of EVs, with a very steep drop in prices to around €250 per kWh in 2015, more than three times the figure for 2009.  Global battery production for EVs is expected to increase dramatically in the near future, driven in part by the opening of Tesla’s $5bn ‘Gigafactory’ in the Nevada Desert, which Musk believes could reach $100 per KWh by 2020.

The increase in the uptake of EVs has been encouraged by national and European policy. For instance, the Netherlands has pledged to make 100% of new cars sales emissions-free by 2025, while the UK offers a relatively large grant of up to €6000 towards the price of new EVs. Sales in France and Germany are growing, but the share remains small, the T&E analysis suggests.

The report goes on to note that, at a European level, emissions standards have been the main driver for carmakers to invest in electrification. Analysis shows that, in order to achieve a 30% emission reduction by 2030, manufacturers will be forced to sell ultra-low emission vehicles (ULEVs) to comply with emissions standards.

Vehicle electrification

Transport has become one of Europe’s biggest climate problems – cars are responsible for 15% of the continent’s total CO2 emissions and are the single largest source of emissions in the transport sector. A new legislative proposal from the EU that creates binding targets for Member States to reduce emissions in the transport sector will hinge on the ability to accelerate low-carbon technology and fuels in the automotive industry.

It is increasingly evident that carmakers have established that the future of mobility lies in the driving seats of EVs, which are set to account for 35% of all car sales by 2040 – or 100% by 2030, if you are to believe Richard Branson. The growth of EVs has been led by the likes of Nissan and Tesla – two brands that are showing that the electrification of cars should no longer be seen as a niche market.

The opening weekend of the recent Paris Motor Show showcased the automotive sector’s evolution towards a low-carbon and electrified state, as companies such as Renault, Mercedes and the so-called ‘dirty man of the sector’ Volkswagen introduced new EV concepts.

George Ogleby