Europe Electric Vehicle Market Outlook, 2027

In the report titled Europe Electric Vehicle Market Outlook, 2027 the countries of Germany, UK, France, Netherlands, Norway, Sweden, Italy, and Spain are studied, which in total accounted for a market of more than USD 98 Billion in the year 2021. The market is expected to grow at a CAGR of more than 14% between 2022 and 2027.

The top three countries in the region are Germany, the UK, and Norway, which together account for a market share of approximately 49% in terms of value. Volkswagen Group and Renault are investing strongly in electric vehicles. The Volkswagen Group plans to invest approximately USD 72 Billion in its development, including areas of hybridization, electric mobility, and digitalization, between 2021 and 2027. A French company will invest 128.5 Million euros for a 50% stake in a venture with Jiangling Motors Corp to develop electric vehicles in China, part of a push by a French company to make further inroads into the world market.

The governments support the wide deployment of electric vehicles in the region by extending the grant scheme with a substantial grant for boosting the adoption of ultra-low emission vehicles. In March 2014, Norway became the first country in the world where one in every 100 passenger cars was an electric plug-in. In addition, in 2019, almost 60% of the cars sold were electric-powered. Customer demand for electric cars has been constrained by concerns about the limited operating range of these vehicles. In Germany, electric cars made up only 1.8% of new passenger car registrations last year, with diesel and petrol cars accounting for 32% and 59.2%, respectively. As more businesses in the region adopt electric vans and commercial vehicles, major manufacturers are working hard to keep up with demand, rolling out an impressive selection of dedicated commercial electric vans. Some countries in the region charge higher road tolls for diesel cars than for petrol-driven vehicles.

The PHEV segment is expected to grow at a CAGR of 10% during the forecast period. The market scenario is expected to change by the forecasted period, with the BEV segment ruling the market with a market value of over USD 80 Billion. Europe represents the largest share of around 0.6 Million of the charging points, corresponding to a connectivity penetration rate of 46%. There are 271337 public EV charging points in Europe. To guarantee a seamless charging infrastructure in the region, the geographic distribution of charging stations certainly needs to catch up. In 2019, super fast charging points accounted for less than 10% of the total market. The resulting lack of fast charging stations makes consumers concerned about the lack of charging options, thus forestalling the development of a functioning market.

The German government has set a target to have 7 Million to 10 Million EV registrations by the end of 2030, which has forced manufacturers to increase their production, formulate new marketing strategies, and increase EV sales in the country. Furthermore, the use of wireless EV charging systems carries a huge potential for growth in Germany since major automotive OEMs have started announcing the wireless EV charging capabilities of their luxury cars in the EV segment. For instance, Mercedes-Benz announced wireless charging for the S550e plug-in hybrid (PHEV) luxury sedan. German automotive manufacturers are investing heavily in zero-emission technology development. Since 2017, these manufacturers have invested over USD 5.17 Billion in electric vehicle technology development. Moreover, leading automotive OEMs are heavily investing in developing the electric vehicle ecosystem. For instance, BMW invested USD 340 Million in a Leipzig EV plant and another USD 225 Million in a Munich battery plant. The company has plans to introduce 12 new BEVs and 13 PHEVs in the coming years.

Factors, such as an increase in demand for fuel-efficient, high-performance, and low-emission vehicles and stringent government rules and regulations regarding vehicle emissions, supplement the growth of the electric vehicle market in Europe. However, high manufacturing costs and insufficient electric vehicle charging infrastructure in Europe are the factors that are expected to hamper the growth of the electric vehicle market. Moreover, technological advancements and proactive government initiatives complement the growth of the European electric vehicle market during the forecast period. Presently, most vehicles run on fossil fuels such as petrol and diesel. The reserves of crude oil are anticipated to become dry over the next few years; hence, there is an increased demand to search for a viable, economical, and clean source to power the automobile. Electric vehicles are the solution to a carbon-neutral, high-performance, economic, and practical transportation system.

European countries have very well accepted electric vehicles. According to the obtained data, in 2020, car manufacturers sold more than 500,000 electric cars in Europe. The sales of electric vehicles have increased progressively since 2010, with a yearly growth of around 50% over the past 5 years. As per the statistics published in the European Electric Vehicle Fact Book 2019/2020, electric vehicles represented 3.6% of new passenger car registrations in 2019, a growth of 2.5% as compared with 2018. Electric vehicles are becoming more popular in Europe as charging infrastructure improves, production costs fall, and governments work to reduce carbon emissions generated by the transportation sector. According to the International Council on Clean Transportation report, Europe is now the second-largest electric vehicle market in the world by volume, behind China and ahead of the U.S. This tremendous growth in demand for electric vehicles in Europe is expected to drive the growth of the European electric vehicle market over the forecast timeframe.

The European Union has imposed strict rules and regulations over the years on carbon emissions generated by automobiles. These regulations forced manufacturers in Europe to come up with low-emission vehicles, which ultimately led to the large-scale adoption of electric vehicles in Europe. Regulation 443/2009 fixed the compulsory reduction of carbon emission targets for new cars. The very first target was fully realized from 2015 onwards. Following an upward trend from 2012 onwards, a goal of 130 grams of CO2 per kilometer was set for the EU fleet-wide standard emanation of new passenger cars between 2015 and 2019. The maximum permitted emissions released from the new cars registered in 2019 in Norway, Iceland, and EU28 were 122.4 grams of CO2/km. From 2021, the EU fleet-wide average emission goal for new cars is set to be just 95 grams of CO2/km. In any case, if the CO2 emissions of a company's products surpass its maximum emission goal in a given year, the company has to pay a surplus emissions charge for every car registered. Since 2019, the fine is around $106.7 for each gram/km over the set target. Therefore, strict implementation of stringent government rules and regulations to limit carbon emissions from automobiles is anticipated to drive the growth of electric vehicles in Europe over the forecast period.

Several companies are focusing on the development of innovative solutions for electric mobility and charging infrastructure. In 2020, Groupe Renault (U.K.) launched its INCIT-EV project, specifically for electro-mobility. The company offered innovative wireless charging solutions for EVs across Europe under this 48-month initiative. The project will focus on low-power bidirectional charging and static wireless charging in taxi lanes located at airports and central stations in Zaragoza, Spain.

Government-supportive incentives in the form of tax reductions and grants for residential and commercial infrastructure encourage the adoption of electric mobility. For instance, in the Netherlands and Greece, the government offers incentives for purchasing and installing residential charging stations. It provides a deduction of up to 36% and a tax return of up to 75% on costs associated with purchasing and installing charging stations. The Finnish government announced an investment of approximately USD 6.57 Million to expand charging infrastructure in 2020 and 2021. These developments are expected to support the growth of EVs in Europe in the coming years.

Renault's Zoe and Tesla's Model 3 are among Europe's best-selling electric vehicle models, both in terms of vehicles in operation and new car registrations. In the latter category, Volkswagen's new ID.3 model climbed through the ranks and topped the charts in December. A growing number of local governments are announcing plans to regulate or restrict access to combustion engine vehicles in urban centers, cities, or metropolitan regions, often ahead of national targets to end new combustion vehicle sales or registrations. London has implemented small, street-based near-zero-emission zones in three areas, and Amsterdam and Paris have announced plans for citywide ZEZs in 2030. Cities are also leveraging their unique authority over public and private fleets to accelerate EV uptake in high-visibility segments. Paris has set the goal of having a 90% electric municipal fleet in 2021 and 100% zero-emission public transportation in 2025.

In a milestone for the environment, Europeans purchased more electric cars than those powered by diesel last month. According to recent data, over 20 per cent of new cars sold in Europe and the United Kingdom (UK) in December 2021 were electric. Meanwhile, the sale of diesel vehicles in the European Union (EU) slipped below 19 per cent. While many developed nations have pledged to phase out petrol and diesel vehicles in the next 20 years to reduce greenhouse gas emissions, the transition will be more complicated in developing countries, where old imported cars are often the most affordable option. A 2020 report by the United Nations Environment Program (UNEP) found that the three largest exporters of used vehicles - Europe, Japan, and the United States - exported 14 Million used light-duty vehicles worldwide between 2015 and 2018.

Some of the key players operating in the European electric vehicle market are BMW Group (Germany), Volkswagen AG (Germany), AB Volvo (Sweden), Mercedes-Benz Group AG (Germany), Alcraft Motor Company Ltd. (U.K.), Groupe Renault (France), Stellantis N.V. (Netherlands), DAF Trucks N.V. (Netherlands), Iveco S.p.A. (Italy), and Volta Trucks AB (Sweden).

COVID-19 Impacts:

The outbreak of COVID-19 slowed down vehicle sales in Europe in 2020, including electric cars. The COVID-19 crisis led to disrupted supply chains, limited operations and workforce, and factory closures. This caused a severe decline in vehicle sales in Europe, especially in the electric vehicle segment. Consumer behavior has changed significantly since the pandemic. People have reduced their use of shared mobility services, and the total miles driven have also decreased due to remote working in most industries. In Europe, during the lockdown, manufacturing facilities, supply chains, and consumer demand were paralyzed in the first half of 2020. However, the European electric car market is moderately affected due to the strong policy support as 2020 was an important target year for emissions standards. The government supported the automotive industry by regulating policies that benefited both consumers and manufacturers. Incentives and subsidies were notably increased for purchasing an electric car in Germany, the U.K., and Norway. Besides, the prices for batteries continued to reduce, which helped increase the adoption rate of electric cars in the region. Thus, the market is anticipated to grow significantly in the forecast period.

Companies Mentioned:

Aiways Automobile Europe GmbH, Arrival Limited, Ashok Leyland, Beijing Automobiles Industry Holding Corporative limited, Bentley Motors Limited, Blue Bird Corporation, BMW Group, BYD Company Motors, Citroen, Daimler AG, Ford Motors, General Motors, Hyundai, Irizar, Lightening GT, Micro Mobility, MW Motors, NFI Group, Nio, Nissan Motor, PoleStar, Proterra, Rimac Automobiles, SAIC, Tata Motors, Tesla, Toyota Motor Corporation, VDL Groep, Volkswagen, Yutong, Zhejiang Geely Holding Group

Considered In the Report

• Geography: Europe
• Base year: 2021
• Historical year: 2016
• Estimated Year: 2022
• Forecasted year: 2025

Countries covered:

• Germany
• UK
• France
• Norway
• Netherlands
• Sweden
• Italy
• Spain

Aspects Covered In the Report

• Market Size By Value for the time period (2016-2027F)
• Market Size By Volume for the time period (2016-2027F)
• Market Share by Vehicle Type (Passenger & Light Commercial)
• Market Share by Propulsion Type (BEV & PHEV)
• Market Share by Sales Channel (2016, 2021 & 2027F)
• Market Share by Charging Type (Normal & Fast)
• Market Share by Country

Key Points Covered in this report:

• Market Evolution through value and volume CAGRs at different verticals
• Detailed discussion on the market dynamics that influence the market and the possible opportunities
• In sights on the market leader's performance including market shares, strategies, products, financial positions, etc

Intended Audience

This report can be useful to industry consultants, manufacturers, suppliers, associations & organizations related to the electric vehicle industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing & presentations, it will also increase competitive knowledge about the industry.