Affordable EVs set to transform Europe’s Electric Vehicle market

Stagnation Due to Strategic Profit Maximisation

The report highlights that the apparent slowdown in EV sales is linked to carmakers prioritising profits from internal combustion engine (ICE) vehicles and high-margin, premium EV models. As carmakers prepare for the next EU CO2 target set for 2025, they are holding back the launch of more affordable EVs. This strategy has led to a significant increase in the average price of EVs in Europe, which rose from below €30,000 in 2021 to over €40,000 by early 2024.

The Imminent Growth Phase: Affordable EVs on the Horizon

From 2025, the EV market is expected to enter a new growth phase driven by regulatory requirements and the introduction of ten new affordable, mass-market EV models made in Europe. These models are poised to make electric vehicles accessible to a broader segment of consumers, thus driving a substantial increase in sales. T&E forecasts that EV sales will need to reach 21% by 2025 to meet the new CO2 targets, up from 12% in the first quarter of 2024.

Key Models to Watch

Several new models are set to launch, which will significantly impact the market:

• Fiat Panda Electric: Expected to reveal in 2024, with a major ramp-up in production in 2025.
• Citroën e-C3: Launching in early summer 2024, with a more affordable version to follow in 2025.
• Renault R5: Initially launching in high trims in late 2024, with the base model delayed until 2025.
• Hyundai Kasper: Deliveries start at the end of 2024, aiming for mass-market volumes in 2025.

These launches are part of a broader wave of affordable EVs expected between 2024 and 2027, positioning Europe for a significant market expansion.

Implications for the EU and Carmakers

The report calls for a firm commitment to the 2035 zero-emission car target and urges European carmakers to accelerate the development and launch of affordable EV models. Additionally, the EU is encouraged to support local EV and battery manufacturing through green industrial policies and to ensure the quick implementation of the Critical Raw Materials Act and the Net Zero Industry Act.

Conclusion

The next few years will be crucial for the European EV market. With regulatory pressures and a new wave of affordable models, the industry is set to undergo a transformation that will enhance accessibility and drive significant growth. As the EV market evolves, balancing profitability with the urgent need to address climate change will be essential for maintaining global competitiveness and ensuring a sustainable future for the automotive industry.

Source: transport & Environment