Chinese automakers could account for 9% to 18% of Europe’s EV market in 2025, a new Transport & Environment (T&E) study has revealed.
Chinese carmakers are starting to get a firm foothold on the European market, accounting for 5% of all BEVs sold so far this year, T&E said, warning that a failure of EU carmakers to scale up EV supply could result in overseas companies capturing most of the mass market in Europe.
“European carmakers have slammed the brakes on their electric car offering at a time when Chinese and American carmakers are rapidly bringing new models to the market,” said Julia Poliscanova, senior director at Transport & Environment.
If Europe wants to maintain the competitiveness of its car industry, the EU must introduce a strong industrial policy of its own to match the Chinese and Americans’ muscular support for EVs, the green group said. “The continent’s climate and jobs are at stake,” said Poliscanova.
The share of electric car sales in Europe dropped to 11% for the first half of 2022, down from 13% in the second half of last year. Growing electric vehicle sales in the United States and China suggest that a lack of regulatory incentives, not a supply chain crunch, is the main cause of Europe’s sluggish electrification efforts, said T&E.
EV sales in China soared to nearly 18% of the new car market in the first half of 2022 while the share of EVs in the US grew by 50%. In that same period the share of EVs in Europe fell by two percentage points with Europeans facing excruciatingly long waiting times for electric models.
“The absence of regulatory incentives is doing far more than the supply chain crunch to slow EV sales in Europe,” the T&E senior director said. “The current car CO2 targets are not working.”
The group said the EU must quickly lock in the 2035 phase-out of petrol and diesels and remove loopholes that weaken carmakers' targets. It should also support measures such as low-cost leasing of electric cars to make them affordable for everyone.
European carmakers are increasingly focusing on premium models, leaving the mass market, and with it, mass employment at risk of being dominated by overseas players, T&E said, recommending support for affordable electric cars in the form of low-cost leasing for electric vehicles as has been proposed in France.
The green group recommends that the EU and national governments:
- Confirm a 100% CO2 reduction from all new cars by 2035 as proposed by the European Commission and supported by the European Parliament and EU environment ministers.
- Oppose any exemptions or credits for e-fuels.
- Remove the ZLEV benchmark, that gives credits to carmakers for sales of electric cars, from 2025.
- Electrify all new sales of corporate fleet vehicles by 2030.
- Use EU funds and national measures to accelerate BEV production beyond minimum targets.
Match the kind of industrial policy recently adopted in the US, for example, by applying local sourcing and environmental requirements to tax credits and subsidies for BEVs and batteries.