What’s next for Europe’s electric vehicle market?

Governments across Europe are turning to electric vehicles to help curb rising greenhouse gas emissions from the region’s busy road network. Here’s what you need to know.

Europe, the birthplace of the motor car, is on course to become one of the world’s leading electric vehicle markets too. Climate change is high on the political agenda, several governments are working towards 2050 net-zero CO2 targets, and decarbonising transport is an important part of that process.

Why are policies favouring electric vehicles?

Transportation is a significant source of greenhouse gas emissions. It’s responsible for around a fifth of Europe’s CO2 emissions, with 72% of that coming from road vehicles [1]. Worse still, that volume is rising. Traffic is increasing across the region, offsetting the positive effects of biofuels and more efficient engines. CO2 emissions from cars and heavy-duty vehicles were 5.8% and 5.5% higher in 2019 than 2000, according to the EEA [2].

Reversing that trend means re-thinking how people and goods are transported, but switching to electric vehicles is an important part of that process. The International Council on Clean Transportation (ICCT) claims lifecycle CO2 emissions (including production) are already between 63% and 69% lower than equivalent petrol vehicles – and that gap will widen to between 71% and 77% in 2030 [3].

How big is the Europe’s electric vehicle market?

Europe is already one of the world’s largest electric vehicle markets. More than 2.3 million electric cars and vans were sold across the region during 2023, according to the International Energy Agency (IEA) [4]. That’s a ten-fold increase since 2018, helped by manufacturers providing a wider choice of longer-range, faster charging vehicles and local purchase and tax incentives.

Meanwhile, production costs are falling with economies of scale and localisation of supply chains, and battery prices are declining too. The average price per kilowatt-hour fell 82% between 2013 and 2023 [5], while two of China’s biggest manufacturers are expecting a further 50% reduction this year [6]. The IEA is predicting 14.6 million plug-in hybrid and electric vehicles will be sold across Europe in 2035.

When will sales of petrol and diesel cars end in Europe?

Cars and vans typically have a lifespan of around 15 years [7], so reaching net-zero CO2 emissions by 2050 means phasing out new combustion engine vehicles by the mid-2030s. However, the deadlines vary:

• The Accelerating to Zero Coalition, signed at the 2021 COP26 climate change conference, is a pledge to phase out tailpipe CO2 emissions for new cars and vans by 2040 – or 2035 in “leading markets”. Signatories include 22 national and 27 local governments across Europe, as well as large fleets and vehicle manufacturers [8].
• The European Union’s Fit for 55 package is targeting a 55% reduction in tailpipe CO2 emissions for new cars and vans by 2030, rising to 100% in 2035 [9]. Although the Commission is considering exemptions for zero-carbon ‘e-fuels’, the 2035 deadline effectively bans most new combustion engine vehicles.
• The UK’s Zero-Emission Vehicle (ZEV) Mandate came into force in 2024, introducing battery-electric and fuel cell vehicle targets as a share of new registrations. By 2030, 80% of new cars and 70% of new vans must be ZEVs, rising each year to reach 100% by 2035. Manufacturers face penalties of £15,000 and £18,000 per vehicle sold over that threshold [10].
• Several countries are moving even faster. Norway is phasing out new combustion engine cars by 2025 [11], while Ireland and the Netherlands will ban petrol, diesel and hybrid cars and vans by 2030 [12, 13].

Will Europe’s buses and trucks be electric too?

Potentially, yes. Heavy-duty vehicles (HDVs) produce 6% of the EU’s total greenhouse gas emissions, and freight volumes increased by a third between 2000 and 2019 [14, 2]. Regulators are looking to phase out fossil fuels, but the transition to zero-emission vehicles will be slower and more diverse than for cars and vans.

• The European Union is demanding a 65% reduction in CO2 emissions for new HDVs by 2035, rising to 90% in 2040, though the baseline year depends on the vehicle type. Manufacturers can earn credits for selling zero-emission (hydrogen fuel cell or battery electric) and ultra-low emission (hybrid) vehicles, as well as models that emit half as much CO2 as the class average. They can also be fined for non-compliance [14].
• In 2021, the United Kingdom became the first country in the world to commit to phasing out fuel-burning HDVs. All new trucks up to 26 tonnes must be zero-emission vehicles by 2035, and that requirement extends to all new HDVs by 2040. The Sunak government also ruled out using low-carbon fuels for road transport [15].

How will electric vehicles change fuel retail in Europe?

Fuel retailers are facing the biggest change in the sector’s history. The IEA predicts plug-in hybrid and electric vehicles will displace 0.8 million barrels of oil in 2030 [4], while Boston Consulting Group claims up to 80% of forecourts in leading markets (such as Europe) will be unprofitable by 2035 unless they adapt to the increasingly electrified vehicle parc [16].
The good news, for fuel retailers, is forecourts are often perfectly located to host the required charging infrastructure for Europe’s growing electric vehicle fleet.

• The European Union is establishing alternative fuel corridors throughout the Trans-European Transport (TEN-T) network – an initiative which combines key road, rail, air and waterways into strategic routes across the region. By 2025, the ‘core’ road network must offer 400kW car and van chargers at 60km (37-mile) intervals, rising to 600kW by 2028. The wider TEN-T network must offer EV chargers every 100km (62 miles), and hydrogen stations every 200km (124 miles) [17].
• The UK government is aiming to install 300,000 EV chargers by 2030 to meet predicted demand [18] – that’s five times more than today [19]. Its target was to have six rapid chargers at every service area on England’s strategic road network by the end of 2023, with some sites hosting more than 12. Installations are supported by a £950m Rapid Charging Fund [20] and £70m to pilot upgraded power supplies [21].

The EU and UK have also committed to stringent customer experience standards. This includes uptime targets, membership-free access using a contactless credit card or smartphone, and live data about availability [22, 23].
Konect is designed to help fuel retailers capitalise on the opportunities ahead. It’s Gilbarco Veeder-Root’s unique, turnkey charging ecosystem, designed to integrate easily into forecourt systems and enable fuel retailers to introduce their own infrastructure with confidence. To find out more, click here.

REFERENCES:

[1] European Parliament. (2023). Reducing car emissions: new CO2 targets for cars and vans explained. [online] Available at: https://www.europarl.europa.eu/topics/en/article/20180920STO14027/reducing-car-emissions-new-co2-targets-for-cars-and-vans-explained [Accessed 21 Aug. 2024].
[2] European Environment Agency. (2024). Road transport. [online] Available at: https://www.eea.europa.eu/en/topics/in-depth/road-transport [Accessed 21 Aug. 2024].
[3] International Council on Clean Transportation. (2021). Global Vehicle Life Cycle Assessment (LCA) White Paper. [online] Available at: https://theicct.org/wp-content/uploads/2021/07/Global-Vehicle-LCA-White-Paper-A4-revised-v2.pdf [Accessed 21 Aug. 2024].
[4] International Energy Agency. (2024). Global EV Data Explorer. [online] Available at: https://www.iea.org/data-and-statistics/data-tools/global-ev-data-explorer [Accessed 21 Aug. 2024].
[5] BloombergNEF. (2023). Lithium-ion Battery Pack Prices Hit Record Low of $139/kWh. [online] Available at: https://about.bnef.com/blog/lithium-ion-battery-pack-prices-hit-record-low-of-139-kwh/ [Accessed 21 Aug. 2024].
[6] CnEVPost. (2024). Battery Price War: CATL and BYD Drive Costs Down. [online] Available at: https://cnevpost.com/2024/01/17/battery-price-war-catl-byd-costs-down [Accessed 21 Aug. 2024].
[7] European Parliament. (2023). EU ban on sale of new petrol and diesel cars from 2035 explained. [online] Available at: https://www.europarl.europa.eu/topics/en/article/20221019STO44572/eu-ban-on-sale-of-new-petrol-and-diesel-cars-from-2035-explained [Accessed 21 Aug. 2024].
[8] Accelerating to Zero Coalition. (n.d.). Signatories. [online] Available at: https://acceleratingtozero.org/signatories/ [Accessed 21 Aug. 2024].
[9] European Council. (2023). Fit for 55: Council adopts regulation on CO2 emissions for new cars and vans. [online] Available at: https://www.consilium.europa.eu/en/press/press-releases/2023/03/28/fit-for-55-council-adopts-regulation-on-co2-emissions-for-new-cars-and-vans/ [Accessed 21 Aug. 2024].
[10] Department for Transport. (2023). Zero emission vehicle (ZEV) mandate: consultation summary of responses and joint government response. [online] Available at: https://www.gov.uk/government/consultations/a-zero-emission-vehicle-zev-mandate-and-co2-emissions-regulation-for-new-cars-and-vans-in-the-uk/outcome/zero-emission-vehicle-zev-mandate-consultation-summary-of-responses-and-joint-government-response [Accessed 21 Aug. 2024].
[11] Norwegian EV Association. (n.d.). Norwegian EV policy. [online] Available at: https://elbil.no/english/norwegian-ev-policy [Accessed 21 Aug. 2024].
[12] Government of Ireland. (n.d.). Taking charge of our transport future. [online] Available at: https://assets.gov.ie/270956/94a5673c-163c-476a-921f-7399cdf3c8f5.pdf [Accessed 21 Aug. 2024].
[13] Netherlands Enterprise Agency. (n.d.). Electric transport. [online] Available at: https://english.rvo.nl/topics/electric-transport#zero-emission-for-passenger-vehicles-by-2030 [Accessed 21 Aug. 2024].
[14] European Commission. (n.d.). Reducing CO2 emissions from heavy-duty vehicles. [online] Available at: https://climate.ec.europa.eu/eu-action/transport/road-transport-reducing-co2-emissions-vehicles/reducing-co2-emissions-heavy-duty-vehicles_en [Accessed 21 Aug. 2024].
[15] Department for Transport. (2021). UK confirms pledge for zero-emission HGVs by 2040 and unveils new chargepoint design. [online] Available at: https://www.gov.uk/government/news/uk-confirms-pledge-for-zero-emission-hgvs-by-2040-and-unveils-new-chargepoint-design [Accessed 21 Aug. 2024].
[16] Boston Consulting Group. (2019). Service stations of the future. [online] Available at: https://www.bcg.com/publications/2019/service-stations-future [Accessed 21 Aug. 2024].
[17] European Council. (2023). Alternative fuels infrastructure: Council adopts new law for more recharging and refuelling stations across Europe. [online] Available at: https://www.consilium.europa.eu/en/press/press-releases/2023/07/25/alternative-fuels-infrastructure-council-adopts-new-law-for-more-recharging-and-refuelling-stations-across-europe/ [Accessed 21 Aug. 2024].
[18] Department for Transport. (2022). Tenfold expansion in chargepoints by 2030 as government drives EV revolution. [online] Available at: https://www.gov.uk/government/news/tenfold-expansion-in-chargepoints-by-2030-as-government-drives-ev-revolution [Accessed 21 Aug. 2024].
[19] Zap-Map. (2024). EV stats: How many charging points? [online] Available at: https://www.zap-map.com/ev-stats/how-many-charging-points/ [Accessed 21 Aug. 2024].
[20] Department for Transport. (2022). Taking charge: The electric vehicle infrastructure strategy. [online] Available at: https://assets.publishing.service.gov.uk/media/6245ba40e90e075f15381cf0/taking-charge-the-electric-vehicle-infrastructure-strategy.pdf [Accessed 21 Aug. 2024].
[21] Department for Transport. (2023). Transport Secretary announces £70 million boost for more rapid electric vehicle chargers at COP28. [online] Available at: https://www.gov.uk/government/news/transport-secretary-announces-70-million-boost-for-more-rapid-electric-vehicle-chargers-at-cop28 [Accessed 21 Aug. 2024].
[22] European Parliament. (2023). MEPs adopt new rules for more charging stations and greener maritime fuels. [online] Available at: https://www.europarl.europa.eu/news/en/press-room/20230707IPR02419/meps-adopt-new-rules-for-more-charging-stations-and-greener-maritime-fuels [Accessed 21 Aug. 2024].
[23] Department for Transport. (2023). Public Charge Point Regulations 2023: Guidance. [online] Available at: https://www.gov.uk/government/publications/the-public-charge-point-regulations-2023-guidance/public-charge-point-regulations-2023-guidance [Accessed 21 Aug. 2024].