EU electric cars: market stagnation and challenges
One key challenge in achieving carbon neutrality is shifting to sustainable modes of transport. However, there are a number of challenges in Europe that limit the strategy’s implementation. One of these, according to experts, is electric vehicles in the EU, which continue to struggle. After a period of active growth, interest in battery-powered cars has slowed noticeably.
Analysts predict that the stagnation will continue until 2025, forcing experts to rethink the sector’s prospects. Electric cars are now expected to account for 21% of the EU market in 2025, up from 27% in the previous forecast.
European car companies have been banking on battery-powered transport as the main tool for reducing emissions. However, plans are likely to be adjusted. S&P Global provides the following data:
– the outlook for electric vehicles in the European market has deteriorated significantly;
– the market share of these vehicles will be 21% in 2025;
– previous experts predicted an increase of 27%.
Reasons for the slowdown
The downward revision of expectations is mainly due to changes in global market conditions. Demand for electric vehicles is falling worldwide, and Europe is no exception. For the EU, this could jeopardise achieving its carbon dioxide emissions targets.
In addition to increasing the share of battery-powered transport, implementing a carbon-neutral strategy involves other steps. These include:
– partnering with lower-emission manufacturers;
– changing sales models to focus on cleaner vehicles;
– reducing emissions by increasing hybrid production.
Competing with China and the US
Czech Transport Minister Martin Kupka highlighted the challenges for the EU market. In his view, the European electric vehicle sector risks falling far behind the US and China. To avoid this, the government must offer local carmakers a flexible system of activities. It should help reduce emissions. It is also essential to move away from heavy fines for non-compliance with environmental regulations. It is better to replace these fines with incentives for technological development.
Experts are concerned about a possible crisis in the electric car market. Stagnation in the sector could have a negative impact on the implementation of key milestones in the plan to decarbonise road transport.
Experts say one way to solve the problem is to raise tariffs on Chinese electric cars. However, as experience has shown, such a move could negatively impact the market. The EU has already increased taxes on products made by Chinese carmakers such as Geely, BYD, and SAIC to support local manufacturers. However, European companies cannot compete with Chinese companies in terms of price, making this approach problematic.
