EU electric vehicle market 'likely to deteriorate' in 2025!
The outlook for the battery electric vehicle (BEV) in the EU continues to deteriorate, according to new data from S&P Global. He estimates that the share of electric battery vehicles in 2025 is likely to be 21%. This is a significant downward revision from S&P Global's forecast in the first half of 2024, which was 27%. This revision is largely due to changing market conditions, as demand for electric vehicles suffers globally.
A lower market share of battery electric vehicles in 2025 is also likely to make it much more difficult to meet the EU's carbon emission targets for 2025. This is because increasing market share and BEV sales is one of the main ways in which automakers have planned to meet these targets.
Other ways include higher-emission manufacturers partnering with lower-emission ones, as well as changing sales strategies to focus on more efficient vehicle models. Mild hybrid technology, which involves using a small battery-powered electric motor to assist a traditional diesel or gasoline engine, can also contribute to meeting these goals.
Martin Kupka, the Czech transport minister, said in a statement on ACEA's website: "Without an automotive industrial action plan, we risk falling behind the US and China.
"The reality check shows that the EU needs to have a more flexible system for car manufacturers to meet ambitious CO2 reduction targets. We need to ensure that the industry uses the profits to invest in new solutions rather than pay fines."
Sigrid de Vries, director general of ACEA, also said in the press release: "The looming crisis calls for urgent action. All indicators point to a stagnation of the electric vehicle market in the EU, at a time when acceleration is needed. In addition to the disproportionate costs of compliance for EU manufacturers in 2025, the success of the entire road transport decarbonisation policy is at stake.
"We appreciate that some European commissioners have emphasized regulatory predictability and stability in their confirmation hearings, but stability cannot be an end in itself. Manufacturers have invested heavily and will continue to do so. Europe must stay on track green transformation by adopting a strategy that works".
The EU has recently imposed higher import tariffs on Chinese electric vehicle manufacturers such as Geely, BYD and SAIC. The decision came amid increased accusations by the Chinese government of heavily subsidizing these companies, allowing them to sell their models at significantly reduced prices in the EU.
This, in turn, has significantly undercut other European automakers such as Volkswagen, Audi, Mercedes-Benz and BMW. The EU has now imposed a tariff of 18.8% on Geely, 17% on BYD and 35.3% on SAIC. However, with the implementation of these tariffs, these electric vehicles are likely to become significantly more expensive, thus discouraging sales, especially as buyers still struggle with the cost of living crisis across Europe.
This, in turn, is likely to make it even more difficult to meet carbon emission targets, both in 2025 and further into 2030.
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