Electric car market in Europe: an expandable success story

Status: 07/15/2022 08:17

E-cars booming – also in the EU? When it comes to developing e-mobility, Member States make progress at different rates and rely on very different incentives. A good example is a country outside the EU.

Author: Jakob Mayr, ARD Studio Brussels

E-cars are in the fast lane on European roads. Europe has overtaken China as the world’s largest market for electric vehicles. Registrations of electric cars during the pandemic were much better than those with gasoline and diesel engines, sales of which fell sharply.

Sales with a clear upward trend

Also last year, the number of new battery electric car registrations in the EU increased significantly compared to the previous year: from 539,000 to 878,000 vehicles. According to the European producers’ association ACEA, most of them were sold in Germany; then comes France, Italy and the Netherlands.

The upward trend continues, as evidenced by the look at the first quarter of 2022: According to ACEA, battery-powered cars have almost doubled their market share compared to the same period last year and now account for ten percent of total sales. Plug-in hybrids with combined electric / combustion drive have almost nine percent market share.

In some cases, three-digit growth rates

Many EU markets have even seen three-digit growth in battery-powered vehicles, notably Romania with more than 400 percent growth – but the country also has catching up to do. Something is also happening in the main auto markets: Spain gains 110 percent, followed by France with 43 percent growth and Germany with 29 percent more registrations. In turn, in Italy, sales of electric cars with batteries fell by 15%.

Registrations of plug-in hybrid electric vehicles fell across the EU in the first quarter. Overall, however, they managed to increase their market share as sales of gasoline and diesel vehicles fell. Internal combustion engines are still the market leader with a share of just over 50 percent, and gasoline engines remain the most popular cars, but electric vehicles are catching up, incl. on the most important European markets of France, Italy, Spain and Germany.

The share of e-cars in the total number of all registered cars in Germany is still very reasonable: in spring, there were 687,000, or around 1.3%. By 2030, the traffic light coalition wants to put 15 million electric cars on German roads.

A country outside the EU shows the way

Berlin can take a non-EU country as an example: in Norway, new e-car registrations have long overtaken vehicles with internal combustion engines. Last year, more than 100,000 electric cars were sold in Norway. This is equivalent to 65 percent of new registrations.

This is partly due to the generous funding that makes electric cars a third cheaper than internal combustion engines. Imports and VAT are eliminated, e-drivers do not pay fees to enter the city center, and charging is free. However, Norway faces the same problem as many EU countries: Since chips and wiring harnesses are lacking due to supply bottlenecks, car buyers sometimes have to wait months for a new vehicle.

Funding is available almost everywhere

Many European countries want to convince consumers to buy an e-car with bonuses and tax breaks. Romania is ahead in terms of funding – there you will get up to 10,000 euros as a subsidy for the new Stromer, in Croatia about 9,200 euros. In France and Slovenia, contributions are slightly lower than in Germany, amounting to around EUR 7,000; in Italy, Spain, Sweden and Ireland, they range from € 5,000 to € 6,000.

The Netherlands offers shopping bonuses and tax breaks – also for companies that switch their car fleets to alternative drives. The Belgian government does not grant a purchase bonus, but individual regions support private individuals. Poland introduced a purchase bonus in mid-2020, which significantly increased the share of electric cars in new registrations. In addition to bonuses and tax reliefs, e-car drivers enjoy other benefits in some EU countries: free parking, free bus lanes, discounts on tolls and tolls in cities. However, Estonia is giving up its purchase incentives altogether.

Carrot or Stick?

According to Transport & Environment, which promotes sustainable transport, there must be a balance between contributions and taxes for as many people as possible to switch to e-mobility. Then, for example, France and the Netherlands rely on carrots and sticks: bonuses on electric cars, high taxes on internal combustion engines.

On the other hand, according to Transport & Environment, Germany relies only on carrots: the federal government tempts electric car buyers with high premiums, but levies relatively low taxes on large internal combustion cars. Moreover, the taxation of company cars, which the association says is too generous, means that in Germany only half as many company cars are electrically powered as private cars.

German e-car financing consists of an environmental bonus (car manufacturers and federal government) and an innovation bonus, and is up to € 9,000 for battery-powered cars and € 6,750 for plug-in hybrids. The innovation premium expires at the end of the year. Then there should only be a simple federal share (environmental bonus). The FDP ministers in the federal government also want to end this as soon as possible. The SPD and the Greens are against it.

Charging stations, but fast!

In addition to state subsidies, it is important that potential e-car buyers find enough charging points when traveling – even when traveling to neighboring European countries. One thing is for sure: without a dense network of powerful charging stations, the transition to e-mobility will not be successful. According to the European Commission, Member States should ensure that charging stations are installed every 60 kilometers along major expressways within the next three years.

There is still a long way to go: currently around half of all charging stations in the EU are located in just two countries, namely the Netherlands (29%) and Germany (19%). Coverage is also relatively good in France, Sweden and Italy. In turn, in the Baltic States, as well as in Malta and Cyprus, e-car drivers have to look for a charging option for a long time.

According to the manufacturer’s association ACEA, the current 307,000 charging points in the EU is far too little to promote e-car sales and achieve climate goals. The association is demanding around 6.8 million public charging points by 2030 – 22 times more in eight years than today. In Germany, the expansion of the charging infrastructure is progressing, but it is also far behind demand. The Federal Network Agency reports 53,000 publicly available charging points for electric vehicles.

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