European EV Gross sales & Subsidies Have Largely Benefitted Excessive-Revenue Teams & Firms

Final Up to date on: twenty eighth Might 2025, 12:00 am

The transition to EVs in Europe: a two-speed dynamic

The transition to EVs in Europe is a heterogeneous course of. Each between and inside international locations, this alteration highlights various capacities to adapt, and inequalities in entry to a sustainable mobility.

The EV uptake is slower in Southern and Japanese international locations. The electrification of the European automobile fleet continues to be in its infancy, with mass market uptake accelerating from 2025. Whereas France and Germany are amongst the leaders, with EVs accounting for 17% and 14% respectively of latest car gross sales in 2024, the opposite three international locations lined by this report – Italy, Spain and Poland – are nonetheless lagging behind, with EVs accounting for 4%, 6% and three% respectively of latest car gross sales that very same yr.

A speedy transition to EVs within the chosen Member States is hindered by the excessive buying value of EVs as defined within the subsequent sub-section, which results in passenger automobiles usually remaining within the nationwide fleet for 10 to fifteen years and having lengthy common lifespans, starting from 15 to twenty years in Germany, France, Spain, and Italy, to 35 years in Poland. In Spain, 47 % of the automobile park is “greater than 15 years previous” (Common Directorate of Site visitors – DGT2023). The excessive determine in Poland may be defined by the massive proportion of imported second-hand automobiles (738,439 imported automobiles in comparison with 475,032 new registrations in 2023), which dominate the automobile fleet. That is additional compounded by the presence of a considerable variety of unused automobiles within the fleet, estimated at over 7 millionwith a mean age of 37 years. The event of the Polish automobile fleet and its gradual electrification rely largely on the inflow of imported automobiles, most of that are second-hand and over 4 years previous. In consequence, Poland has a low EV share of its complete passenger automobile fleet (0.9%).

The transition to EVs: how premium automobiles go away the center and decrease courses behind

Electrical automobiles are making progress however stay costly for the center class. Gross sales of electrical automobiles have grown considerably within the European market since 2020 however haven’t but reached mass-market ranges. Till now, most EVs bought have been costly, high-end fashions bought by companies and high-income teams. In Germany, the final buy bonus – which led to 2023 – primarily benefited the wealthier sections of the inhabitants. Evaluation exhibits that fewer than one in 5 recipients had a internet family earnings of lower than €3,200 per 30 days.

The shortage of availability of reasonably priced new EV fashions (underneath €25,000) implies that EVs stay largely unaffordable for the center class (the common value of an EV bought in Europe is round €40,000-45,000). In consequence, the electrical car subsidies launched in a number of international locations have primarily benefited companies and high-income teams, failing to fulfill the wants of low- and middle-income teams. This unequal entry to EVs implies that these teams don’t profit as a lot from the decrease operating prices of EVs and are extra susceptible to fluctuations in gas costs.

By 2025, the EV market is predicted to develop as carmakers launch new reasonably priced EV fashions to fulfill the goal of lowering CO₂ emissions from automobiles. Nevertheless, the overwhelming majority of middle-income drivers buy their automobiles from the second-hand market, the place EVs are nonetheless uncommon.

Furthermore, firm fleets play an necessary positionas automobiles usually stay within the fleet for 3 to 4 years earlier than reaching the second-hand market. Nevertheless, company fleets are at present lagging behind with regards to electrification, which limits the provision of second-hand EVs. In 2023 as an illustration, their electrification fee was nonetheless decrease than the personal households’ fee (14.1% and 15.6% respectively).

The Öko-Institut’s evaluation exhibits that the present automotive market shouldn’t be geared up to help a mass shift to electrical automobiles. In a state of affairs the place present tendencies proceed—concerning costs, obtainable fashions, and buying energy—a majority of households within the international locations studied will probably be unable to afford a transition to electrical by 2035 (see Determine Annex 2). In consequence, they may stay trapped in fossil gas dependency. The principle causes are inadequate monetary means and a scarcity of obtainable second-hand electrical automobiles.

The arrival of latest reasonably priced city EVs—such because the Renault 5, the electrical C3, the Panda, and the R4 —marks a step towards market enlargement. Nevertheless, the tempo of change stays too gradual. Accelerating industrial rollout and implementing complementary social help measures will probably be important to make sure no households are left behind.

Learn the remainder of this briefing on T&E web site.