Carmakers Prioritising Large Electric Models Hindering EV Adoption, Analysis Shows

A recent analysis by Transport & Environment (T&E) has shed light on a concerning trend in the electric vehicle (EV) market: the disproportionate focus of car manufacturers on large SUVs and premium models at the expense of more affordable options, hindering the mass adoption of electric cars.

According to T&E’s findings, only 17% of electric cars sold in Europe belong to the more affordable ‘B’ segment, while a staggering 37% of new combustion engine vehicles fall into this category. The imbalance becomes more apparent when comparing the number of models available in different segments. Between 2018 and 2023, only 40 fully electric models were launched in the compact segments (A and B), while 66 large and luxury models (D and E) entered the market

Anna Krajinska, vehicle emissions manager at T&E, expressed concern over this trend, stating, “European carmakers are holding back the mass market adoption of EVs by not bringing affordable models to consumers faster and at volume. The disproportionate focus of manufacturers on large SUVs and premium models means we have too few mass-market cars and too high prices.”

The analysis further revealed that while electric sales in the large car ‘D’ segment accounted for 28% in Europe, this segment constituted only 13% of new combustion engine car sales. This disparity has contributed to a significant increase in the average price of battery electric cars in Europe, rising by 39% since 2015.

Despite the lack of affordable options, the EU market share of battery electric cars saw a modest growth of 2.5 percentage points to reach 14.6% in 2023. However, T&E suggests that the market share could soar to 22% if the corporate car segment, which represents a significant portion of new car sales, were to lead on electrification.

Taxation policies also play a crucial role in incentivising the uptake of electric cars, but challenges persist. In countries like Germany, carmakers have opposed reforms in company car taxes that would increase the tax burden on petrol and diesel cars. T&E advocates for setting binding electrification targets for corporate fleets, urging the EU to mandate that fleets be 100% electric by 2030.

Krajinska emphasised, “Corporate cars are the perfect candidate for accelerated electrification. They are heavily subsidised through tax cuts, and companies have the financial muscle to invest in EVs. That’s why the EU must come forward with a law that covers a large portion of the company car market.”

In light of these findings, stakeholders are called upon to address the imbalance in electric car offerings, prioritise the development of affordable models, and enact policies that accelerate the transition to electric mobility.