New data from S&P Global has revealed a deteriorating outlook for the EU’s battery-electric vehicle (BEV) market, prompting industry leaders and policymakers to call for urgent action. The market share forecast for BEVs in 2025 has been revised downwards significantly, from 27% to 21%, indicating a potential setback for the EU’s CO2 emission targets.
The Czech Transport Minister, Martin Kupka, warned that without a targeted industrial action plan, the EU risks lagging behind the US and China. He advocated for a more flexible system to help auto manufacturers meet ambitious CO2 reduction targets, suggesting that profits should be invested in new solutions rather than paying penalties.
The European Automobile Manufacturers’ Association (ACEA) echoed these concerns, with Director General Sigrid de Vries stating, “The looming crisis necessitates urgent action. All indicators point to a stagnating EU electric vehicle market at a time when acceleration is needed.” De Vries emphasised the disproportionate compliance costs for EU manufacturers and the risk to the success of road transport decarbonisation policies.
ACEA has consistently urged EU policymakers to address the steep compliance costs associated with the 2025 targets, citing factors such as the lack of widespread charging infrastructure and EV market stimulus. The association calls for urgent cost relief in 2025 and an expedited review of CO2 standards to safeguard EU industry competitiveness.
However, the study has drawn sharp criticism from some industry analysts, who question the methodology and conclusions of the report. Matthias Schmidt, an automotive analyst, challenged the analysis in a LinkedIn post, suggesting that it overlooked key factors and presented a skewed perspective.
Schmidt argued that the report did not adequately consider the role of plug-in hybrid electric vehicles (PHEVs) in meeting emission targets. He pointed out that PHEVs with extended ranges can comply with various fiscal EV-only range legislation tightening from 2025 and contribute to the ZLEV-adjustment mechanism credits, which allows for a weaker fleet target to be achieved. Additionally, Schmidt noted that eco-innovations offer adjustment mechanisms, and the extended rollout of more efficient hybrid and mild hybrid vehicles will also help meet emission targets.
“The conclusion is that 2025 fleet emission targets aren’t just linked to BEV mixes,” Schmidt wrote. “This is an average target to be met and is technology-neutral, so it is by no means a ZEV mandate such as in the UK.”
Schmidt also drew a parallel with a similar study published by PA Consulting in 2019, which he said proved to be almost totally baseless. He cautioned that big consultancies do not always provide the best analysis.
Other critics have also weighed in, expressing concerns about the report’s implications and the potential use of the data to lobby for policy changes that may not be in the best interest of the environment or consumers. Environmental groups have warned against diluting emission targets, stressing the urgency of addressing climate change.
Despite the criticism, the data highlights a growing concern among industry leaders and policymakers about the EU’s ability to meet its emission targets. The coming months will likely see intense debate and potential policy adjustments as the EU grapples with these challenges.
