Crisis in the EU electric vehicle market: S&P Global warns of lower forecasts

Image created by AI

New data from S&P Global show worsening prospects for the battery electric vehicle (BEV) market in EU due to changing economic conditions.

Between the first and second half of 2024, market expectations were revised, leading to a reassessment of trends in the EU, says the Association of European Automobile Manufacturers (ACEA).

Data S&P Global shows a significant downgrade in BEV market share forecasts for 2025, from 27% in the first half to 21%. This reassessment signals a serious lag in achieving EU CO2 emissions targets for 2025, which is directly linked to the decline in market penetration of BEVs, causing concern in all EU capitals, the official statement highlighted.

Electric cars: investments in new solutions, not fines

Martin Kupka, Minister of Transport of the Czech Republic, stated: “Without a focused industrial action plan for the automotive and electric vehicles sectors, we risk falling behind the US and China. The monitoring shows that the EU must have a more flexible system to enable carmakers to achieve ambitious CO2 reduction targets. We must ensure the industry uses its profits to invest in new solutions rather than pay fines.”

The stagnation of the electric vehicle market is significantly increasing compliance costs for manufacturers, according to S&P Global data. For example, meeting emissions targets may require purchasing credits from Chinese and US producers, directing payments to producers outside the EU to the detriment of European industry.

Sigrid de Vries, CEO of ACEA, said: “The growing crisis requires urgent action. All indicators point to a stagnant electric car market in the EU at a time when acceleration is needed. In addition to the disproportionate compliance costs for EU manufacturers in 2025, the success of entire transport decarbonization policies is at risk. We appreciate that several European Commissioners emphasized the importance of regulatory predictability and stability at the confirmation hearings, but stability cannot be an objective in itself. Manufacturers have already invested heavily and will continue to do so. Europe needs to stay on track with its green transformation by adopting a strategy that works.”

What ACEA Requires

The Association of European Automobile Manufacturers (ACEA) has called on EU policymakers to address the high compliance costs associated with the 2025 targets, which are largely caused by factors outside manufacturers' control such as a lack of widespread charging infrastructure and incentives to buy electric cars. A strong, comprehensive and urgent review of the current approach is needed as the current trajectory deviates significantly from previous forecasts. In light of recent economic and geopolitical challenges, ACEA calls for urgent cost reductions in 2025 and a rapid review of CO2 standards for both light and heavy vehicles to ensure the competitiveness of EU industry.

Source link