precedence statistic

Strong Demand for Electric Vehicles in European Countries

Oct 20, 2023

The global electric vehicle market was estimated at USD 170 billion in 2021 and is expected to reach over USD 1,103.17 billion by 2030, poised to grow at a compound annual growth rate (CAGR) of 23.1% during the forecast period 2022 to 2030.

In 2020, Europe’s adoption of electric vehicles and vans rose dramatically. The number of electric vehicles registered in 2019 was close to 1,325,000 up from 550,000 in the previous year. In just one-year, new vehicle registrations increased from 3.5% to 11%. Electric van registrations grew as well, from 1.4% in 2019 to 2.2% in 2020. In 2020, most electric vehicle registrations for automobiles and vans were battery electric vehicles instead of plug-in hybrids. In 2020, battery electric vehicles comprised 6% of new automobile registrations, while plug in electric vehicles made up 5%. Nearly 30,000 electric vans were sold in 2020, accounting for 2.2% of the market share, up 0.8% points from the previous year. The battery electric vehicles accounted for the largest of sales of electric vans. In 2020, non-plug-in hybrid electric vehicles accounted for 13% of new registrations, an increase of 8% over 2019.

In 2020, European cities saw great growth in the electric vehicle sector, although electric vehicle deployment remains unequal. Northern Europe continued to have the highest rate of adoption. The Netherlands, Norway, and Sweden each have 16 metropolitan regions with double the European average electric vehicle share that is 23%. Even though new electric vehicle sales in eastern and southern Europe were rather low, they increased dramatically from 2019 levels. Rome increased its new electric vehicle sales share from 1% in 2019 to 5.5% in 2020.

Adoption of innovative technologies

An electric vehicle is essentially a car with a battery instead of a gasoline tank and an electric motor rather than an internal combustion engine. The electric motor is powered by the electricity stored in its battery. When the car’s battery becomes too low, it must be recharged by putting it in to use grid electricity, much to when your phone needs to be charged. Likewise, plug in hybrids come with a plug and charging connections so that the battery can be charged from the mains. Despite their reduced capacity, some models can travel 20 to 30 miles on electricity alone.

As they create new notions of electrified, connected, autonomous, and shared mobility, industry players are expediting the pace of automotive technology innovation. Over the last decade, the industry has received more than $400 billion in investment, with around $100 billion of it coming since the beginning of 2020. All of the funds will go to enterprises and start-ups that are working on electrifying mobility, linking vehicles, and developing autonomous driving technology. Electric shared mobility will become a real alternative to owning a car as a result of such technological advancements. Electrification will play an essential role in the mobility industry's transition and will present significant potential in all vehicle segments, though the rate and scope of change will vary.

The automobile sector's evolution to electrification will disturb the entire supply chain and result in a considerable shift in the size of the automotive component market. By 2030, key components for electrification, such as batteries and electric drives, as well as autonomous driving, such as light detection and range sensors and radar sensors, would likely account for approximately 52% of the entire market size. Components that are only utilized in internal combustion engine cars, such as traditional transmissions, engines, and fuel injection systems, will experience a considerable drop to around 11% by 2030, roughly half of what they are now. Traditional component players will be forced to change fast in order to compensate for declining revenue streams as a result of such a dramatic transformation.

Growing launch of new products by industry players

The major industry players are launching innovative products with advanced and latest technologies. MG Motors unveiled its future electric vehicle, the MG 4, in February 2022, with plans to introduce it in India later that year. The electric vehicle will have a 61.1 kWh battery pack and a range of roughly 400 kms. BMW introduced its new i4 electric vehicle in November 2021, with a range of 300 to 367 miles. In just few seconds, the car can reach 100 km/h. It has an automatic transmission and is equipped with linked car technologies. BYD released its new second generation e6 for the Indian market in December 2021. By February 2022, deliveries for this model had begun. This MPV has a battery pack with a capacity of 71.7 kWh and a range of roughly 250 miles per charge.

In addition, Tesla introduced two new safety measures in the car in May 2019, that are emergency lane departure and lane departure, which prevent collisions and keep the vehicle in its lane when in autopilot mode. Opel/Vauxhall, a Stellantis subsidiary, introduced the Mokka Electric Vehicle in June 2021, with a maximum range of 209 miles and a 50-kWh battery. The automobile has front wheel drive and has connected vehicle capabilities. BYD introduced 4 new electric vehicle models with Blade batteries in April 2021. Tang EV, Song Plus EV, Qin Plus EV, and E2 2021 are new vehicle models with improved battery safety measures.

Government sector’s response to electric vehicles

To expedite the transition to sustainable mobility, governments and cities have implemented legislation and incentives. Emissions targets are being set more stringently by regulators all around the world. The European Union unveiled its "Fit for 55" program, which aims to combine climate, energy, land use, transportation, and taxation policies to cut net greenhouse gas emissions by at least 55% by 2030, while the Biden administration set a goal of 50% electric vehicles by 2030. In addition to such mandates, most governments are providing EV subsidies. Cities are attempting to reduce private vehicle use and congestion by providing more support for alternate forms of transportation such as bicycles. Paris has announced a $300 million investment to modernize its cycling network and convert 50 kms of vehicle lanes to bicycle lanes.

The incentives of up to $7,500 are available in the U.S. for the purchase of new electric vehicles. Most of these nations also offer incentives for the installation of electric vehicle charging stations. Europe is projected to be the first region to fully transition to electric vehicles. In the near future, most governments in the area have stated intentions to phase out internal combustion engine car sales. By 2030, the UK wants to be the largest electric vehicle market in the world. Norway intends to follow suit and complete the project by 2025. The Netherlands, Iceland, Israel, Denmark, and Ireland have all stated that they intend to use electric vehicles by 2030. By 2035, both Japan and China intend to phase out the sale of internal combustion vehicles. In 2017, the U.S. spent $5 billion to encourage electric vehicle infrastructure, such as charging stations. Many governments are offering cheap or no registration costs as well as exemptions from import taxes, road charges, and sales taxes, in order to encourage people to buy electric vehicles.

Future prospects for electric vehicles

Among all types of transportation, electric two- and three-wheelers are expected to remain the largest electric vehicle fleet. Asia, where two- and three-wheelers are common, is seeing the most growth. The global stock of electric two- and three-wheelers rises from over 290 million in 2020 to over 385 million in 2030, accounting for about a third of the total stock. Electric two- and three-wheeler sales are expected to grow from around 25 million in 2020 to 50 million in 2030, accounting for more than half of total sales. The number of electric light duty vehicles on the road will increase from roughly 10 million in 2020 to around 50 million in 2025, and nearly 140 million by 2030.Electric light duty vehicle's market share rises from less than 1% currently to 8% in 2030 globally. Electric light duty vehicle sales are expected to increase from 3 million in 2020 to 13 million in 2025, and 25 million by 2030. By 2030, there will be about 220 million electric light duty vehicles on the road worldwide, with just 20 million of those being light commercial vehicles, accounting for nearly 15% of the total.

In 2030, electric light duty vehicle sales are expected to reach 45 million, an increase of 80%. The global electric bus fleet is expected to grow from 600,000 in 2020 to 1.6 million in 2025 and 3.6 million in 2030, accounting for 5% and 10% of the global fleet. The electric truck fleet hits 1.8 million in 2030 and 3.9 million in 2040. The percentage of global sales of electric trucks climbs from zero in 2020 to 3% over the projected period. Several strategies and targets for light duty vehicle electrification have been proposed by governments and the private sector, affecting the growth of electric vehicle market in upcoming years.