Cheaper EVs will spur rapid growth in demand in Europe, transport lobby predicts

Battery-electric cars could reach a market share of as much as 24 percent in Europe next year as automakers start to release cheaper models to turn around the slump in EV demand, according to the Transport & Environment lobby group.

There is a “glut of new, more affordable models” coming, said Lucien Mathieu, cars director at T&E.

The group said it expects “rapid growth” of BEV sales, citing its own analysis of first-half auto sales and forecasts.

A market share of above 20 percent would be a significant jump from this year.

From January to July, full-electric vehicles have made up 12.5 percent of all new car registrations in the European Union, according to the industry body ACEA.

Europe’s auto industry is struggling to weather a steep downturn in EV demand after governments reduced incentives and Chinese automakers started to expand in the region.

Volkswagen Group is weighing factory closures in Germany for the first time in its history, while France’s Renault has warned that automakers will incur billions in fines if they do not meet ambitious EU climate goals.

According to T&E, automakers should push ahead with EV plans, which include seven new electric models under €25,000 ($27,810) coming to market this year and next.

The Renault 5 and Stellantis’s Citroen e-C3 are among those that will help bridge the gap with stricter 2025 EU emissions, the report said.

While T&E is bullish on future EV growth, workers at plants running below capacity are feeling the pain. Thousands of them brought chaos to Brussels on Monday in a demonstration to show solidarity with employees from an Audi car factory facing possible closure.

In northern Italy, production at Stellantis’ Mirafiori plant slumped 63 percent in the first half due to tepid demand for the electric Fiat 500.

T&E called on EU and national lawmakers to do more to support EV demand with policies such as corporate fleet targets, charging infrastructure and social leasing programs. Meanwhile, automakers struggling with EV targets next year will be able to “pool” with other manufacturers to cut their average emissions further, the T&E added.

For now, Europe’s automakers remain divided over the looming C02 emissions rules. ACEA has not yet taken a formal position on the matter.