Report

EV progress report: Which EU carmakers are on track for 2025-27 targets?

Lucien Mathieu, Yoann Gimbert — September 8, 2025

The EU’s CO₂ regulation for cars and vans is the backbone of Europe’s automotive climate and industrial policy. Data from the first half of 2025 show that the EV transition is on track.

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Key findings:

  • All European carmakers are on track to comply over 2025-2027 thanks to a surge in their BEV sales - reaching 25% share over the 3-year period (18% in 2025);

  • However, with the EU’s delay of the 2025 target, carmakers took their foot off the gas, leading to a shortfall of 2 million BEVs (over 2025-2027). Evidence shows that carmakers inflated BEV price premiums as CO2 targets got relaxed;

  • Despite carmakers’ attempt to slow down the EV market, structural battery price decreases will continue to power the EV transition. By 2027, EV battery prices are expected to drop more than over the past three years;

  • Charging coverage is surging in line with BEV penetration: All EU countries have already exceeded their 2025 target for the total number of charging points and almost 80% of the core EU highway network is covered;

  • While the EU is discussing the 2035 target, global markets are going electric fast: Mexico (5% BEV share in H1 2025), Indonesia (13%), Thailand (24%), China (30%), Vietnam (42%). Europe is losing ground in the global EV race.

Europe now faces a decisive choice: to either lead the global BEV race and confidently enter the electric age or risk falling behind in the fossil fuel era. Weakening the 2030-35 CO2 targets would dismantle all investments and efforts on EVs while China would extend its lead on EVs.

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38% Increase in BEV sales of European carmakers (Jan-Jul 2025)

Breakdown of insights

European carmakers’ BEV sales are growing

18% Projected BEV market share by 2025

The EU is in the midst of an electric car boom

2 million BEV shortfall due to weakened regulation

Carmakers have slowed down BEV uptake as the EU delayed the 2025 target

40% BEV-ICE price premium (Jun 2025)

Carmakers reversed their lower BEV price strategies as soon as EU delayed the 2025 CO2 target

Volkswagen can comply with a 22% BEV share over 2025-27 and a focus on ICE improvements. The launch of new affordable BEV models such as the ID.2 should secure compliance

All carmakers are still expected to be compliant with their CO2 targets

Mercedes-Benz is expected to keep pooling with Volvo Cars and Polestar over 2025-2027. Pooling allows Mercedes-Benz to focus on profitable and polluting ICEs.

Mercedes-Benz is the only European carmaker group lagging behind the EU targets, and would need rely on pooling

Mercedes-Benz is falling behind its competitors and trying to deflect the blame onto the EU. However, BMW's success demonstrates that the problem lies with Mercedes' strategy, not the EU.

Mercedes-Benz becomes Europe’s EV target laggard

Thanks to lower battery prices, carmakers are launching new affordable models with a starting price below €25,000

Sales of affordable BEVs should double in 2025 compared to 2024

> 2⁄3 Share of affordable models that are expected to be made in Europe

At least 19 new affordable BEV models are expected to be available in Europe in 2027

- 28% Projected decrease in European battery prices (2027 vs. 2025)

European battery prices are set to continue falling rapidly

1.1 million Expected number of public chargers in 2025

BEV growth is supported by a growing charging network

22 out of 27 EU countries have at least twice as much charging power as required by law

All EU countries meet their AFIR target in 2025

77% Share of core highway network that is already covered with ultra-fast charging

The TEN-T network coverage is on track in most markets

30% BEV sales share in China, the world's biggest market

‘Emerging’ markets are going electric fast and catching up with the EU

With the US market closing to EU imports due to new 15% tariffs (up from 2.5%), the most accessible opportunities are now in Asia, South America, and Africa - regions that also host the fastest-growing BEV markets.

Global prospects for European carmakers lie in the fast-growing EV market

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