European carmakers sold 38% more electric cars in the first seven months of the year, ensuring that all but Mercedes-Benz are on track to comply with the EU’s 2025-27 emission targets, new T&E research finds [1]. However, the two-year extension of the targets allowed carmakers to take the foot off the gas and will lead to 2 million fewer electric cars being sold between 2025 and 2027 than under the original deadline [2]. T&E called on the EU Commission to stand firm over the 2030 and 2035 targets when it hosts a strategic dialogue on the future of the automotive industry this Friday.
BMW, Renault and Volkswagen are expected to meet their 2025-27 emissions targets, according to T&E’s EV Progress Report. BMW would be 13 grams per kilometer (gCO₂/km) overcompliant with the maximum average emissions allowed under EU law between 2025 and 2027. Stellantis and Renault would be 9 and 2 gCO₂/km overcompliant respectively, while Volkswagen will narrowly comply with no margin (0 gCO₂/km) to spare.
Mercedes-Benz, which holds the presidency of the EU auto lobby ACEA and is the loudest opponent of the EU targets, is the only European car manufacturer that would fail to reach them on its own. It would be 10 gCO₂/km undercompliant and would need to pay Volvo Cars and Polestar to purchase credits from them in a so-called pooling deal.
The EU is under pressure from carmakers to weaken their 2030 and 2035 emissions targets and earlier this year it gave a major concession to the industry by extending the 2025 target deadline by two years. Carmakers responded by increasing the price premium of electric models over combustion cars to 40% in June, up from 30% in early 2025 [3]. As a result of the target extension, 2 million fewer electric cars are expected to be sold in the EU between 2025 and 2027 [2].
This is despite positive market dynamics which are pushing electric sales. Battery costs are set to fall by 27% between 2022 and the end of this year and are set to decrease by another 28% by 2027 compared to 2025 levels, T&E forecasts [4]. Charging infrastructure has been deployed on 77% of the EU core highway network and all Member States have already met or surpassed the number of public charging points required by the EU’s 2025 target [5].
“OEMs are painting a terrible picture because they want their targets weakened. But the reality is that electric car sales are surging and emissions rules are key to that equation. By sticking to the agreed rules, Europe can give its automotive industry a fighting chance in the global EV race. But weakening the targets could see other manufacturers go the way of Mercedes which is falling behind on electrification and must buy credits from its competitors,” Lucien Mathieu, T&E cars director, said.
While the EU is discussing further relaxing of its emission rules, global markers are going electric fast. India, Mexico, Indonesia and Thailand have EV market shares of 5%, 5%, 13% and 24% respectively [6]. In the world’s largest car market, China, BEV sales share will surpass 30% by the end of 2025. These markets will expand rapidly in the next decade and unless Europe’s carmakers rapidly catch up now, Chinese manufacturers will dominate.
“European carmakers are living in cloud cuckoo land if they think China will stop innovating while they try to prolong the technology of the past. If the European Commission allows car manufacturers to stall on EV progress, Europe will lose ground on another key industry to global competitors. We need a European automotive industry that leads on one of the critical technologies of the 21st century, not one that puts us on the path to becoming a car museum,” Lucien Mathieu added.
Notes:
[1] To forecast car emissions, T&E used Globaldata’s Global Hybrid and EV sales Forecast, Q2 2025 database on the expected sales for each powertrain plus an in-house analysis that takes into account the emission reduction resulting from improvements to ICE models.
[2] In Q2 2025, GlobalData updated its BEV sales forecast for the period 2025–2027. The figures differ by 2 million from those in the Q2 2024 version of the forecast.
[3] Based on data reported by Bloomberg Intelligence.
[4] T&E estimated battery price reductions for the EU based on BloombergNEF global battery price evolution data and the expected growing share of cheaper LFP batteries.
[5] T&E quantified charging infrastructure deployment based on Eco-movement, ChargeUp Europe and EAFO figures.
[6] Market share for H1 2025 provided by GlobalData, except Vietnam which is from EV-Volumes and the Vietnam Automobile Manufacturers’ Association.
