Europe falling further behind in e-vehicles revolution

Europe is falling behind in the race to make the most of the electromobility revolution. That is the conclusion from news that the EU is trailing China in investment in e-vehicles, coupled with a T&E report that shows European carmakers are failing to meet their own EV sales targets because of poor marketing and availability of cars for consumers.

With transport lagging behind all other industrial sectors in addressing its climate-changing emissions, the potential for electric cars to make a considerable reduction in greenhouse gas emissions from transport has brought e-mobility centre-stage in EU climate efforts. But even after good percentage growth in recent years, the share of electric vehicles remains small due to lack of investment, supply and marketing. In order to avoid that these vehicles being imported from the world's biggest EV market, China, Europe needs to develop its domestic EV market quickly. Otherwise, technological and employment opportunities will go elsewhere but especially to China.

Information compiled by T&E based on public pronouncements by Europe-based carmakers reveals that the automotive industry has invested seven times more in e-vehicle production in China than in Europe. China has secured €21.7 billion of investment in the past year to manufacture EVs while Europe secured only €3.2 billion. A third more cars are produced in China than in Europe, so market size does not explain the difference in investments. (23.5 million passenger cars were manufactured in China in 2017, compared with 17 million in Europe.)

T&E’s clean vehicles manager, Julia Poliscanova, said: ‘The key to the take-up of e-vehicles is demand certainty. China’s clean vehicles policy requires carmakers to have a certain percentage of their overall fleet as electric, so for a car company to get into the Chinese market, it has to make a minimum number of e-vehicles. By contrast, the EU is proposing modest CO2 reduction targets; that creates indirect, if slow, demand for EVs, but the Commission has still not proposed a meaningful sales target for zero-emission vehicles. It means China could enjoy all the job creation benefits from the EV revolution.’

Not only is there no ZEV target in Europe, but European carmakers are falling short of their own sales targets for battery electric and plug-in hybrid electric cars, according to new information from T&E. While carmakers are blaming a lack of recharging points and government incentives, market data shows that the companies spent miniscule amounts trying to sell electric vehicles – especially in markets where motorists are already willing to consider buying them. Car companies spend just 1.5% of their advertising budgets on ZEVs, and 1.4% on plug-in hybrids.

Despite this, the automotive industry is calling for the EU to abandon a CO2 emissions target for 2025. The current limit for the average new car is 130 grammes per km, which is due to go down to 95g in 2021. T&E is calling for the 2025 limit to remain binding and increase to 20% down on the current target. Future CO2 targets also need a stronger incentive for carmakers to sell zero and low emission vehicles.

T&E’s electromobility officer Julia Hildermeier said: ‘All is not lost for Europe, but it needs to act fast and decisively. It was only last year that China introduced its clean vehicles policy, so Europe can catch up quickly, but it’s clear from the carmakers’ performance on EVs that they need a wake-up call. The European Parliament and EU governments can issue one by setting a binding 20% CO2 reduction target for 2025, coupled with an EV sales target.’