The European Union’s plan to outlaw the sale of new combustion-engine cars by 2035 was intended as a statement of intent: a bold step to accelerate the continent’s shift towards clean transport. Yet the road to an all-electric future is proving bumpier than Brussels imagined.
Electric-vehicle (EV) sales, once the darling of policymakers and investors, are showing signs of fatigue. Automakers are rethinking strategies, Chinese rivals are circling, and Europe’s electricity grid is creaking under the strain. The green revolution looks less like a straight highway and more like a winding mountain road.
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For a start, consumers are not playing ball. In recent years the EU’s EV boom has been driven largely by corporate fleet buyers, eager to burnish sustainability credentials. But private drivers, faced with higher purchase costs, have been more hesitant.
Governments have not helped: subsidies are being withdrawn in markets from Germany to the UK, leaving EVs looking less affordable. Meanwhile, the second-hand values of EVs have fallen faster than those of petrol or diesel cars, further denting confidence.
What are the prospects for Europe's EV sector?
Industry analysts expect this to change over time. Falling battery prices, which account for as much as 40% of the cost of an EV, and rising costs for internal combustion engines (ICEs), driven by ever-stricter emissions regulations, should push the two technologies closer to cost parity within a decade. Yet for now, the economics remain unfavourable for mainstream consumers— especially at a time of high borrowing costs and squeezed household budgets.
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