Europe Electric Vehicle Market - Growth, Trends, Covid-19 Impact, and Forecasts (2022 - 2027)

Europe Electric Vehicle Market - Growth, Trends, Covid-19 Impact, and Forecasts (2022 - 2027)

The Europe electric vehicle market is valued at USD 136.50 billion in 2021 and is expected to surpass a net valuation of USD 449.90 billion by 2027 end, registering a solid CAGR growth of 19.27% over the forecast period.

Electric vehicles are witnessing significant growth owing to the need for addressing future energy requirements. The need to attain sustainable transportation plays a significant role in driving electric vehicle demand. Electric vehicles are coming up as an integral part of the automotive industry and represent a pathway towards achieving energy efficiency along with reduced emissions of pollutants and other greenhouse gasses.

Although, during COVID-19 the market witnessed a steady decline amid the supply chain challenges faced by distributors and suppliers in Europe. In addition, the impact of COVID-19 on the electric vehicle market was inevitable as it affected almost every other industry in the market. However, the electric vehicle (EVs) market is witnessing substantial growth owing to the swiftly escalating year-on-year adoption rate of mild-hybrid electric vehicles across Europe. Soon after Q1 2022, demand for electric vehicles elevated the adoption of electric motors in Europe which has taken the market again to a recovery phase. For instance, in Q1, 2022 Volkswagen Group which includes Volkswagen, Audi, Porsche, Skoda, and SEAT reported a net sale of 99,100 units under its BEV segment. This showcases a steep rise of 65.2 % year-on-year growth rate. In FY2021, Volkswagen Group sold a record-breaking number of its plug-in electric vehicles roughly 762,400 units.

In Europe, a total of 17 countries are offering purchase incentives to boost electric vehicle sales in the region. Earlier this count was 20 before 2020. Moreover, the ongoing government initiatives to robust the charging infrastructure in the region coupled with favorable policies have helped the demand for electric vehicles to witness elevated sales bars. For instance, in October 2021, Germany announced the sanction of funds worth EUR 300 million for developing private charging infrastructure for electric cars in residential buildings. All those including individuals, apartment owners, housing companies, etc. can apply for funding to build the charging station near their houses/apartments.

Considering these developments and factors, Europe electric vehicle market is expected to witness a high growth rate during the forecast period.

Key Market TrendsPassenger Car Segment to Provide Momentum

Europe’s electric vehicle market is witnessing immense growth with rising electric passenger car sales. Europe has witnessed a surge in electric passenger car registration during the year 2020. A significant increase from 3.5% to 11% has been registered in the total new electric passenger car registration, accounting for 6% of total new car registration.

The government is contributing its best to provide momentum to the electric passenger car segment. For instance, By 2024, the Russian government aims to build a market for battery-electric cars by producing at least 28,000 BEVs yearly. The government's plan, which is based on China's Zero Emissions Vehicle program, would involve both manufacturer and customer incentives. It aims for BEVs, which currently number around 10,000 in Russia, to account for at least 10% of the country's light-vehicle market by 2030.

Moreover, key automakers in Europe are consistently providing launches to proliferate the passenger car segment. For instance:

• In September 2022, BYD announced its plans to debut Tang, Atto 3, and Han in the European market. In addition, the company is expecting to reach Norway, Denmark, Netherlands, Germany, and Sweden later in Q4.
• In May 2022, Volkswagen AG and SEAT announced that they will invest EUR 10 billion ( USD 10.6 billion) in a massive electrification plan in Spain, supporting the localization of electric cars and battery output.
• In March 2022, Tesla has inaugurated the fourth Gigafactory in Berlin, which is also the first in Europe. Annually, the Tesla Giga Berlin project is expected to produce up to 5,00,000 automobiles.

Considering these aforementioned developments and factors, the passenger car segment is expected to witness high growth rate over the forecast period.

Germany to Hold Highest Market Share

After China, Germany is the world's second-largest single market for electric vehicles. BEVs and plug-in hybrids (PHEVs) make for 19 percent of the European automotive market, with Germany accounting for 30% of that total. In 2021, Germany's new electric passenger car registrations grew by 83.3 percent to 355,961 battery-electric vehicles. This increased the percentage of electric cars in the German new car market from 6.65% in 2020 to a new high of 13.6 percent in 2021.

The country also offers considerable tax reductions and incentives for electric car and charging station purchases. New electric automobiles costing less than 40,000EUR are eligible for a 9,000EUR government refund, while a 900EUR subsidy from the state-owned development bank is available for the construction of a private electric car charging station. In 2021, German electric car buyers continued to benefit from generous subsidies. Subsidies provided many customers with a €9000 discount on registering a battery-electric vehicle in Germany, making certain models' cost comparable with gasoline vehicles. Fines levied by the EU for high CO2 emissions also aided the adoption of electric vehicles, both battery-electric and plug-in hybrids.

Key mobility and OEM are constructively revamping the charging station landscape in Germany to witness elevated sales bars. For instance:

• In September 2022, NIO officially introduced a battery swapping station in Germany for electric passenger cars. This came after the company announced its launch of NIO ET7 model this year. The station has been located in Zusmarshausen which is the southern part of the country.
• In September 2022, Hertz and British Petroleum announced the signing of a memorandum of understanding for the development of a nationwide charging infrastructure powered with BP pulse. This came after when both companies joined hands to accelerate electric vehicle adoption.

Moreover, frequent product launches and expanding charging infrastructure in Germany is expected to provide momentum to the growing electric vehicle market.

Competitive Landscape

Major players in the Europe electric vehicle market are Ford Motor Company, Tesla Motors Inc., Volkswagen AG, BYD Company Ltd, General Motors Group, Hyundai Motor Corporation, and others.

The key players are collaborating with other players and are investing in new technologies and products to gain significant market share. For instance, In October 2021, Ford invested GBP 230 million in the construction of critical components for the company's electric car plant near Liverpool. Ford's e-drive systems will be manufactured at the company's Halewood transmission factory in Merseyside.

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