Allied Market Research forecasts the European electric vehicle market to hit $143,084.57 million by 2027. This figure represents a 25.4% CAGR (Compound Annual Growth Rate) from 2020.
For reference, the electric vehicle industry’s market valuation was only $25,489.81 million in 2019 in the region.
Government’s initiatives to alleviate the adverse effects of COVID-19 in Europe’s EV industry
The COVID-19 pandemic significantly impeded Europe’s electric vehicle industry to expand. It prompted automakers across the region to shut down operations to slow down the spread of the virus.
In effect, there was also no sufficient skilled workforce to support the factories’ operations due to lockdowns.
Fortunately, most European countries managed to alleviate the COVID-19 impacts and ease their safety protocols.
Some national governments also imposed various strategies to stimulate the EV industry again, EIN Presswire noted.
For instance, Germany provided a 3% tax reduction on EVs acquired from July 2020 to December 2020. It also implemented a 10-year tax exemption for sub-$49,084 EVs and an $11,043.9 subsidy until December 2021.
Meanwhile, France imposed up to $8,589.7 in subsidies for sub-$55,219.5 EVs for qualified households.
In addition, the British Government announced VAT and road tax exemption for sub-$61,355 clean energy vehicles, on top of the $3,681.3 subsidy.
Spain imposed a 75% tax cut for EVs in major cities, including Barcelona and Madrid. It also offered EV subsidies of $4,908.4 – $6,135.5.
Italy provided a 5-year tax exemption and a 75% tax cut for electric vehicles. Moreover, its bonus-malus program also offered up to $7,362.6 subsidies per EV with less than 70g of CO2/km.
The report further noted that all nations included in the EU 27 and the UK (except Lithuania) have EV-related tax reductions, subsidies, or both.
In effect, the European EV industry managed to recover and strive despite the adverse effects of the COVID-19 pandemic.
Growth drivers
The global push for low-emission vehicles substantially boosted the European EV industry. It has implemented strict rules and regulations for vehicle emissions, effectively urging customers to join the e-mobility transition.
The mentioned government initiatives have also contributed to EV adoption in the region. It attracted global automakers to invest in the country and launch multiple EV models matching local customers’ preferences.
EV giant Tesla’s presence in the region also partly boosted the market with its innovative models that Europeans love. Tesla also established its robust and reliable Supercharging network in the region.
Challenges
The expensive production cost in the region remains one of the top barriers to the wide adoption of clean energy vehicles in Europe.
In effect, it keeps EV prices higher than the customers’ buying power. The lack of affordable EV models discourages price-conscious buyers from making the purchase.
Moreover, insufficient public charging infrastructures also largely impede the shift to e-mobility. Customers often suffer from range anxiety due to the lack of reliable public chargers across the nation, the report outlined.
See Also:
- Europe’s EV sales grew more than 50% YoY in July to 819,725 units YTD
- Tesla achieves more balanced monthly sales in Europe, caution urged to avoid misinterpretation
- Europe: Plug-in car sales nearly hit the 200,000 mark in April 2023
- Tesla relaunches famous referral program in Europe to boost Q1 sales
- Volkswagen increases European BEV sales goal to 80% in 2030
Despite the challenges, Europe has advanced as one of the leading countries in electric vehicle uptake. It must continue implementing effective policies and initiatives to sustain this growth toward the forecasted 25.4% CAGR to $143.08 billion in 2027.
