Europe is witnessing a flood of new, affordable electric vehicles (EVs) hitting the market, signaling a shift in the industry’s trajectory. From the Fiat Grande Panda to the Renault 5 and the Citroën ë-C3, a variety of budget-friendly models have debuted in recent months. This surge in offerings is no coincidence, as stricter EU carbon emissions targets set to take effect in 2025 force automakers to ramp up EV sales or face hefty fines.
However, beneath the surface of this progress lies a turbulent landscape. Faltering demand, shrinking subsidies, and fierce lobbying to relax emissions rules have created uncertainty for the future of Europe’s car industry.
2024: A Year of Challenges for the EV Market
While 2024 was a record year globally for EV sales, driven largely by China’s booming industry, Europe experienced a slowdown. According to Matthias Schmidt, an electric car analyst based in Berlin, EV sales across 18 key European markets, including the UK and Norway, declined by 1.4%. 
One major factor behind this dip was the reduction of EV subsidies in Germany, Europe’s largest market. The end of generous incentives, including a €5,000 rebate per vehicle, left consumers hesitant and the market in disarray. France also saw a slowdown in EV sales, compounded by political uncertainty.
Despite these setbacks, certain automakers navigated the storm better than others. Tesla, Polestar, and Volvo have consistently exceeded emissions targets, allowing them to sell credits to competitors. On the other hand, companies like Ford and Volkswagen faced significant challenges, including job cuts and factory closures, as they struggled to adapt to the new regulatory landscape.
Lobbying for Looser Emissions Targets
As automakers grapple with tighter EU emissions standards, lobbying efforts to relax the rules have intensified. The European Automobile Manufacturers Association (Acea) has called for concessions, including the ability to offset missed 2025 targets with future EV sales or introducing a phase-in period for compliance.
Luca de Meo, Renault’s CEO and Acea president, warned that maintaining current regulations could cost the industry up to €16 billion in “investment capacity.” However, critics argue that this figure is inflated and based on outdated sales data. Lucien Mathieu of Transport & Environment (T&E) likened it to “judging an athlete’s performance based on their practice session the year before.”
A Flood of New EV Models
Despite the challenges, automakers appear to have strategically delayed launching new EV models until 2025 to avoid fines under the new rules. In 2024, 45 new EV models hit the market, with at least 35 more expected in 2025.
“Selling a battery electric vehicle (BEV) in December has no value for carmakers under the current framework,” said Will Roberts, head of automotive research at Rho Motion. By delaying sales, manufacturers position themselves to meet stricter 2025 targets.
This strategic timing is expected to result in a sharp rise in EV sales in 2025, with analysts viewing 2024 as a temporary setback in the broader transition to electric mobility.
The Risk of Falling Behind
While lobbying for relaxed rules may provide short-term relief, many experts warn it could have long-term consequences for Europe’s car industry. Chinese EV manufacturers, led by companies like BYD, are rapidly expanding their footprint in Europe. Despite EU tariffs ranging from 21% to 38.1% on Chinese cars, these companies continue to gain market share.
“Weakening the targets will not help Europe’s industry,” said Mathieu. “It would only pave the way for Chinese manufacturers to dominate.”
The Road Ahead
As Europe enters a pivotal phase in its transition to electric vehicles, automakers face a critical choice: adapt to the evolving landscape or risk falling behind global competitors. The surge in affordable EVs offers hope for the future, but the industry must navigate challenges carefully to maintain its position on the global stage.
For consumers, the influx of new models means greater access to affordable EV options, but for automakers, the stakes have never been higher. The question remains: Can Europe’s carmakers seize the opportunity, or will they be overtaken by their international rivals?
