The European electric vehicle (EV) market is facing a series of complex challenges in 2025 and beyond. With uncertainties surrounding tariffs, geopolitical tensions, and changing regulations, forecasting the region’s performance has become increasingly difficult.
EV Volumes, a leading forecasting agency, predicts that Western and Central European light-vehicle registrations will only grow by 0.65% in 2025, significantly lower than previous estimates. The forecast for 2026 shows a slight improvement, with a projected year-on-year growth of 2.1%. However, achieving pre-COVID-19 levels in the European automotive market remains a distant goal, with deliveries expected to fall short of 2019 levels for the foreseeable future.
One of the key drivers of change in the European EV market is the introduction of stricter CO2 emissions standards. These regulations are pushing automakers to increase their sales of battery-electric vehicles (BEVs) and phase out internal combustion engine (ICE) vehicles. The industry is expected to see a surge in EV sales as manufacturers lower prices, introduce new models, and ramp up production to meet the targets set by the European Union.
Despite the challenges, there are positive signs for the EV market. Affordable BEVs like the Citroen e-C3 are entering the market, while global EV leader BYD plans to expand its presence in Europe. Chinese manufacturers are also eyeing opportunities in the region, signaling a potential increase in competition and innovation in the EV sector.
EV Volumes forecasts a 15.1% year-on-year increase in European EV sales in 2025, with BEVs accounting for 72% of the total sales mix. The market share of EVs is expected to grow further in 2026 and beyond, reaching a significant share of new vehicle registrations by 2027.
However, challenges remain, including the implementation of tariffs on BEVs imported from China and the slow uptake of electric light commercial vehicles (LCVs). Despite these hurdles, EV Volumes anticipates significant growth in the EV market over the next decade, with EVs projected to represent 99.4% of the European light-vehicle market by 2040.
In conclusion, the European EV market is undergoing a period of rapid transformation, driven by regulatory changes, technological advancements, and shifting consumer preferences. While challenges persist, the outlook for EVs in Europe remains positive, with continued growth expected in the coming years.
