Electric cars: outlook for 2025 in Europe

2025 looks set to be a pivotal year for electric cars in Europe. Sales of electric cars plummeted in 2024 due to a combination of factors. The year 2025 will see the introduction of smaller, more affordable models, which will be crucial. Either sales will pick up again, stimulated by these new models, or they will stall, and with them the plan for the transition to all-electricity. Against this backdrop, IntoTheMinds has carried out a major B2C and B2B survey of fleet managers on their expectations of electric vehicles.

Contact IntoTheMinds market research agency

Case study: Europcar

In 2024, we cconducted B2C and B2B market research for Europcar on the outlook for the electric vehicle market and mobility in general. CAWI and targeted vehicle owners (B2C) and fleet managers (B2B) conducted these quantitative market research studies. You will find the project sheet for the B2C project below. Please do not hesitate to contact us for the B2B project sheet.

Vehicle registrations down across Europe

Several factors can explain this slowdown:

• an uncertain economic context
• an uncertain regulatory environment: ACEA is still hoping to get the European Commission to backtrack on the 2035 deadline, and in member countries, the application of certain deadlines relating to low-emission zones has already been postponed.
• high interest rates are putting the brakes on credit purchases
• public subsidies are being cut to the bone in an unsustainable budgetary context
• carmakers have sought to increase their margins thanks to supply problems at Covid, making their vehicles even more unaffordable.

In France, for example, new car registrations fell by:

• 3.17% compared with 2023
• 22.4% compared with 2019

Disparities between manufacturers

The major European automotive groups are feeling the pinch in different ways. Stellantis, the leading group in France, recorded a 9.1% fall, while Renault and Volkswagen also posted declines of 3.6% and 5.7% respectively.

The winner in 2024 was Toyota, whose sales rose by 18.57%.

The big loser in 2024 was Tesla. Its sales fell by 35.42% in France and 41% in Germany. They were penalized by the lack of renewal of the range and the decline in electric vehicles in general. In Germany, the end-of-purchase incentives had a particular impact on American manufacturers.

European drivers no longer believe in the electric transition. They have become cautious and suspicious and don’t want to rush into anything.

Electric car registrations are down sharply

In Europe, sales of electric vehicles are following the general trend. They fell by 5% in 2024. They now account for just 13.4% of total registrations. In France, the situation is a little better since, despite a drop to 29,1000 units, electric cars still account for 16.9% of registrations (compared with 16.8% in 2023).

Electric models are perceived as expensive despite their energy efficiency. Their growth now seems to be held back by problems relating to price, range, and recharging infrastructure, which is still inadequate. The price of public charging points is sometimes so high that it is more expensive to drive an electric car than a petrol one. This market research shows the charging point sector is a pricing wild west.

Government pressure does nothing to change the sales dynamic. This is a notable fact. No matter how much the authorities increase the pressure, notably by introducing more and more low-emission zones, the revolt rumbles on. Consumers see replacing a car that works perfectly well with a much more expensive model as an injustice.

An electric transition held back by fluctuating public policies

Today, the transition to electric cars is as much a question of money as of beliefs. On the one hand, European customers cannot afford electric cars. On the other hand, they are also distrustful of public policies. The latter have become illegible.

There is, of course, the reduction or abolition of government subsidies, which affects the ability to change cars. In France, for example, the ecological bonus has been cut in 2024, and the penalty for polluting vehicles remains frozen. These decisions are sending contradictory signals to consumers and are putting the brakes on purchasing intentions.

Then, there are customs duties for electric vehicles imported from China. Consumers do not understand why they are being forced, on the one hand, to change an internal combustion vehicle that works, while on the other, they are being prevented from buying Chinese vehicles at the best price. While these protectionist measures may protect European industry, they risk driving up the price of electric vehicles that are already too expensive for ordinary people.

And finally, there’s the official timetable, which nobody believes in, and the increasing number of deviations from the timetable. The introduction of Low Emission Zones has been postponed, and the 2035 deadline for banning internal combustion vehicles in Europe may be postponed.

European drivers no longer believe in the electric transition. They have become cautious and suspicious and don’t want to rush into anything. Our survey showed that they consider technology insufficiently mature and do not want it.

A mixed but hopeful outlook

Despite everything, the transition to electric vehicles remains a priority for Europe, and for the moment, the 2035 deadline has not been officially called into question.

Salvation will only come from a massive drop in the price of electric cars. Carmakers and suppliers have made investments. However, it is not certain that this will be enough in the current economic slump.

Hope could come from the launch of smaller, more affordable electric cars. Examples include the Renault R5 electric car and the Citroën e-C3. This segment is under-exploited, and opening it up could result in additional sales volume, boosting the market share of electric cars to 23% by 2025.

Conclusion

In conclusion, 2025 will mark a decisive turning point for European electric cars. If sales continue to fall, the transition to all-electric could become nothing more than a European bureaucrat’s dream.