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Carmakers Failing to Deliver Affordable Electric Cars, Holding Back EV Adoption — Analysis

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  • Only 17% of electric cars sold are in the more affordable “B” segment — compared to 37% of new combustion engines;
  • The offering of large and luxury electric models outnumbers smaller BEVs by 3 to 2;
  • Accelerating company car electrification could increase overall BEV market share from 15% to 22%.

Just 17% of electric cars sold in Europe are compact vehicles in the cheaper B segment, compared to 37% of new combustion engines, new analysis finds. Carmakers are slowing EV adoption by prioritising sales of larger, more expensive electric cars, according to Transport & Environment (T&E), which conducted the research. Only 40 fully electric models were launched in the compact segments (A and B) between 2018 and 2023 compared to 66 large and luxury models (D and E), according to the report.

In Europe 28% of electric sales are in the large car D segment, compared to just 13% of new combustion cars, according to T&E’s analysis of 2023 sales figures from Dataforce. The average price of a battery electric car in Europe has increased by 39% (+€18,000) since 2015 while in China it has fallen by 53% [1]. This is due to European manufacturers’ disproportionate focus on large cars and SUVs, which carry a price premium.

Anna Krajinska, vehicle emissions manager at T&E, said: “European carmakers are holding back the mass market adoption of EVs by not bringing affordable models to consumers faster and at volume. The disproportionate focus of manufacturers on large SUVs and premium models means we have too few mass-market cars and too high prices.”

Of the sub-€25,000 models carmakers have planned, only 42,000 vehicles are likely to be produced for the European market this year, according to T&E analysis of production data from GlobalData. But despite the lack of affordable models, the EU market share of battery electric cars still grew by 2.5 percentage points to 14.6% in 2023.

However, EU BEV market share could already be at 22% if the corporate car segment, which accounts for most new car sales, were leading on electrification, the T&E analysis also finds.[2] Currently, with an electric uptake of 14%, the corporate sector is lagging behind the private market (15%).

Taxation plays an important role in incentivising electric car uptake, but in countries such as Germany, carmakers have opposed the reform of company car taxes that would increase the tax burden on petrol and diesel cars [3]. Setting binding electrification targets for corporate fleets will also be key to accelerating electrification in Europe. T&E is calling on the EU to set targets for fleets to be 100% electric by 2030 at the very latest. The EU Commission has opened a public consultation on greening company cars.

Anna Krajinska said: “Corporate cars are the perfect candidate for accelerated electrification. They are heavily subsidised through tax cuts, and companies have the financial muscle to invest in EVs. That’s why the EU must come forward with a law that covers a large portion of the company car market, by regulating leasing giants and companies with big car fleets.”


[1] Jato Dynamics. (2023) EV Price Gap: A divide in the global automotive industry. Link.

[2] T&E analysed a scenario where the corporate fleets market leads on electrification by selling at least 50% more BEVs than in the private market. This has already been achieved in 9 countries: Austria, Belgium, Czech Republic, Hungary, Greece, Luxembourg, Poland, Slovakia and Slovenia.

[3] EKM (2023). Policy Brief: Den Hochlauf der Elektromobilität stärken. Page 16. Link. Regarding the proposal “BIK taxation of a company car will be increased from the current 1% to 1.5 to 2%”, this German Transport Ministry document notes that the VDA (German automotive industry association) “rejects this instrument”. The VDA’s website also defends the current tax advantages for combustion engine company cars.

Article above courtesy of T&E website.


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Transport & Environment (T&E)

Transport & Environment’s (T&E) vision is a zero-emission mobility system that is affordable and has minimal impacts on our health, climate and environment. Created over 30 years ago, we have shaped some of Europe’s most important environmental laws.

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