The European electric vehicle market, which has been experiencing a slump, is expected to see a turnaround in 2025. This is due to the introduction of more affordable EV models by carmakers to comply with stringent emission regulations.
What Happened: The Transport & Environment lobby predicts a surge in EV sales in Europe from 2025. This is attributed to car manufacturers’ plans to launch more cost-effective EV models to meet the increasingly strict emissions standards set by the European Union.
The current preference for combustion-engine vehicles and high-margin EVs has led to a slowdown in EV sales. However, carmakers are holding back more affordable models until the new EU CO2 limits come into effect next year.
Lucien Mathieu, the cars director at Transport & Environment, noted that “Europe's clean car rules are the continent's strongest driver of EV sales and more affordable vehicles.”
Automakers are facing pressure from a cooling EV shift as incentives dwindle and vehicle prices stay high, coinciding with the expansion of Chinese carmakers in the region.
Volkswagen AG is selling so many combustion engine vehicles that it is set to exceed its emissions allowance next year. This situation has led CEO Oliver Blume to request leniency from European regulators, according to a Bloomberg report.
According to T&E, manufacturers such as Volkswagen, Stellantis, and Renault plan to launch at least ten affordable EVs priced between €20,000 ($21,472) and €25,000 from late this year through 2027.
See Also: Fisker’s Bankruptcy Leaves Investors Asking Hard Questions About EV Viability
Why It Matters: The European EV market has been facing challenges, with a significant downturn in sales raising concerns about the region's ability to achieve its climate goals. The introduction of more affordable EV models to meet stricter emission regulations could be a turning point for the market.
The European Union has also introduced new tariffs on electric vehicles manufactured in China, a move that could pose challenges for Chinese automakers. However, companies like Warren Buffet-backed BYD are expected to remain competitive, according to experts.
Chinese carmakers have reportedly been urging Beijing to increase tariffs on European gasoline-powered cars in response to the EU’s restrictions on Chinese-made electric vehicles. This move is seen as a retaliatory measure against the European Union's export limitations on Chinese EVs.
Image Via Unsplash
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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