European EV sales rally expected, but EU 2030 target looks hopeless

The slowdown in European electric vehicle sales will soon be seen as a temporary blip as they accelerate back to market leadership by 2030 and full dominance by 2030.

This is the view of the professional services company Accenturein a report on how European carmakers can survive the EV revolution. To stay ahead of Chinese and American competition, Europeans need to capitalize on their long-standing brand strength, the report says.

In a market where Chinese EV imports are said to have at least a 30% price advantage, legacy may not be enough. And overall EV sales targets for 2030 based on EU rules to reduce CO2 emissions now look impossible to achieve.

Meanwhile, a series of new electric vehicles from next year will help build the critical mass market.

“There is a temporary slowdown in EV sales in Europe, but over time this adoption curve will rise and accelerate once again,” Juergen Reers, Accenture’s Global Automotive and Mobility Lead, said in an interview.

And electric vehicles will need to show some of their famous acceleration on the road if sales are to reach the levels required by European Union CO2-based rules that require new car sales to be all EVs by 2035.

EU rules imply around an 80% level of electric vehicle sales by 2030. (The UK pushed for 100% by 2030). Most sales forecasts predict a big recovery from the current drought, but unless things change drastically, the 2030 target is in jeopardy.

Schmidt Automotive Research estimates that in 2024 EV sales in Western Europe will reach 1.9 million for a market share of 16.6%. 2025 will see a big jump to 2.7 million (22.2%) as EU CO2 rules tighten. Sales will grow by about 5 million between then and 2030 to 57% of the market, according to Schmidt.

In April, investment bank UBS said Europeans will buy nearly nine million fewer electric vehicles between 2024 and 2030 than expected, as high prices, poor range and tedious recharging discourage would-be buyers. UBS cut its forecast for European EV sales to 8.3 million in 2030 compared to its previous estimate of 9.6 million.

In June, investment researcher Jefferies cut its forecast for Europe to 6.8 million in 2030 from 8.9 million published late last year. Last month it left that forecast intact, but trimmed 400,000 EVs from its 2025 estimate of 3.2 million for a market share of 21%, not 24%. Its latest forecast, published on Friday, cut more than two million sales from its forecast for 2030. The 2030 forecast now stands at 4.7 million for a 35% market share, down from the previous 50%. This is sure to renew the corporate clamor for a radical overhaul of the EU’s CO2 regime.

Sales projections suggest that 2030 targets are impossible. Recent slow sales have mainly been down to high prices. Is there a market place for a practical €10,000 ($10,400) discounted toy 100 mile range, 60 mph, 2+2 supercharged kid sales?

“The number of EV models coming out with prices between €20,000 ($20,800) and €30,000 ($31,250) will increase sales from 2025. I doubt there will be €10,000 models in the foreseeable future. Under €20,000, yes, but €10,000 remains in Europe,” Reers said in the interview.

The BYD Seagull and Wuling Bingo are sold in huge numbers in China for around €10,000. However, the high cost to meet EU safety standards makes them unlikely to appear in Europe, according to Reers.

German manufacturers have said EU CO2 rules will be too difficult to meet and have proposed some mitigation. Reers said he could see the case for some adjustments, but the overall shape should remain intact.

“For an industry with long investment cycles, clarity on long-term goals is very important, but some adjustments to the CO2 reduction path towards the 2035 target in line with the slower adoption of EVs make sense,” Reers said.

As it becomes increasingly clear that the EU’s CO2 targets will be increasingly difficult to meet, cries from critics to lift them are growing. This view says that politicians are not capable of deciding the technology winners and the market must decide between hybrids, plug-in hybrids, more efficient internal combustion engines with so-called electronic fuel, hydrogen fuel cells and of course pure electrics.

“I have some sympathy for that, but from my perspective the future is going to be electric because that’s the most effective and efficient way to get to clean, zero-carbon mobility,” Reers said.

In the report, Accenture said traditional carmakers in Europe are facing increasing pressure as EVs disrupt the status quo. The Chinese threat has receded from the EU tariffs, but the effectiveness of the containment remains to be seen. To combat the threat. European manufacturers must, among other things, capitalize on their impressive brand power.

“To stay ahead, Europeans (manufacturers) need to capitalize on their heritage brands, get the fundamentals of EV manufacturing right by improving supply chains, battery platforms and vehicle manufacturing, and adopt a customer-first, customer-first software approach for future mobility,” the report said.

This brand power must be used to fight for market share in global markets.

“These legacy brands are known for their engineering, manufacturing excellence, design and long-term quality – attributes that resonate with customers and are difficult for newcomers to replicate. For example, consider how BMW recently overtook Tesla in Europe, highlighting that traditional brands can overcome even the most disruptive newcomers,” according to the report.

It remains to be seen how effective the history and quality snubs will be in tough times and against a Chinese 30% price advantage.