COP27: The Outlook for Europe
6.5 millions electric vehicles (EVs) were sold globally in 2021, with EVs representing 9% of all new car sales during this period. Despite these respectable sales figures, the global pace of the transition to electric transport is incredibly uneven. Some places are progressing rapidly, and have already made significant progress, whilst others are significantly lagging behind the pack.
Different laggard countries face different risks. In manufacturing countries that are yet to fully embrace the transition, jobs and economic growth will be at risk. For countries that rely on the importation of second hand vehicles, the risk is that they become a dumping ground for unwanted polluting vehicles from other countries that are more advanced in making the switch.
It does without saying that a global transition to electric transport is necessary in order to reach global emissions reduction targets. While the surge in the global uptake of EVs over the last two years is positive, it is important that it does not result in complacency. Monitoring and measuring the progress of the transition to electric globally is essential to make sure that all actors and stakeholders are held to account. It is particularly important that we are able to effectively monitor the progress of governments towards targets they have committed to. This can be done by tracking the number of EVs being registered, by monitoring positive changes in policy, and through tracking the development of supporting infrastructure.
As well as monitoring the work of government, it is also important to track the progress of private businesses. Although most OEMs have signalled that they are committed to the goal of electrification, this shouldn't mean their behaviours are not scrutinised. The supply of electric vehicles is crucial to making sure any and all country wide targets are met; tracking the actions of OEMs is vital to ensuring they are meeting supply and playing their role in making the transition happen.
Each country’s transition will be unique, and will be shaped by individual nations cultural, economic, and social context. However, the key indicators that will need to be monitored remain largely the same.
During COP26, 46 countries signed an agreement to phase-out the sale of new petrol and diesel vehicles. 28 countries signed up to a phase out of petrol and diesel vehicles by 2030 and hybrids by 2035, and 11 emerging market countries signed up for a phase-out by 2040. It is important that we monitor the progress of all these countries, as well as others that have not yet made a specific pledge. It has now been a year since these pledges were made. As another COP begins, now is a good time to reflect on how the switch is going, not just in those countries that have set out a timetable, but in the countries that are seeking an alternative path to electrification or have yet to commit to any type of sales ban.
This series will look at each continent and highlight what they have achieved on the road to electrification, how far they have to go, and what is needed to get there.
The Outlook For Europe
The first part of this series examines the transition to electric transport in Europe. Since COP26 the political and social landscape of the continent has been fundamentally changed due to the war in Ukraine. This has exacerbated an energy crisis on the continent, with many countries facing a tough and uncertain winter. Facing an existential threat many countries have focused keenly on how much oil and gas comes from Russia and how exposed this has left them to geopolitical tensions. Many countries have doubled down on their goals for net zero as a means to create energy security, as well as to combat climate change, and despite challenges significant progress continues to be made.
Progress Over 2021
There were some concerns at the start of 2021 that sustaining the boom in EV sales seen over 2020 would be unlikely. However, 2021 was another strong year for EVs in Europe, with the continent being the second largest market for electric cars over the period. According to the International Council on Clean Transportation (ICCT), Europe accounts for a third of all electric vehicle sales globally. Overall, the continent accounted for 10% of all new car registrations in 2021, and the market grew by 66% compared to 2020 sales figures. There was also positive growth in both the electric van and motorcycle markets. Europe hosts some of the fastest expanding EV markets in the world, with seven of the top ten countries for electrifying passenger vehicles located on the continent. However, there are large disparities between individual country’s with some of the fastest to electrify neighbouring some of the slowest.
Race on the Continent: The Quickest to Electrify
Top ten EU countries by % EVs sold in 2021
The top 10 largest EV markets in Europe are dominated by several of the more affluent Northern European countries. At the top is Norway, a country which has carved out a huge lead in Europe, with over double the electric market share of its next nearest rival, Iceland.
65% of all passenger vehicle sales in Norway were electric in 2021 - with hybrids accounting for 22% of all sales, and petrol and diesel vehicles combined accounting for just 13% of the market. Norway has not yet committed to any outright bans on the sale of diesel and petrol cars, but some forecasts put the date EVs become 100% of the market as close as 2025.
Norway’s extensive incentive programmes are widely documented, and many EV models are less expensive to own than fossil fuel vehicle counterparts in the country. Norway currently spends around €15,000 per EV on the road in order to facilitate the switch and is spending around 0.5% of their total GDP on incentives designed to increase take-up. With some of the incentives beginning to be rolled back, many observers will be carefully watching whether or not EV numbers continue to rise.
Europe’s Laggards: The Slowest to Electrify
Bottom ten EU countries by % EVs sold in 2021
The slowest ten European countries to electrify in 2021 match a sharply different profile to the quickest ten. The only northern European country in the bottom ten is Spain, coming in at 6th slowest with only 2.7% of vehicle sales being electric. The rest are from Central and Eastern Europe. The slowest in this data set is Poland, a country which has been slow to cultivate green technology, runs one of the dirtiest grids in Europe, and has the smallest number of EVs on the road. The Polish government is starting to push towards a net zero future, however the country is behind the eight ball and significant challenges remain to be addressed if it is to improve its position.
A Year in Policy
In 2021, the EU enshrined its 2050 net zero goal into law and committed to an additional target of an overall reduction in CO2 compared to 1990s levels. In a landmark decision, the European Union, as part of its FitFor55 packages, has passed amendments to its CO2 regulations which will see cars and vans with a higher tailpipe emissions standard of more than 0g/m banned - effectively introducing a de facto ban on any vehicle that is not zero emission.
This is a significant step forward. It means all 28 countries in the union must now start proactively working towards this goal. This poses a significant challenge, especially for those countries that are currently further behind and waiting for significant improvements in the EV second hand market. This should be used as an opportunity to make sure those countries that are at risk of becoming the dumping ground for polluting vehicles are given the maximum amount of help to ensure this does not happen.
Outside of the European Union, the UK is currently drawing up plans to create a Californian style ZEV Mandate. This mandate will write into law the petrol and diesel phase out goals set for 2030. It is the key tool the British government can use to make sure that the auto-manufacturers are ensuring supply matches demand and help dramatically reduce the upfront cost of an electric car. This policy needs to be ambitious and industry-pushing. If it is not, it risks stagnating growth in the very market it is being designed to drive forward, further pushing the UK down the European leader board for electric vehicle take-up.
Recent Developments: 2022 to Date
Electric Car Sales Comparison, Europe, America, and China, by Transport & Environment
The number of EV registrations decreased across the EU in the first half of 2022. This was in stark contrast to China and the USA, who both further consolidated upon the surge in take-up seen over 2021 over the first part of this year. The EU will be looking to correct this in the second half of the year. Having announced a ban on petrol and diesel vehicles by 2035, the EU must prioritise enshrining this into law as soon as possible. Formalising this ban will signal to both manufacturers and consumers that the EU is serious about the transition, and that there has never been a better time for consumers to buy and manufacturers to sell an electric car.
Case study: Czechia & ‘A Tale of Two Halves’
A country which does not feature in the take-up league tables toward the beginning of this piece is the Central European country of Czechia. These ranking tables were generated using European Environment Agency monitoring data, and Czechia is absent as no such data was available for the country. Reliable data on the country is very hard to find, but it seems that, approximately, only 11,000 EVs are registered in the country. The country also struggles with EV infrastructure; its public charging network is small scale, and is not growing particularly rapidly.
Czechia’s economy is heavily reliant on car manufacturing. The country is the second largest car producer per capita in the world (behind Slovakia). Over 1.1 million vehicles are manufactured in Czechia every year, representing 9% of its total GDP. This means that, despite its laggard status, the transition to electric transport is of vital importance to the future of Czechia’s economy. There were initially some positive signs that EVs were being taken seriously and the government had incentives designed to encourage take-up in place pre-2017. However, subsequent governments have been less positive towards EVs and have rolled these incentives back. Despite this, Czechia has agreed to the EU’s ban on diesel and petrol.
As Europe splits into a tale of two halves, with the richer Northern European nations pulling ahead of the rest in EV sales, countries such as Czechia will need to be supported by other member states in order to fulfil the goal of a diesel and petrol phase-out. Czechia, along with many of its neighbours, has a car market that consists largely of imported, second hand vehicles. It is essential the used vehicle market is allowed to develop, and incentives are concentrated on this vehicle category in countries where they dominate. Rather than becoming dumping grounds for used diesel and petrol cars, these countries need to make sure they become the place where second-hand EVs are sold. Policies such as having strong CO2 vehicle importing legislation, as well as making sure there are no exemptions to the 2035 ban, will be essential in this endeavour.
Moving Forward: Future Prospects Across the Continent
Europe has been a leader in electrification for much of the last decade. In order to continue to lead the transition globally, it must ensure it continues to promote EVs as the way to reduce carbon emissions. Despite the great gains made in the last few years there are some indications take-up may be stagnating and even declining. It is important European countries concentrate on creating legislation which will help cement the transition. Additionally, it is essential that there are open lines of communication between countries who are further ahead in the transition and those that are starting. Cooperation on the continent will be crucial as Europe looks to embrace its electric future.