Recently, the European electric vehicle (EV) market has encountered an unprecedented development bottleneck, with sales continuing to decline, causing widespread concern in the industry. Faced with this severe situation, the European Automobile Manufacturers' Association (ACEA) has called for urgent action before the implementation of the carbon emission regulations in 2025 to reverse the downward trend in sales, revitalize the competitiveness of the EU automotive industry, and ensure its healthy development.

To achieve the goal of decarbonizing transportation by 2050, the EU has set more stringent caps on CO2 emissions for new cars starting from 2025, stipulating that the average CO2 emissions per kilometer for new cars must be reduced to 93.6 grams, a significant reduction from the 116 grams specified for 2024. This policy not only requires car manufacturers to take more aggressive emission reduction measures but also indicates that the production of a large number of traditional fuel vehicles will face reduction. Given the significant emission reduction effects of electric vehicles, the urgency of the transformation towards electrification is self-evident. However, at present, pure electric vehicles only account for 12.5% of new car registrations in the EU, far from the set target.

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Data shows that in August of this year, the sales volume of pure electric vehicles in the EU decreased by 43.9% year-on-year, and it has been on a downward trend for four consecutive months. Among them, Germany and France, as the two pillars of the EU electric vehicle market, saw sales decline by 68.8% and 33.1%, respectively. This directly led to a year-on-year decrease of 18.3% in new car sales in the EU, setting a record low in nearly three years. Luca de Meo, the chairman of ACEA and the CEO of the Renault Group, warned that if the sales volume of electric vehicles in the EU does not improve effectively, car companies will face huge fines and may be forced to reduce the production of fuel vehicles, thereby exacerbating market competition and the imbalance of resource allocation.

The reasons for the sudden decrease in demand for electric vehicles in Europe are complex. On the one hand, as government subsidies gradually decrease, the cost of purchasing a car has significantly increased, suppressing consumers' willingness to buy. For example, in Germany, since 2023, the subsidy amount for pure electric vehicles has been greatly reduced, directly affecting market sales. On the other hand, the overall economic downturn in Europe has also weakened consumers' purchasing power for high-value goods, and electric vehicles, as non-essentials, are naturally not within the scope of consumers' purchases.

Despite the European car manufacturers' significant investment of effort and funds in the transformation towards electrification, the current market performance is not optimistic. The Volkswagen Group, as a leader in European electrification, has invested more than 80 billion euros in the transformation and plans to continue investing 180 billion euros in the next five years. However, the decline in market sales has directly impacted its financial performance. Relevant data shows that the net profit of Volkswagen Group decreased by 14% in the first half of this year, mainly due to poor sales of electric vehicles in Europe and the United States. Other car manufacturers such as Stellantis, BMW, Renault, and Mercedes-Benz have not been spared, and their profits have all declined to varying degrees in the first half of this year.

Faced with the rapid contraction of the electric vehicle market and the approaching carbon emission regulations, ACEA pointed out that the existing rules did not fully consider the profound changes in the geopolitical and economic environment in recent years, and the law itself lacks flexibility, making it difficult to cope with the rapid changes in society, thereby weakening the EU's competitiveness in the field of electric vehicles. At the same time, the lack of charging equipment and hydrogen infrastructure, competitive manufacturing environment, affordable green energy, tax preferential policies, and secure supply of raw materials, hydrogen, and batteries are also important factors hindering the popularization of electric vehicles. In addition, sluggish economic growth, low consumer acceptance, and distrust of infrastructure further exacerbate market difficulties.

Under the dual pressures of tight deadlines and strict regulations, the European automotive industry is striving to deal with the dilemma of slowing demand for electric vehicles, but some car manufacturers may still face huge fines for failing to meet carbon emission standards. For ordinary consumers, policy changes will undoubtedly increase the cost of purchasing a car. On the one hand, stricter emission standards may push up the price of fuel vehicles; on the other hand, although electric vehicles have long-term advantages in operating costs, the high initial purchase cost still makes many consumers hesitate. Therefore, finding a balance between electric vehicles and fuel vehicles, and guiding consumers to make choices between price and environmental protection, has become an important issue that car manufacturers need to address urgently.

To meet this challenge, ACEA urges the European Commission to take urgent measures to advance the vehicle CO2 regulation review originally scheduled for 2026 and 2027 to 2025, and consider introducing short-term relief plans to help car manufacturers achieve emission targets. At the same time, car manufacturers also call on the government to re-examine the electric vehicle subsidy policy to stimulate market demand.

It is worth noting that while the pure electric vehicle market is sluggish, the European hybrid vehicle market has shown a counter-trend growth, becoming a transitional choice for consumers. Data shows that the market share of European hybrid vehicles has increased from 24% last year to 31.3%, among which the growth of traditional hybrid models and mild hybrid models is particularly significant.

Despite the many challenges faced by the European electric vehicle market, the industry generally believes that the development prospects of European electric vehicles are still broad. With technological progress and cost reduction, the competitiveness of electric vehicles will continue to increase; the EU's firm commitment to green transportation will also provide long-term development momentum for the electric vehicle market. To get out of the current predicament, European car manufacturers and government departments need to work together to face market challenges. On the one hand, car manufacturers need to increase R&D investment and improve product competitiveness; on the other hand, government departments need to formulate more reasonable policy measures to support the sustainable development of the electric vehicle industry. Only in this way can the European electric vehicle market truly usher in the spring.