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Plug-in electric vehicles in Europe

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Evolution of annual registrations of plug-in electric passenger cars in Europe showing the type of power train (battery electric or plug-in hybrid) between 2011 and 2021. Sources: European Automobile
Mariordo (Mario Roberto Durán Ortiz) · CC BY-SA 4.0

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Europe had about 5.6 million plug-in electric passenger cars and light commercial vehicles on the road at the end of 2021. The European stock of plug-in cars is the world's second largest after China, accounting for about 32% of the global stock in 2021.

Europe also has the world's second largest light commercial electric vehicle stock, 33% of the global fleet in 2020, As of December 2020, France listed as the European country with the largest stock of light-duty all-electric utility vans, with about 62,000 units, followed by Germany (29,500), and the UK (almost 15,000).

The plug-in passenger car segment had a market share of 1.3% of new car registrations in 2016, rose to 3.6% in 2019, and achieved 11.4% in 2020. Despite the segment's rapid growth, as of December 2020, only 1% of all passenger cars on European roads were plug-in electric.

As of December 2021, Germany led cumulative sales in Europe with 1.38 million plug-in cars registered since 2010, followed by France (786,274), the UK (~745,000), Norway (647,000), and the Netherlands (390,454). Norway has the highest market penetration per capita in the world, also has achieved the world's largest plug-in segment market share of new car sales, 86.2% in 2020, and 22% of all passenger cars on Norwegian roads were plug-ins by the end of 2021. Germany was the top selling European country market in terms of annual volume from 2019 to 2023, but was overtaken by the UK in 2024.

In 2020, and despite the strong decline in global car sales brought by the COVID-19 pandemic, annual sales of plug-in passenger cars in Europe surpassed the 1 million mark for the first time. Also, Europe outsold China in 2020 as the world's largest plug-in passenger car market for the first time since 2015.

Government incentives and policies

The European Union and several national, provincial, and local governments around Europe have introduced policies to support the mass market adoption of plug-in electric vehicles. A variety of policies have been established to provide direct financial support to consumers and manufacturers; non-monetary incentives; subsidies for the deployment of charging infrastructure; procurement of electric vehicle for government fleets; and long term regulations with specific targets.

Financial incentives

Financial incentives for consumers aim to make plug-in electric car purchase price competitive with conventional cars due to the still higher up front cost of electric vehicles. Among the financial incentives there are one-time purchase incentives such as tax credits, purchase grants, exemptions from import duties, and other fiscal incentives; exemptions from road, bridge and tunnel tolls, and from congestion pricing fees; and exemption of registration and annual use vehicle fees. There are also several non-monetary incentives such as allowing plug-in vehicles access to bus lanes, free parking and free charging.

As of May 2019, tax benefits and incentives for electrically chargeable passenger cars were available in 24 out of the then 28 European Union member states. Nevertheless, only 12 member states offered bonus or grant payments as purchase incentives, and most countries only grant tax reductions or exemptions for all-electric cars. Croatia, Estonia, Lithuania, and Poland offered no incentives.

French bonus–malus

France introduced in 2008 a bonus–malus CO2 based tax system that penalize fossil-fuel vehicle sales. This a revenue-neutral policy mechanism allows to balance government support with direct revenues from the taxes collected from sale of particularly polluting and/or greenhouse gas emitting cars. The bonus applies to private and company vehicles purchased on or after 5 December 2007, and is deducted from the purchase price of the vehicle. The malus penalty applies to all vehicles registered after 1 January 2008, and is added at the time of registration.

EU average fleet CO2 emissions

European Union Directive No 443/2009 set a mandatory average fleet CO2 emissions target for new cars, after a voluntary commitment made in 1998 by the auto industry had failed to reduce emissions by 2007. The regulation applies to new passenger cars registered in the European Union and EEA member states for the first time. A carmaker who fails to comply has to pay an "excess emissions premium" for each vehicle registered according with the amount of g/km of exceeded.

The 2009 regulation set a 2015 target of 130 g/km for the fleet average for new passenger cars. A similar set of regulations for light commercial vehicles was set in 2011, with an emissions target of 175 g/km for 2017. Both targets were met several years in advance. A second set of regulations, passed in 2014, established a new target of average CO2 emissions of new cars to fall to 95 g/km, scheduled to be phased-in in 2020 (95%), and fully apply from 2021 onward. The target for light-commercial vehicles was set to 147 g/km by 2020.

In April 2019, Regulation (EU) 2019/631 was adopted, which introduced CO2 emission performance standards for new passenger cars and new light commercial vehicles for 2025 and 2030. The new Regulation went into force on 1 January 2020, and has replaced and repealed Regulation (EC) 443/2009 and (EU) No 510/2011. The 2019 Regulation set new emission targets relative to a 2021 baseline, with a reduction of the average CO2 emissions from new cars by 15% in 2025 (81 g/km), and by 37.5% in 2030 (59 g/km). For light-commercial vehicles the new targets are a 15% reduction for 2025 and a 31% reduction for 2030.

The 2019 Regulation also introduced an incentive mechanism or credit system from 2025 onwards for zero- and low-emission vehicles (ZLEVs). A ZLEV is defined as a passenger car or a commercial van with CO2 emissions between 0 and 50 g/km. The regulation set ZLEV sales targets of 15% for 2025 and 35% for 2030, and manufacturers have some flexibility in how they achieve those targets. Carmakers that outperform the ZLEV sales targets will be rewarded with higher CO2 emission targets, but the target relaxation is capped at a maximum 5% to safeguard the integrity of the regulation.

Since 2018, European carmakers have been fully embracing electrification of their car models to further reduce CO2 emissions, and comply with the targets established by the EU. The EU regulations have resulted in a significant growth of sales of plug-in electric cars since 2019.

In 2020, despite a strong decline of overall car sales in all countries as a result of the COVID-19 pandemic, the plug-in car segment has increased significantly its market share. According to the European Automobile Manufacturers Association (ACEA), during the first quarter of 2020, and due to the COVID‐19 outbreak, the market share of new passenger plug-in electric cars in the 27 EU countries was 6.8%, up from 2.5% in the same period in 2018. In April 2020 the European plug-in market share rose to 11%.

Norwegian case

In order to reduce Norway's greenhouse gas emissions, its government pledged in 2012, among other measures, a target for the average fleet CO2 emission rate of new passenger cars of 85 g/km by 2020, 10 g/km lower than the European Commission's targets for 2021.

As a result of its fast growing EV market penetration, average fleet CO2 emissions have been falling in Norway every year. Norway achieved in 2016 the European target set for 2021, with average CO2 emissions for all new passenger cars registered in 2016 of 93 g/km, down 7 g/km from 2015. Average CO2 emissions for all new passenger cars registered in 2017 was 82 g/km, down from 93 g/km in 2016, and below the government's target of 85 grams set for 2020. Norway achieved its transportation emissions target three years before the pledged deadline.

Annual average new passenger car fleet CO2 emissions reached an all-time low in 2019 with 60 g/km, 11 g/km lower than in 2018. Nevertheless, the average for gasoline-powered cars declined only 1 g/km from 2018 to 93 g/km, while diesel-powered cars increase their average CO2 emissions from 131 g/km in 2018 to 134 g/km in 2019. The net gain in the overall reduction of average fleet CO2 emissions is the result of the large market share of 42.4% achieved by the all-electric segment in 2019.

Phase-out of fossil fuel vehicles

Several European governments have made long term pledges with compliance targets within a specific timeframe such as ZEV mandates and the phase out of internal combustion engine vehicle sales. For example, Norway set a national goal that all new car sales by 2025 should be zero emission vehicles (electric or hydrogen).

Some cities are planning to establish a partial or total ban on internal combustion engine vehicles or to implement zero-emission zones (ZEZ) restricting traffic access into an urban cordon area or city center where only zero-emission vehicles (ZEVs) are allowed access. In such areas, all internal combustion engine vehicles are banned.

As of May 2020, cities planning to gradually introduce ZEZ, or a partial or total ban fossil fuel powered vehicles include, among others, Amsterdam (2030), Athens (2025), Barcelona (2030), Brussels (2030/2035), Copenhagen (2030), London (2020/2025), Madrid (2025), Milan (2030), Oslo (2024/2030), Oxford (2021–2035), Paris (2024/2030), and Rome (2024/2030).

Other policies

There are also measures to promote efficient vehicles in the Directive 2009/33/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of clean and energy-efficient road transport vehicles, and in the Directive 2006/32/EC of the European Parliament and of the Council of 5 April 2006 on energy end-use efficiency and energy services.

The 2009 Directive applies to contracting entities under the obligation to apply the procurement procedures set out in Directives 2004/17/EC and 2004/18/EC, as well as operators of public passenger transport services by rail and by road under a public service contract within the meaning of Regulation (EC) No 1370/2007 of the European Parliament and of the Council of 23 October 2007. These entities and operators should take into account lifetime energy and environmental impacts, including energy consumption and emissions of CO2, and of certain pollutants, when purchasing road transport vehicles with the objectives of promoting and stimulating the market for clean and energy efficient vehicles.

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