The car industry is undergoing its most significant transformation since Henry Ford’s first production line in 1913. Now the progression focuses mostly on electric vehicles that have the potential to reduce the amount of fuel used by internal combustion engines.
The general transmission into a low-carbon future has to happen in many countries. Moreover, it is possible to notice a growth across plenty of nations in e-mobility. No country is fully ready for the EVs change yet but some are close.
Some people don’t like change, but you need to embrace change if the alternative is disaster.Elon Musk
This Electric Vehicle Index (EVI) explains the approach in the transition towards EVs. This involves making electric vehicles more accessible for consumers and investing in new EV models. Countries have to focus on improving charging and energy infrastructures. Also technology can help expand the market for electric vehicles.
Growing world’s market of electric vehicles
2021 was a difficult year for almost every industry in the world. The pandemic had also a big impact on the automotive sector. The global shutdowns caused downgrades in production and supply chain. But some countries noticed a growth in EV adoption, even with the Covid-19 pandemic.
According to McKinsey data, despite the global decrease of EV sales in 2019 and in the first quarter of 2020, Europe increased its market share to 25% by growing 44%. The electric car registrations grew by 41% in 2021, times of Coronavirus.
As per the International Energy Agency, global electric car sales increased by roughly 140% in the first quarter of 2021 compared to the same period in 2020, owing to sales of around 500 000 vehicles in China and around 450 000 in Europe.
Three largest EV markets
- United States
China is the world’s largest EV market (about 50% global sales) and wants to transition to fully electric or hybrid cars by 2035. Latest data from Power Technology shows that in the first half of 2021 China accounted for 12% of global sales, delivering 1.1 million electric vehicles, remaining the world’s leading EV market.
China provides relatively low-cost electric vehicles. Chinese manufacturers, such as BYD, SAIC, BAIC or Geely perform well and, to reach more customers, are able to sell and produce even cheaper EV vehicles (especially for Europe). China is the world’s biggest producer and exporter of batteries and battery components, and Chinese companies like CATL have experienced remarkable growth in recent years. The main technologies they are using are technological patents and wireless charging. And they plan to develop ultra-fast EV charging networks and raise the number of charging stations.
China’s dominance, on the other hand, can be eroding as the business expands in other parts of the world. Europe, for example, is anticipated to significantly increase its battery production capacity in the coming years.
Europe has the second biggest demand for electric vehicles after China. Between 2010 and 2020, in this region 25% of worldwide electric vehicles were produced. In 2020, the European electric vehicle (EV) market grew at an unprecedented rate. As insisted in Update on electric vehicle uptake in European cities, in the European community, more than 1.36 million new electric passenger cars, including battery-electric (BEV) and plug-in hybrid electric vehicles (PHEV), were sold, up 143% over the previous year.
Due to strong sales in 2020, Europe surpassed China as the world’s largest EV market. So if we define EVs as battery-electric vehicles (BEV) and plug-in hybrids, Europe outsold China in EV sales. But when it comes to worldwide EV sales and deployment, China is obviously in the lead. This East Asian country is home to over half of the world’s electric vehicles.
The increase in sales coincides with many European countries establishing dates to phase out fossil-fuel vehicles, as well as the European Commission proposing an effective ban on fossil-fuel vehicles beginning in 2035. Europe has also imposed carbon emission standards and electric vehicle subsidies for carmakers and consumers. With laws regarding priority lanes and parking, as well as the implementation of awareness campaigns, cities are well-positioned to act on convenience and awareness.
The US is one of the third-largest markets for EVs but its sales are only a fraction of those made in Europe and China. The US is attempting to catch up, but it is far behind China and Europe with its penetration rate of only 2%. In the United States, electric vehicles, including hybrids and pure battery electric vehicles, accounted for only 2.3% of new vehicle sales in 2020. Meanwhile, electric vehicles for 10% of new car sales in Europe and 6% in China.
President Biden wants to change that, calling for electric vehicles to account for half of all car sales by 2035 and proposing a slew of policies to reclaim America’s lead in EV manufacturing, supply networks, and research. The US government’s plans are to replace vehicle fleets with electric vehicles. It is a part of the US administration’s environmental commitment.
A new bipartisan infrastructure plan in the United States allocates $15 billion to electric-vehicle infrastructure, electric buses, and public transportation, which is a fraction of President Joe Biden’s prior proposal to spend $174 billion to increase the EV industry.
List of European leading countries in the electric car race
The interest in electric cars varies depending on countries. The ranking shows some countries stepping towards the electric transition with their position, approach and future plans.
- United Kingdom
- Czech Republic
Norway’s approach has been known as the role model in Europe. The government since 1990 put new policies in place to start investing in electric cars. Among other reforms, free parking was offered, charges for toll roads were removed and taxes were lowered. Already now in Norway there are more electric cars being sold than fuel ones. Nobody could have predicted this ten years ago. But it’s not just automobiles that have gone electric; there’s also a network of buses, trains, and trams, as well as a large number of electric bicycles.
Norway is the best prepared with goals, aiming for 100% zero-emission vehicle sales by 2025. The Norwegian approach to the ecological environment will lead the country to ban selling new fossil-fuel-powered cars from 2025.
The Netherlands is one of Europe’s and the world’s leading electric vehicle markets. In 2020, battery electric vehicles (BEVs) accounted for 21% of all newly registered cars, while plug-in hybrid electric vehicles were 4% (PHEVs). Electric vehicles in the Netherlands account for more than half of all EVs on the road. It is a result of the progressive regulations put in place. They offer an exemption on purchase tax and motor vehicles tax till 2024.
In the Netherlands, there is a growth and relatively high rate of EV uptake. The prices for petrol or diesel are relatively high compared to other European markets. This country also provides almost one charger for every 2km of road. But to charge the vehicle takes a long period of time.
Sweden, Iceland, Finland
Nordic countries are featured in the top five as they adapt quickly to reality with electric cars. According to IEA data, EV sales in Sweden doubled between 2019 and 2020. Sweden is exempt from CO2 emission-based taxes up to five years after registration. And like in Norway, these countries reduce annual road taxes and offer free parking or support private parking schemes. In Nordic nations, there is also a public education about EV transition and overall support.
BEV and PHEV sales In Denmark rose significantly from prior years in 2020, accounting for 16.4 % of total new passenger car registrations. Sub-targets were set in 2025 by the Danish Climate Act and national Climate Action Plan to achieve a 70% reduction in 2030 on the route to climate neutrality in 2050.
Denmark put in place new taxation as well to increase the number of green cars on Danish roads. Denmark’s newest plans are to have 1 million green cars by 2030. The amount of diesel cars is reduced as Danes decide on more environmentally friendly choices. They want to replace the future air-polluting vehicles with electric ones or hybrids. The sale of diesel and petrol cars decreased by 6,000 and 5,400 respectively in the first and second quarter of 2021.
In 2021, the Swiss market grew almost to the Norway and Netherlands range. Switzerland, which has a similar gross domestic product (GDP) to Norway, established its own sales record. The federal government’s objective of boosting the share of new rechargeable vehicles to 15% by 2022 had been met as of last month.
According to InsideEVs, Switzerland achieved almost 40% of the overall vehicle market with 9.9% of battery-electric vehicles sales, 8.3% of plug-in hybrids (PHEVs) and hybrid cars of 20.6%. Switzerland wants to become carbon neutral by 2050. Several years ago electric vehicles were seen very rarely in that Alpine country, now want to extend the offer. The most popular model in Switzerland is the Tesla Model 3 as pointed in the diagram.
The government in the UK put in place a proactive approach to achieve the EV transition. The new target concerns a ban on petrol or diesel cars from 2030. But the consumer sentiment is relatively low which is caused by a lack of charging facilities and the price of switching to electric vehicles. It costs on average 1.5 times more to buy an electric car compared to conventional vehicles in the UK.
However, the amount of chargers in the UK is growing rapidly and the focus should be on investing in new fast or ultra-fast chargers as well as providing ease of access to public chargers. To meet these deadlines, expanding electric vehicle adoption will remain the main focus. The British government is increasing the pace of its activities. Switching to renewable energy usage is essentially the only option to cut greenhouse gas emissions by 80% by 2050.
Luxembourg is on a good way for the electric transition. The charging infrastructure situation is comparable to that of other EU reference countries. However, free charging options are limited. There are only a few chargers in Luxembourg with more than 50 kW. That may influence users’ decisions to switch to (plug-in) electric vehicles when the total cost of ownership is calculated, taking into account the purchase price, energy costs, and tax benefits.
As electrive.com insisted that Luxembourg’s government has extended its electric vehicle subsidy scheme for another twelve months, until March 31, 2022. The price of pure electric vehicles will be tied to their electricity use in the future. Some changes will also apply to plug-in hybrid cars. For further mass adoption, a sufficient number of charging stations, properly located in terms of general mobility patterns, and with the necessary power level to allow fast charging, is a must.
Austria had a good start in e-mobility. This is why now they set up even stricter rules like a ban on combustion. Only zero-emission passenger cars, two-wheelers, light commercial vehicles, and larger commercial vehicles will be registered in Austria by 2030 as the country plans to ban combustion by 2030. This is one of the policies included in Infrastructure Minister Leonore Gewessler’s ‘Mobility Master Plan 2030’. The plan, however, is not binding. As Gewessler mentioned, it is a ‘map and compass’ for mobility change.
Currently, the transportation industry accounts for roughly 30% of CO2 emissions in Austria. So to make the idea work there are more than 1,000 fast-charging sites that have to be installed along highways, and park-and-ride lots should be provided with charging stations to help with the transition to electromobility. By 2030 at the latest, 100% of all new registrations in the transport sector for the above-mentioned vehicle categories must be emission-free to meet Austria’s climate neutrality objective by 2040. All new bus registrations must be emission-free by 2032, and all new commercial vehicle registrations above 18 tonnes must be emission-free by 2035.
Still, electric cars are quite expensive in Germany but this country made progress towards the electric transition. Their plans, in regards to the 2030 Climate Action Programme, are to have 1 million charging stations on German roads and to have up to 10 million electric vehicles. Now consumers in Germany can get fairly high financial incentives on fully-electric vehicles.
Even though Germany set a timeline for manufacturers to electrify their fleets, most remain inadequate for net-zero. Also compared to other countries, Germany offers a less strict ban on petrol and diesel cars, put in place only from 2050. However, Germany currently has around one million electric cars on the road but they plan to reach a target of 15 million by 2030, they need to sell 14 million in the next eight years.
In the electricity and natural gas markets, Belgium has made big progress. It has decreased its reliance on fossil fuels while increasing its usage of renewable energy. In addition, the economy of the country is becoming less energy demanding. The government provides a tax incentive to establish charging infrastructure in Belgium in order to achieve the goal of a green fleet. The purchase of a home charging station will result in a tax reduction on the citizen’s personal income tax return.
The Belgian parliament has approved a law proposed by Finance Minister Vincent Van Peteghem to speed up the country’s electrification of business automobiles. At the same time, the intended ban on internal combustion company cars has been scrapped, but EVs are now the only vehicles eligible for tax breaks. But some rules still have to be implemented, like only zero-emission company cars will be eligible for tax breaks starting in 2026.
France is offering financial incentives (discounts on licence plate registration of electric vehicles as well as plug-in hybrids). But there are plans to start banning drivers from using petrol or diesel cars only by 2040. Considering the quite high benefits of owning an electric vehicle, the affordability is quite low as well as EV adoption. As per Impact Economist, electric vehicles account for only 0.6% of all vehicles on the road. The total charging infrastructure is less developed than in other nations.
However, French current incentives for the purchase of a new full-electric or plug-in hybrid vehicle, as well as trade-in bonuses for cleaner new and used cars, will be extended until July 2022 in France.
To encourage EV ownership and make it more appealing to consumers, Portugal has created a variety of tax advantages and grants. In order to make EV ownership more viable, it is also investing in EV charging infrastructure.
The Portuguese market increased from 5% to 16% in electric vehicles sales making Portugal one of the EU countries that want to progress in e-mobility. The Portuguese plan for charging stations is 40 000 by 2025. Portugal EDP decided to increase from 34 to 48 fast to ultra-fast charging stations for the BP and Repsol service stations.
Italian EV sales significantly grew in the last year. Following sustained monthly growth and quarter-end peak registrations, Italy, Europe’s fourth-largest auto market, is on the approach of obtaining double-digit market share for plug-in vehicles.
Also in previous years, the sales of electric vehicles in Italy tripled between 2019 and 2020. Owners of polluting cars have to pay an eco-tax but if they have an electric vehicle, they are exempt for five years. The government in Italy is planning to cut the net vehicle emissions to zero by 2050 and replace pollution models by 2035. Italy plans to develop its expansion of charging infrastructure and raise the level of EV uptake.
According to the UK’s Association for Renewable Energy and Clean Technology (REA), Ireland falls behind other European countries in terms of EV charging infrastructure, which could jeopardise the country’s emissions-reduction targets. Around 2,000 charging stations are located throughout Ireland, especially in urban areas. According to ESB, it owns and operates 1,350 public charging stations that were previously free to use. The survey indicated that only 5% of newly registered automobiles in Ireland last year were electric vehicles. This is far lower than the Netherlands’ 25% and Norway’s 75%.
However, the Department of Transport in Ireland has released information on electric car subsidies for the 2022 year. The plan is to make 100 million euros for this purpose, about double the amount in 2021. Subsidies for fully electric vehicles and vans will be maintained at their current levels. From January 1, 2022, the new regulation will no longer cover purchase incentives for plug-in hybrids. This comes after the PHEV incentives were cut in half to 2,500 euros in July.
The Hungarian government programme is hastening the adoption of green automobiles, placing Hungary quite in a good place in the European EV transition. The number of cars not fueled by fossil fuels climbed at the quickest rate in Hungary’s market in the first half of 2020. In Hungary, 19,000 completely electric vehicles and 20,000 rechargeable hybrids have been put into service, totalling 39,000 green registration plates.
The ownership tax benefits in Hungary are similar to other European countries. Vehicle tax and property transfer tax are eliminated for cars with green plates. Other cars pay a regressive vehicle tax and transfer tax based on the vehicle’s age and engine power. There are parking benefits there and free parking while charging an electric vehicle.
Spain is one of the largest passenger car markets in Europe but the percentage of EV cars are low there. Even though Spain made some progress towards the electric vehicles transition, this country has fewer than two charging stations for every 100km of road and the chargers are slow (speed below 43kW).
However, beginning with the Moves II plan, they want to raise the level of EV uptake and increase the number of private chargers as well as charging stations. Apparently, Spain is preparing to build a new battery and electric-vehicle manufacturing facility with money from the European Union’s pandemic relief fund.
The move to sustainable energy appears to be a huge job for Greece, a country of approximately 10 million people that has only emerged from a horrific decade-long debt crisis and still relies largely on fossil fuels for electricity. But the Greek plans put in place in 2020 are aspiring: carbon-neutral agriculture, solar fields, sustainable tourism, and entrepreneurial start-up campuses could theoretically modernise Greece, creating up to 200,000 new jobs in the energy and environmental sectors. The country hopes to have every third vehicle be electric by 2030, thanks to purchasing premiums and improved charging infrastructure.
On the topic of taxes, in Greece, the registration tax on electric vehicles is removed. Hybrid vehicles have a 50% reduction. But the luxury tax and the luxury living tax are not applied to electric vehicles. Until June 2022, BEVs are exempt from parking costs.
Poland is taking small steps towards the EV transition but it is still far to see the Polish industry become a significant player in this market. Polish cities and towns have among Europe’s worst air quality, and there are growing calls for the government to act quickly to improve it. There are needed more green hydrogen electrolysers, energy storage facilities, and electric cars.
Poland’s mobility policy, issued in 2017, set a lofty goal of 1 million electric vehicles by 2025. European Climate Foundation believes that investments in battery manufacturing facilities, such as LG CHEM’s extensive lithium-ion manufacturing plant in Wroclaw, could position Poland’s economy higher to electric powertrains, and domestic firms like Solaris are establishing themselves as among Europe’s leading developers of low-carbon vehicles. But in terms of how well prepared Poland is for the electric vehicle revolution, it holds a place at the bottom of the list.
Romania, Slovakia, Czech Republic
The five key East European markets are Poland, Hungary, Slovakia, Czech Republic and Romania, where Romania, Slovakia and the Czech Republic score the lowest and their EV improvement rate is the slowest. These countries are taking the smallest steps towards the electric vehicle transition.
Electric vehicles (EVs) are the key to a net-zero carbon future and the electric market is growing vastly. Compared to last year, almost all countries across the continent showed increased EV readiness. The nations positions in the ranking differ depending on the amount of BEVs and PHEVs purchased in each country, as well as based on the energy infrastructure, the number of electric chargers, and the consumer sentiment to e-mobility.
Here are the main conclusions concerning the countries mentioned in the ranking:
- In 2020 and 2021, Europe and China were the dominant EV markets, with over 80% of plug-in hybrid and battery electric vehicle sales.
- Despite Covid-19, electric vehicles sales have grown strongly, especially in Europe.
- EV barometer 2021 data shows that also the number of electric vehicles purchasers in Nordic countries is rising, with Norway taking the top spot.
- According to LeasePlan, Norway, the Netherlands and the United Kingdom are the most prepared to handle the EV transition.
- Luxembourg, Austria and Belgium are performing better in the EV approach than they used to in the past.
- France and Portugal are in the right places to improve whereas Italy and Spain have promising investments.
- According to Virta data, an electric vehicle charging platform, Germany, France, the United Kingdom, and Spain have a significant number of slow chargers in Europe. Other European countries are joining the electric vehicle revolution by adding fast(er) chargers. The expectation in Europe is to have 14 million EVs by 2025 and 100% cars to be electric from 2035.
EV Predictions for 2022
The global car industry undergoes the most significant technological revolution in a century. Most countries have to focus on the EV transition in order to avoid being left behind. But the real race doesn’t happen between nations but it is a race against time. Despite the big progress, electric vehicles still account for barely 1% of the world’s automobile fleet.
In 2022 more countries might start to plan or focus on developing the approach towards electric cars. Enterprises and manufacturers will design more electric cars to reach their goals by the end of the new year. But the question is if electric cars will take over by 2030? With some of the countries’ plans, it is possible but will not happen yet globally. First, retailers have to focus on providing more electric vehicle chargers, especially faster ones. And most important, make the EV more accessible for customers.
It is also important that governments of the above and other nations will focus on new technologies. Smart charging of electric vehicles, i.e. the usage of cloud-connected charging devices, is another trend that’s constantly growing in the EV field. Smart EV charging provides increased convenience and control over electricity consumption for both company owners and consumers.