Green shoots for Europe's struggling EV market in 2025

While President Trump has the US automotive industry scrambling to keep up with a flurry of directives targeting renewable energy and EVs, figures and forecasts out for 2025 suggest promising growth across Europe.

According to automotive trade body Mobility Sweden, the country can expect to see an increase in new electric car sales, accounting for around forty percent of all registrations in 2025, a return to the share seen in 2023 after a significant dip in 2024. Mobility Sweden attributes this bounce-back to Swedes’ strengthened financial positions as well as the expected release of several new and cheaper EV models.

According to Mobility Sweden’s chief economist Sofia Linder, while the uptick will benefit both the environment and fuel-paying consumers, further government inducement is needed to raise the EV uptake rate further.

Tighter regulations incoming

And 2025 well be the year such inducements really tip the scales across Europe. The next phase of the EU’s ever tightening emissions targets regime comes into force this year, on the road to 2035’s full ban on non-zero-emissions vehicle. Under the new restrictions, auto manufacturers have to lower even further their average emissions across all new cars sold, meaning a stronger emphasis on electric and hybrid vehicles.

With these inducements, as well as apparent bounce-backs in household spending, forecasts for 2025 so far are looking positive. According to EV research firm Rho Motion, the continent including the UK can expect to see around 3.5 million EV sales, up fifteen percent from 2024.

This is still a couple points below the global forecasted increase of eighteen percent, but is nonetheless a marked improvement from 2024, which saw a reduction in sales of three percent from the year before.

The growth in Europe "almost all stems from the emissions legislation," Charles Lester, data manager at Rho Motion, tells Impact Loop. The trend has been ongoing since 2021 when rules began to tighten, he said, flattening in 2024 amid Germany ending its subsidies programme, but picking up as the rules tighten further in 2025. At the same time, says Lester, the expected releases of new and cheaper models "will certainly help, because it gives consumers more choice to purchase these vehicles because there's more electric availability."

Zooming in around Europe reveals a mixed picture. In France, subsidies for EV purchases are expected to be reduced, though details are still pending as the country’s contentious budget continues to be stalled. Spain is expected to continue its own subsidy scheme, tightening up the system to fix the payment delays seen in recent years. Research from Germany suggests an uptick in EV purchases again, for similar reasons to Sweden.

But of all European countries, Norway clearly holds the crown for the electric transition. So far this year, EVs have accounted for over 96 percent of all new car sales. This puts it on track to become the first country to go fully electric over the next couple of years, something the government pledged to do in 2017. Auto giant Volkswagen has already stopped selling non-electric vehicles in the country.

While Norway has several advantages over its European neighbours, chief among them plentiful renewable energy and a strong grid, the optimistic forecasts for 2025 suggest Norway may ultimately prove merely a frontrunner, rather than an exception, in Europe’s electric transition.

Still standing somewhat in the way of that full transition, says Charles Lester, is price-point. "EVs in North America and Europe are still more expensive than the (internal combusion engine) counterpart, especially compared to China."