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2035: the year when no thermal vehicle may circulate in the European Union
Ten European countries, dozens of municipalities and five major car manufacturers have all announced their ambition to start promoting electric cars in the next few years.
Following the UK's commitment to phase out internal combustion cars from 2030, and ahead of the Glasgow World Climate Summit in November 2021, all eyes are now on the European Union, which is preparing its vast package of climate legislation scheduled for July.
Whether for economic, climate or industrial reasons, the electric car is an ideal compromise for transport. One question remains: can the EU move to 100 % electric vehicle sales by 2035 in order to meet the European "green contract"? That's what BloombergNEF (BNEF) has tried to find out.
The study in brief
- Electric vehicles will reach the same price (excluding incentives) as equivalent petrol models between 2025 and 2027.
- The electric vans reach price parity at the earliest, in 2025.
- Small electric city cars will be the last in 2027
- The saloon cars and Electric SUVs reach parity in 2026.
- In 2030, the average electric car will cost 18 % less than the equivalent petrol car, excluding tax.
This fall in prices can be explained by two main factors
- Firstly, the fall in battery prices, which should drop by 60 % over the decade (from €120/kWh in 2020 to around €50/kWh in 2030). The 100$/kWh barrier, considered a key point for the affordability of electric cars, will be reached in 2024 (€80/kWh).
- The second major factor is the move to production lines dedicated to low-energy electric vehicles (and to a new vehicle architecture), which enable carmakers to cut costs by 10 to 30 % thanks to simpler assembly, standardised battery modules and other components, and higher volumes by producing several models of low-energy electric vehicles on the same chassis.
These results lead to a clear conclusion: electric cars and vans will be the cheapest option in six years' time, enabling EU drivers to save money as they make the transition to more sustainable mobility.
Varying levels of adoption of electric vehicles in different countries
BNEF has modelled the possibility of moving to pure electric 100 % vehicle sales across Europe, in the northern, western, southern and eastern country blocks.
The results show that with adequate political support (what T&E calls the Green Deal scenario), thermal cars and vans can be progressively replaced in all European countries between 2030 and 2035.
To achieve this objective as effectively as possible, sales of electric vehicles to battery must achieve :
- 22 % of sales in 2025
- 37 % of sales in 2027
- 67 % of sales in 2030
Although sales are increasing considerably in line with these projections, not all EU Member States are following the same trajectory.
The Nordic countries will be the 1st to achieve carbon neutrality for their car fleets
- Northern Europe to reach 100 % of EVs by 2030
- Western Europe - which includes Germany, France and the UK - is expected to reach 100 % EVs by 2034.
- This scenario is compatible with the UK's current commitment to a phased withdrawal, which only allows plug-in cars from 2030 and zero-emission cars from 2035.
- Germany is clearly the market leader in this group, and can achieve 100 % of zero emissions even sooner if it adopts ambitious policies.
- France has introduced EPZ
- Southern Europe (Italy, Spain and Portugal) is following a similar trajectory to the Western group, and will achieve total elimination of emissions one year later, in 2035.
- Finally, the market for battery electric vehicles in Eastern Europe (12 countries including Poland, Greece and Romania) will see the fastest growth in the late 2020s, as these countries are starting from a long way off. As the second-hand market remains large and the new car market represents only 10 % of the EU total, growth in new electric car sales is slow in this region. However, very rapid take-up rates are expected around 2030 and beyond, as electric models become cheaper and more commonplace.
The law of supply and demand
The BNEF study also highlights the importance of rapidly stepping up production of electric vehicles.
Industrialising the production of electric vehicles is crucial to achieving the price inflexion expected for 2025-2027 in all categories of light vehicles.
Current CO₂ targets for 2025 and 2030 for carmakers are well below the purely market-driven trajectory of the 2020s.
In short, the supply of electric vehicles needs to increase if the battery market is to operate at full capacity and drive prices down.
The role of governments in decarbonising the car fleet
Taxation of electric vehicles must be advantageous for Europeans
In addition to supply-side regulation, other policies, such as appropriate tax incentives and the rapid roll-out of recharging infrastructure, are needed to achieve the BNEF scenarios.
With regard to taxationThe rapid growth in electric car sales means that heavy purchase subsidies are becoming financially unsustainable.
Instead, the tax systems of bonus-malus which use the malus on CO2-emitting cars to pay for subsidies on zero-emission models - already in place in France, Sweden and Italy - are a much better way to steer car buyers away from CO₂-polluting engines and towards zero-emission models.
The network of charging points needs to be expanded
An adequate and continuous recharging network - at home, at work, in public spaces and on motorways - is also essential. The European infrastructure law (AFID) should fill certain gaps in this respect, in particular by setting binding targets for all EU countries so that drivers in Romania and Poland, and not just in Germany, have access to an adequate recharging network. recharging infrastructure public. However, as most recharging takes place in private places such as the home or the workplace, there are many levers at national level to make the approval and installation process quick and easy.
This is why a direct link between AFID, on the one hand, and the ambition levels of European vehicle CO₂ standards, on the other, as recently suggested by the European car lobby, is not appropriate.
In conclusion
Europe clearly has the capacity to ensure that the whole of its vehicle fleet or 100% electric.
In some cases, such as corporate fleets and municipal fleets, an electric car is already the best option today.
The current risk is that the players in the EU automotive industry will not act quickly enough in the 2020s to conquer the future market and develop the electromobility value chain (and the corresponding jobs) in Europe. But this seems an unlikely possibility, as manufacturers are all aware of the cause. For example, the Toyota has announced its first electric SUV 100%. The manufacturer was hostile to electric vehicles and gave in under pressure from its shareholders to offer 100 % electric vehicles.
