Jon Lawes, managing director at MHC Mobility, on the bumps in the road for Europe’s EV transition landscape, the voices of manufacturers, and reconciling tensions between regulatory demands and market realities.

Jon Lawes, managing director, MHC Mobility

Europe is on a journey to achieve a climate-neutral economy by 2050 and phase out new petrol and diesel car sales by 2035. However, the continent’s fleet transition ambitions have seen varied progress over the past year.

Businesses have been keeping up their fleet decarbonisation commitments, and legislation like the Net Zero Industry Act and Alternative Fuels Infrastructure Regulations are encouraging steps. But a ‘greenlash’ phenomenon has also led to both the dilution of certain net zero objectives and future policy uncertainty as nations and leaders alike retreat from targets set – from Europe’s e-fuels loophole to a general rollback of EV grants.

Clearly Europe’s transition journey is facing bumps in the road, and, against this backdrop, automakers are increasingly making their voices heard.

A chorus from manufacturers

In Germany, both Volkswagen and Mercedes-Benz have urged the Government to invest more in charging infrastructure. Meanwhile in the UK, Stellantis has criticised the country’s EV sales quota for being out of kilter with demand.

Elsewhere, Renault has called for a ‘European Marshall Plan’ akin to post-WWII financial aid, in a nod to the scale of the transition challenge and its costs. The manufacturer has also urged European policymakers to learn from China’s approach to boosting its EV industry, and for greater cooperation and partnerships between the private and public sector.

BMW has also spoken out against the EU’s CO2 reduction targets, asking for a comprehensive review of fleet emissions legislation. This comes alongside criticism from Volkswagen that the industry shouldn’t pay the penalties for the absence of a framework for the EV ramp-up.

Some carmakers have suggested the EU’s 2035 ICE phase-out deadline could be pushed back, allowing flexibility to steer investment back towards combustion engine vehicles, while others are taking matters into their own hands to address the lack of charging infrastructure in the region.

The fundamental issue

The interventions of Europe’s manufacturing giants point to a more fundamental issue facing Europe’s transition plans – stalling EV adoption. EV sales in March were down 11% from a year ago and with the looming 2035 ICE phase-out deadline on the horizon, Europe must reconcile the tension between regulatory demands and market realities. Policymakers need to meet their transition stakeholders halfway.

One of the biggest hurdles lies in establishing an efficient charging grid infrastructure

Significant interventions are needed for a smooth transition towards a robust EV ecosystem. One of the biggest hurdles lies in establishing an efficient charging grid infrastructure – and one that’s evenly distributed to service the whole continent.

Improving consumer accessibility and bridging the EV cost gap is another considerable challenge. Governments around Europe – including in Germany and Sweden – have been reducing their EV subsidies, slowing progress and setting a regressive precedent. Now, reality is catching up. Without grants, EVs are still too expensive for many drivers.

The inroads being made by cheaper, Chinese-made EVs puts this into sharp focus and has drawn understandable scrutiny. However, this is also a wake-up call for policymakers on the need to make EV adoption a more affordable reality for consumers by maintaining incentive schemes.

And finally, recent concerns about EV battery lifespan, particularly in used cars, have highlighted the need for a battery health standard. Standardising a battery check system poses challenges and has prompted debate on whether to use OEM technology or an independent measure – but ultimately this could boost buyer confidence and resale values, which is good news for the EV switch.

A complex interplay

Things may not be quite as gloomy as some automakers are suggesting. After all, the IEA remains bullish on the outlook for EV adoption, and heightened advocacy is an encouraging sign of manufacturers’ long-term commitment to the transition. However, there is no room for complacency and automakers are clearly at pains to make sure policymakers are seriously engaging with the need for a supportive ecosystem.

Europe’s EV adoption journey is a complex interplay between different stakeholders and macro forces, and underpinning this is the need for a regulatory environment that successfully addresses affordability, infrastructure, and investment.