EV progress report: EV sales and affordability are reaching a tipping point

BEV sales reached 19% in 2025. We expect targets to drive the market to 23% in 2026 and 28% in 2027

Carmakers representing half the market have already met their 2025-2027 target. All carmakers are expected to reach the 2025-2027 target.

BEV prices decreased 4% in 2025 (or €1,800), driven by the launch of more affordable models. However, carmakers’ focus on larger segments and SUVs keeps prices above 2020 levels, delaying price parity.

If the EU safeguards the 2030 car CO₂ targets, BEVs can reach price parity with combustion vehicles in all segments by 2030. However, if the 2030 target is weakened, carmakers are expected to prioritise margins, delaying BEV price parity after 2030.

Large BEVs have already reached price parity. Small and medium size vehicles would reach it 2030.

Carmakers have confirmed to investors they expect to reach margin or price parity before 2030.

In the EU27 and Norway, the BEV market share reached a record 24% in Q4 2025, and almost 19% over the full year.

After a record year in 2025, EV sales continued to surge in January 2026 - up by around a quarter in the EU.

While carmakers have a 3-year period to meet the target, 3 pools – representing half the market – already met their target in 2025: BMW Group, the Mercedes-Volvo pool, and the Tesla pool which includes Stellantis and Toyota, among others.

Without pooling, Renault, Stellantis alone, and Volkswagen are lagging behind. They are still expected to meet their target by the end of 2027.

Mercedes-Benz is furthest from its target but will comply by pooling.

In 2024, carmakers based their predictions on the flawed assumption that CO₂ values in 2025 would not improve compared to those observed in the first half of 2024.

T&E analysis in 2024 showed all carmakers could comply with the target by increasing BEV sales and cutting sales of polluting ICEs.

BEV prices decreased by 4% in 2025 (or €1,800) compared to 2024, reaching an EU average of €42,700.

The introduction of new, affordable, small BEV models has led to a significant reduction in B-segment car prices, with prices falling by 13% in 2025 (€4,600).

Large and premium segments are already close to or at price parity with combustion cars.

On average, the shift to larger vehicles and batteries has increased BEV prices by €15,500, while cost-reduction in battery and other components has decreased prices by €10,500.

Without carmakers’ strategic shift to bigger vehicles, the average BEV price could have been 23% lower (€33,100).

This decrease happened despite the continued shift towards larger vehicles pushing prices upward (decrease of €5,000 without the shift).

Affordable BEVs, typically priced below €25,000 in their base version, such as the Renault 5, gained traction in 2025 (from 3% of sales in 2024 to 6% in 2025). This shift alone reduced the average BEV price by €2,400.

Lower EV component costs, economies of scale, and learning effects contributed a further €1,900 reduction.

Car CO₂ targets are the main driver for BEV price reductions, mainly via the launch of more affordable models.

If the 2030 target is weakened, carmakers are expected to prioritise margins, and therefore postponing BEV price parity by two years or more (extra BEV price of €2,300 in 2030).

Per segment: Price parity has already been reached in segments D and E in 2024 while price parity in segments A, B and C could be reached by 2030

If carmakers adopt price reduction strategies, BEVs have the potential to reach price parity before 2030, unless carmakers prioritise profit margins over passing on cost reductions to consumers.

In 2021, BloombergNEF forecasted price parity to be achieved in all segments by 2027. But carmakers have delayed price parity by adopting profit-over-volume strategies.

Around 30% of all cars sold in 2030 are expected to be affordable and mass-market BEVs, up from 10% in 2025.

Policies like social leasing could further boost sales of affordable BEVs.

Premium and large BEV models are expected to account for 42% of BEV sales in 2030, down from 54% in 2025.

The battery price has been cut by a third since 2022 for batteries used in BEVs sold in the EU.

Further BEV price reductions will be unlocked by the increasing share of LFP batteries in Europe (50% expected by 2030).

While cells produced in Europe cost up to 90% more than those produced in China today, this cost gap could be reduced by two-thirds if capacity was scaled to achieve economies of scale locally.

The car industry’s proposal for five-year target averaging in 2030 would cause the largest slowdown in the EV market: down to 30%-50% BEV sales in 2030 from 45%-60% with a 3-year average.

Carmakers such as Renault and Stellantis would see their 2030 targets weakened by 20%p and 18%p, respectively, compared to the current regulation.

After years of strong growth the EU public charging network has surpassed 1 million chargers in 2025

By the end of 2025, all countries had met their AFIR targets for that year. 96% of EU countries had already met their 2026 target by this point, one year ahead of schedule.

Most of the Western and Northern EU TEN-T core network is compliant with the 2025 target enabling seamless cross continental travel. Nine countries are over 95% compliant.

Eastern countries still have some gaps but have the fastest growing networks (+25%p coverage in 2025).

While the EU debates weakening its targets, the world is going electric fast: Turkey (17% in 2025), Indonesia (18%), Thailand (20%), China (32%), Vietnam (34%).

In the world's biggest market, China, BEV sales reached a third of the car market.

Sales of PHEVs from Chinese brands have surpassed German premium brands such as BMW or Mercedes.

BYD, with the Dynasty series, and SAIC, with the MG brand, are leaders of the chinese PHEV market in the EU. BYD is the largest contributor to the Chinese PHEV sales growth after 2023.

On average, Chinese PHEVs are fitted with a 23 kWh battery compared to 17 kWh for European brands, giving them a longer electric range.

The total amount of CO₂-free kilometers driven in the EU saw a 7-fold increase from 2020 (6 billion km) to 2025 (46 billion km). The rising BEV share of the fleet is responsible for 90% of the increase.

The EU countries with the most CO₂-free kilometers are large markets such as France (about 13 billion km), Germany (about 10 billion km), followed closely by smaller countries with high BEV penetration and low-carbon grids, like Norway and Sweden.