Europe's EV market set for rapid growth

Europe’s EV market set for rapid growth

Forecasts for Europe’s new EV market suggest electric models will dominate light‑vehicle sales within the next decade, according to the latest projections from EV Volumes.

Current market share and growth expectations

In 2025, electric vehicles—both battery‑electric (BEVs) and plug‑in hybrids (PHEVs)—made up about 31 % of new light‑vehicle registrations across the continent, up from roughly 24 % the year before. The forecast for this year anticipates the share rising sharply by 2030 and continuing to increase through the mid‑2030s.

The overall light‑vehicle market, which includes passenger cars and light‑commercial vehicles, is expected to grow modestly. EV Volumes predicts a 2.6 % increase in Western and Central Europe in 2026, a notable jump from the 0.1 % rise projected in March. Yet total registrations remain well below the 18 million units logged in 2019, and analysts do not see a return to those levels before 2040.

Regulatory shifts shaping demand

Recent policy moves could accelerate the shift toward electrification. In February 2026, the EU Commission adopted the End‑of‑Life Vehicles Regulation, mandating higher use of recyclable materials in new cars and vans. A parallel proposal would restrict subsidies to EVs built with at least 70 % locally sourced components, a measure intended to boost the European battery supply chain.

On 16 December 2025, the European Commission unveiled its Automotive Package, revising the CO₂ reduction pathway for 2030‑2035. If approved, manufacturers would need to cut tailpipe emissions by 90 % relative to 2021 levels from 2035 onward, instead of the originally planned 100 % cut. The remaining 10 % could be offset with low‑carbon steel, e‑fuels or bio‑fuels, meaning PHEVs and even traditional internal‑combustion models may still be sold after 2035.

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One analyst at the European Commission cautioned that the flexibility built into the 2030 target—allowing a three‑year compliance window—might smooth short‑term market fluctuations but also delay full electrification.

Impact on the “big five” markets

France is projected to see its EV share rise from 31.3 % this year to well over half by 2030, eventually reaching a dominant share by the mid‑2030s. Germany’s electric share is expected to climb from 29.2 % in 2022 to a high level by 2026, reaching near‑universal adoption by 2035. Italy lags behind, with an estimated 17 % EV share in 2026, but forecasts indicate growth to a strong majority by the mid‑2030s.

Spain’s market appears steadier; the EV proportion is set at 22.1 % for 2026 and should reach a high level by 2035. The United Kingdom, which follows its own zero‑emission vehicle (ZEV) mandate, is forecast to hit 38.3 % EV penetration this year, rising to near‑full coverage by 2035. However, BEVs alone are expected to account for just 27.4 % of the market now, well under the 33 % target.

These assumptions rely on national policies staying aligned and the EU’s emissions‑balancing mechanisms holding through the 2030‑2032 window. Any deviation—such as a delay in the automotive package’s adoption—could reshape the outlook.

Potential challenges ahead

Even with optimistic forecasts, the sector faces headwinds. The anticipated dip in demand around 2030 and 2035 reflects manufacturers pulling forward purchases to meet stricter emissions standards. Supply chain constraints, especially for lithium and rare‑earth materials, could also temper growth, though lower lithium prices might offset some pressure.

Automakers may respond by limiting the production of internal‑combustion models to avoid penalties, a strategy that could hasten the transition but also raise concerns about vehicle availability in markets where EV infrastructure is still developing.

The UK’s ZEV mandate has encountered criticism for missing its own targets, prompting calls for an urgent review before the next consultation slated for next year. No official changes have been announced yet.