New Regulations Drive EV Growth in Europe

• The European Union (EU) passenger car market is expected to experience a substantial transformation in the coming years. This is primarily due to the acceleration of the electrification of passenger cars, driven by the tightening of fleet CO2 regulations imposed on manufacturers. By 2030, battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) are projected to account for just under three-quarters of the market sales.
  
  
• The market share of internal combustion engine (ICE) vehicles is expected to decline significantly, reaching just 1% of sales by 2030. They will be partially replaced by mild hybrid electric vehicles (MHEVs) and hybrid electric vehicles (HEVs).
  
  
• The share of diesel vehicles is also expected to continue its decline, reaching only 2% of the market by 2030, down from 24% in 2021, and more than 50% in 2015. Gasoline vehicles will persist for longer but will gradually decrease as electric vehicles dominate the market.
  
  
• These propulsion trends are expected to lead to a significant decrease in average CO2 emissions, from 115.8 g/km in 2021 to 38.6 g/km in 2030. However, some car manufacturers may struggle to meet the regulatory targets, leading to potential financial penalties.
  
  
• The strong growth in sales of electrified vehicles will drive a massive increase in demand for lithium-ion batteries. The annual requirement is expected to grow from 69 GWh in 2021 to 515 GWh in 2030, with BEVs dominating the demand.

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