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Highlights

EU set to propose new transport emission targets in June

Volvo already plans to sell on fully electric cars by 2030

Surging EV sales displacing more oil in transport sector

London — Volvo, Vattenfall and Uber are among 27 companies calling on the EU to ban the sale of new gasoline and diesel cars by 2035 in order to accelerate the transition to electric cars.

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The EU Commission is expected to propose new targets in June as part of its "Fit for 55" package of legislation, which is intended to put the EU on track to cut overall emissions by at least 55% by 2030 and reach net zero emissions by 2050.

Setting a CO2 target for vehicle manufacturers at zero grams of CO2/km by 2035 would allow for the phase-out of gasoline and diesel cars -- including hybrids -- in law, the companies said in a statement.

IKEA, Sky, Iberdrola and ChargePoint are also among the 27 companies.

"A fixed date will send a clear investment signal for car manufacturers, supply chains and infrastructure providers and will enable all businesses to decarbonize their vehicle fleets," the companies said in an 'open call' to EU lawmakers.

But a 2035 deadline would still leave the trade bloc behind most of its biggest members who have already pledged to ban conventional cars from 2030. Germany, the region's biggest economy and largest oil market, Sweden, Denmark, Ireland and the Netherlands plan to end sales of new ICE cars in 2030. Norway, Europe's electric car powerhouse, has the most ambitious plan to phase out combustion-engine cars from 2025. The UK in November brought forward a ban on sales of new gasoline and diesel cars to 2030 to help decarbonize the transport sector.

Volvo, which is planning to sell only fully-electric cars by 2030, said "clear governmental direction and support" is also needed to accelerate the transition to clean, electric mobility.

The Swedish carmaker had previously planned for half of its car sales to fully electric by 2025, with the rest using its plug-in hybrid technology.

Ford has said its cars in Europe will be fully electric by 2030 and Jaguar and Bentley have also unveiled plans to switch to electric cars in the current decade.

Surging EV sales

Europe superseded China as the global driver of electric car sales in 2020 for the first time in five years, after new EV models, incentives by green recovery funds, and CO2 reduction mandates spurred buying interest in electric cars.

European sales of hybrid and electric vehicles continued to surge during the first quarter of 2021, further sidelining the market share of conventional gasoline and diesel cars, Registrations of plug-in hybrid electric vehicles jumped by 175% from the year-ago quarter to 8.3% of total car sales, while hybrid electric vehicles almost doubled their market share in a year to 18.4% of total passenger car sales in the EU, according to the European Automobile Manufacturers Association (ACEA).

Sales of pure battery electric vehicles in the EU rose by 59% to reach 5.7% of total sales.

As a result, outright registrations of new gasoline and diesel cars shrank 17% and 20%, respectively, year on year, ACEA said, to hold a combined 65.4% of the total car sales market.

S&P Global Platts Analytics forecasts that plug-in electric car sales in Western Europe will make up 37% of the global total by 2025, when plug-in EVs on the road in the region will displace around 173,000 b/d of the region's gasoline and diesel demand.

Under its base case scenario, the International Energy Agency expects the global electric vehicle fleet to displace around 2.5 million b/d of oil products by 2030.