The European Car Market Could Become Completely Sustainable by 2025, with the Adoption of Smaller EVs

According to a report drawn up by Transport & Environment, with the spread of smaller vehicles, priced at €25,000, the European car market could become completely sustainable by 2025.

The drop in production costs and battery prices would make electrification possible for the mass market: a particularly relevant option also in light of the latest statements by the President of the EU Parliament, Ursula Von Der Leyen, who announced the launch of the anti-subsidy investigation into electric vehicles from China. 

Meanwhile, the countdown for the stop to sales of vehicles with internal combustion engines in Europe continues: by 2035 they will no longer be allowed.

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The search results for the European car market

According to a survey by YouGov for Transport & Environment, among those interviewed who intend to buy a new car in the next 12 months in Italy, 27% declared that they will most likely buy an electric car. Of those who are most likely to buy a combustion car, 14% said they would switch to electric if a small BEV model costing €25,000 was available on the market. Of those who didn’t know if they would buy an electric car, 5 out of 38 said they would go electric if they were offered a small, economical model. 

If these intentions were also applied to the automotive market, the advent of affordable small BEVs would bring the sales share of fully electric cars to 38%. In this scenario, it would be possible to sell 136 thousand more electric vehicles per year in Italy, replacing the equivalent combustion pollutants with new vehicles. For many, however, the main problem is related to costs. 

“Prices are one of the main barriers preventing motorists from switching to electric. A small BEV vehicle costing €25,000 could change the cards on the table and encourage the adoption of electric cars by the general public – declared Carlo Tritto, Policy Officer of T&E Italia – Bringing these models to the market quickly and in quantity will be fundamental for European manufacturers who want to compete with Chinese rivals who are already following this path by offering low-cost small electric cars.”

Electric SUVs bring more profits to manufacturers

Again according to an estimate by Transport & Environment, the six big European car manufacturers have abandoned the production of cheaper small cars, such as the Fiat Punto, the Peugeot 208, the Citroen C1, or, more recently, the Ford Fiesta, diverting their production on bigger, more expensive cars to chase profits that have grown much faster than inflation. 

According to the report, in fact, between 2019 and 2022 the net profits per vehicle went from -€40 to €1,920 to €510 and €8,940, taking inflation into account. This result was achieved mainly by prioritizing the sales of SUVs, larger and more profitable cars. Sales of this type of car, which in 2010 represented just 9%, today represent over half (53%) of all sales taking place in Europe. 

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(Featured image by mmurphy via Pixabay)

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First published in StartupItalia. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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