Car manufacturers are backtracking on electric cars in the wake of slowing global demand, and are extending their scheduled date for ending the production of internal combustion engines. High prices, cutbacks on incentives and a lack of reliable charging points have deterred consumers.

Since February 2023, when the European Union ratified legislation that from 2035 would ban the sale and registration of all vehicles emitting CO₂ emissions, as a central pillar of the European Green Pact, the reality of the electric car market is forcing a change of course that calls into question the strategy established to achieve emission reduction targets.

Electric cars are still selling, but they need to sell in much bigger volumes. The latest report from the European Commission’s Alternative Fuels Observatory (EAFO) shows that electric car penetration in the European Union remains very low. Light-duty vehicles with electric and hybrid engines account for only 6.15% of the total fleet, or around 18 million of the almost 290 million vehicles on the road in Europe.

Moreover, electric vehicle registrations are declining in the European Union as a whole. In the first half of the year, pure electric vehicles accounted for 12.5% of registrations, compared with 12.9% the previous year, according to data from the European Automobile Manufacturers’ Association (ACEA). On the other hand, plug-in hybrid vehicles have lost half a percentage point of market share, from 7.4% in the same period of 2023 to 6.9% this year.

June’s electric car sales data continues this trend, losing 1% of their market share, while registrations of plug-in hybrid vehicles fell to 19.9%. This is a significant slowdown in the electric vehicle market when taking into account that total registrations – electric and combustion vehicles – during this month increased by 4.3%, and by 4.6% for the first six months of the year as a whole, compared to the same period last year.

Sales of electric vehicles have not only fallen across the board in Europe. In Q1 2024, the United States experienced a 7.3% decline in total electric car sales compared to Q4 2023. Only the continued growth of the Chinese car market, which accounts for 60% of global EV sales, is reversing this downward trend.

When the numbers don’t add up

After investing billions of euros in the development of new electric platforms, brands such as Ford, General Motors, Mercedes-Benz, Volkswagen and the Stellantis group have announced that they have experienced a significant drop in electric vehicle orders.

The response from the automotive industry has not been long in coming, and for months now they have been announcing production cuts, factory closures and a rethink of their goals of becoming pure electric vehicle manufacturers by the end of this decade.

In this context, the Volkswagen Group has scrapped the possibility of opening a new plant around Wolfsburg, as planned, and has warned of the possible closure of Audi’s electric car factory in Brussels. Mercedes has cancelled the development of a new electric platform to concentrate its efforts on new, more affordable, combustion-engined vehicles.

But the European industry is playing against the clock – 2035 is the deadline for selling combustion vehicles and, as of today, this ban is still in force. However, the ban faces resistance from several quarters, who question the feasibility and impact of such a measure. MEPs agreed to a derogation until the end of 2035 for manufacturers with small annual production volumes and for the use of synthetic fuels.

Manfred Weber, leader of the European People’s Party (EPP), has called the ban “a mistake” after the European Parliament elections and promised that the party would discuss its repeal “in the coming days”. He is not the only voice among Eurocrats arguing for a less restrictive deal, and ultimately it will be decided in 2027 whether the legislation will be enforced.

From theory to reality

High prices, cut incentives and a lack of reliable recharging points have deterred consumers. The Organisation of Consumers and Users (OCU) points to some of these factors as the main obstacles to the mass adoption of electric vehicles in Spain. According to the organisation, the use of electric vehicles is impractical without a place where they can be recharged daily at an affordable price, either at home or at the workplace.

On the other hand, the exorbitant prices of electric vehicles exclude buyers with lower purchasing power, i.e. the majority of the population in our country and in much of Europe, who demand more affordable vehicles. It is not surprising, therefore, that the Dacia Sandero was the best-selling car in the EU in the first half of the year, to the detriment of the Tesla Model Y, which has fallen from first place in 2023 to eighth this year, with a 26% drop in sales.

Another source of problems for the electric vehicle industry has to do with allegations of planned obsolescence. From batteries that, due to their high cost, are neither repairable nor replaceable, to software updates that give total control to manufacturers to the detriment of independent garages and owners, they limit the lifespan of electric cars, leave users feeling cheated and call into question the green credentials of this type of vehicle.

11Onze is the community fintech of Catalonia. Open an account by downloading the app El Canut for Android or iOS and join the revolution!