EV Index 2024 Q4: positive indicators for the year ahead

Overview

The results for the final quarter of 2024 suggest a more positive outlook for electric vehicle adoption in Europe in the year ahead. Despite setbacks in some areas, the EV Index from Sophus3 recorded overall improvements in each of the Big 5 European markets during Q4.

EV Index 2024 Q4

Figures in brackets show change from 2024 Q3

Market-by-market summary

Within the Big 5 grouping, the UK achieved the highest score at year-end with a noticeable improvement in the level of consumer interest in EVs over recent months. The market saw a huge surge in EV sales in the final month of the year, with registrations of BEVs (battery electric vehicles) up 57% over the previous year. However, much of this gain can also be attributed to sales incentives from manufacturers struggling to achieve the targets set under the government’s ZEV mandate. Overall, car makers were tasked with delivering a 22% share of EVs in their sales mix. The UK industry association, the Society of Motor Manufacturers and Traders (SMMT), stated that over the course of the year manufacturer discounts equal to £4.5 billion were deployed to achieve this result. If correct, that total equates to £10k+ per individual vehicle sold, clearly an unsustainable figure.

Germany delivered a very different story: this market ended 2025 with a lower overall Index rating than it had enjoyed at the end of the previous year. German sales of EVs were hit by the abrupt removal of subsidies in December 2023. (EV buyers had received over 10 billion euros in assistance since 2016 when support was first introduced.) Whilst registrations of EVs dropped by a staggering 27% during the year, consumer interest did rally during the final quarter.

Spain appears to be gaining momentum in its transition to e-mobility, and whilst consumer interest still remains confined to a narrow group, other factors that can drive EV adoption do appear to be falling into place with the market showing the lowest differential in pricing between EV and ICE (internal combustion engine) vehicles. Spain also recorded the largest relative addition to the country’s public charging network during Q4.

France made only minimal progress over the year: EVs accounted for 16.9% of all car registrations in 2024, which although above the European average still represented a standstill compared to 2023. France’s progress towards a transition to EVs is both a little disappointing and surprising given the early embrace of the technology by the country’s car manufacturers and government. Of the Big 5, France also  has the most complete public charging infrastructure — the factor often cited as the main barrier to EV adoption in other markets.

France has developed an extensive and accessible public charging network.

Italy continues to trail the other Big 5 markets when it comes to its readiness to embrace EVs, with an Index score of just 25 out of a possible 100 — precisely where it was 24 months ago. Government support for EV purchase was offered in June of last year, but this was depleted in a matter of hours. Since then electric vehicle makers have struggled to find buyers. The Italian car market finished the year with BEVs accounting for barely 4% of all sales (the share across the EU as a whole was 13.6%).

In contrast to this rather patchy picture from Europe’s largest car markets, both of the outlier markets that we track — Norway and The Netherlands — recorded substantial progress along their EV transition path.

Norway remains the only market to achieve an EV Index score of 100 signifying that the factors in play combine to make it just as easy for a consumer to acquire and use an electric car as it is a fossil-fueled equivalent. In 2024 EVs accounted for 89% of all cars sold; the country is on track to achieve 100% sales of zero emission vehicles by the end of 2025. Taxation has been the central policy plank to drive the EV changeover, funded—ironically—by revenue from its huge oil and gas reserves. But commentators identify the consistency with which policy measures have been enacted by governments of different political colours as the key factor enabling this success, along with the absence of a powerful automotive manufacturing lobby to impede change.

The Netherlands continues to move briskly towards widespread EV adoption with its overall Index score increasing by 15 points during the year to a healthy 76 — far ahead of all members of the Big 5 group. The share of EV registrations was 35% for the whole year. An extensive public charging network provides important reassurance to consumers considering the switch to electric, with 157,000 recharging points supporting the nation’s fleet of half a million plus BEVs. Four Dutch cities — Amsterdam, Rotterdam, the Hague and Utrecht — now feature amongst the top-ten European locations for EV charger provision.

Prospects for 2025

European emission targets

EU and UK emission targets will continue to be the main driver for the transition to EVs through pressuring automotive OEMs to increase the number of electric vehicles in their sales mix.

2025 is intended as a watershed year. In the EU, emission rules will be tightened allowing only 93.6g/km of CO2 across the vehicle fleet, a 15% reduction from the 2021 baseline. Missed targets will result in expensive fines — €95 for every 1gm/km over the target for a brand’s fleet, multiplied by the total number of cars they sell.

The British ZEV mandate is slightly different with explicit targets for the proportion of pure electric vehicles manufacturers are required to sell. In 2025 this ramps up from the current share of 22% to 28%.

Both the EU Commission and UK government are facing concerted lobbying from sections of the car industry to soften or delay achievement of these targets. But it looks unlikely there will be any dramatic policy shifts in the short term. In the EU no major reset is likely until a review of the policy is completed in 2026. In the UK the government is seeking “views on whether the current flexibilities are still fit for purpose in meeting the existing ZEV trajectory” but it remains adamant that no new internal combustion cars will go on sale from 2030.

Whilst many projections for the EV market remain gloomy about the year ahead, the countervailing view is that a ‘sticks-over-carrots’ approach is ultimately effective and that manufacturers will reach those targets although they will likely leave it as late as possible so as to maximise their returns from higher margin ICE vehicles:

“As with past car CO₂ targets, carmakers are expected to close their compliance gap in the target year, rather than ahead of time.”

 ‘The Drive to 2025 ’ T&E

National policy reversals

Political uncertainties at a national level are likely to have more immediate and stifling effects on expansion of the EV market.

The sweeping removal of German government support for EVs by the faltering SDP coalition at the end of 2023 was followed by policy inertia on many fronts. Parliamentary elections brought forward to February will likely see a ‘Grand Coalition’ of the SDP and CSU assume power. Whilst there is more hope of money being found to assist EV adoption this is unlikely to be a high priority in the face of the many foreign and domestic challenges confronting the new government.

The collapse of the French government in December has created similar uncertainties there regarding the year ahead with purchase aid for EVs reduced and the much vaunted ‘social leasing’ programme delayed and likely to be heavily revised before implementation in the middle of the year.

In January the Spanish government was unable to push through an extension to the ‘Plan Moves 3’ that gave electric car buyers up to €7,000 in purchase assistance.

In The Netherlands 2025 will see the beginning of the phase out of EV’s exemption from road taxes.

Appearance of more affordable EVs

On a more positive note 2025 will also see the introduction of a slew of more affordable electric cars from mainstream manufacturers. As we have argued over the last year, the disparities in pricing between EVs and ICE alternatives should be understood as the main barrier to mainstream adoption of electrification which is of greater importance than the perceived inadequacies of the public charger network. Among the sub-€25,000 cars due to arrive are the Fiat Grande Panda, Renault 5 E-Tech, Renault 4, Leapmotor T03, Citroen e-C3 Aircross, Ford Puma Gen-E, Hyundai Inster, and Volkswagen ID.2. A new Nissan Micra and the long promised Tesla Model 2 may also appear towards the end of the year.

The Hyundai Inster is just one of a number of ‘cheaper’ EVs to be launched during 2025.

Whilst newly established Chinese brands have the potential to add to this list of affordable cars, their presence in European markets is at present peripheral. in 2024 this group’s combined sales in Western Europe accounted for less than 4% of the market according to Schmidt Automotive. Newly imposed tariffs, logistical challenges and the protracted nature of the type approval process are all factors Schmidt identifies as limiting market penetration,

Other factors

There are a number of other factors that will affect the health of the European EV market during 2025.

A continuing fall in battery raw material prices could further assist price competitiveness.

Leasing companies will be closely watching second hand EV values which determine the terms on new cars they finance. Hertz and Sixt have both reportedly suffered losses from their activities in the EV market due to falling residual values. Any future hesitancy from the wider finance sector would deal a major blow to hopes of enlarging the EV fleet given the high proportion of purchases made by corporates through lease arrangements.

Lastly, the broader health of the European economy will, as ever, be a key determinant of consumer confidence in the year ahead that directly shapes the volume of new car sales, including EVs.  As always a number of threats lay in wait, not least the possibility of tariffs being imposed on European products by the new administration in the US which would negatively impact European growth and consumer demand.

The EV Index from Sophus3 provides an objective measure of the readiness of the vehicle market to enable and encourage the mainstream adoption of electric vehicles (EVs).

The index is formed from three pillars, each measuring distinct factors that help or hinder electric vehicle acquisition. First of these is the consumer appetite to buy electric, the second is the capability of the automotive companies to supply these cars, and the third is the availability of suitable charging infrastructure.

A score of 100 represents parity in the attractiveness, availability, pricing and usability of an electric car compared with a conventionally fuelled vehicle.

We publish the EV Index for the UK, Germany, France, Italy, Spain, The Netherlands, and Norway.

A fuller explanation of the EV Index from Sophus3 can be found here.