EV Index 2025 Q2: time to address the second-hand market

Overview

It has been another quarter in which we have seen modest improvements in the EV Index that measures the factors that encourage or allow consumers to acquire electric vehicles. The Index showed gains in all eight of the markets we track with the exception of Italy whose Index remained static compared to the previous quarter.

But the results on the ground—the sales and market share that EVs are achieving—remain underwhelming. Despite the best efforts of many in government and the exertions of the car companies leading the electric transition, a majority of consumers still appear reluctant to consider an EV.

Increasingly, attention is shifting to the second-hand market where a lack of progress is hampering EV uptake and beginning to have a negative impact on the demand for new EVs as residual values crumble. The barriers in the second-hand market do not seem to be about consumer attitudes to the technology but simple economic ones. For the used car buyer — the vast majority of us — an EV is simply more expensive than its ICE alternative. At this point in an EV’s life there are no government subsidies available or tax benefits to entice us to make that choice.

Serious consideration needs to be given to this problem if the market for EVs is to be prevented from stalling over the coming months. The challenges are discussed in more detail at the end of the article.

EV Index Q2 2025

Figures in brackets show change from Q1 2025

Individual market summaries

• Within the Big 5 grouping of the largest European car markets the UK showed the most improvement in its overall score, the result of greatly increased levels of consumer interest and gains in the affordability of available EV models.
• Germany ranked equal to the UK with a larger improvement in EV/ICE pricing differentials and an expansion of the charging infrastructure supporting EV ownership.
• France made more modest gains with the pattern of consistent investment in charging infrastructure allowing it to achieve a score of 100 in this area – effectively achieving parity with ICE for convenient access to refuelling facilities.
• Spain and Italy continue to be the laggards in the group of markets we Index. Despite slow overall improvements compared to where both markets were two years ago, levels of consumer interest remain remarkably low. Clearly neither car brands or governments are getting a message across that excites consumers sufficiently to give EV purchase serious consideration.
• By way of contrast, the ‘Nordic’ countries continue to show the major gains. Both Norway and Denmark have successfully tipped the scale so that consumers are now overwhelmingly predisposed to ‘think electric’ and — as the registration results below show — follow through in their purchase decisions.
• The Netherlands also scores highly with its world beating EV infrastructure the major driver. But, like the majority of markets, it still has work to do to entice more Dutch consumers into the market for an electric vehicle.

Registration outcomes

At the end of the first half of the year the European car market appeared becalmed. Total registrations of passenger cars in the EU, EFTA and UK stood at 6.8 million units — 0.9% behind the comparable figure for the first half of 2024.

Against this backdrop, sales of pure electric models provided more positive hope. Registrations of BEVs rose 25% year-on-year and, for the first time, exceeded one million units in a half-year period. The BEV share of the new car market now stands at 17.5%, a respectable increase from the 14% it commanded at the end of June 2024. But as the ACEA (European Automobile Manufacturers’ Association) points out, this is “still far from where it needs to be at this point in the transition”.

As ever there are significant variations between markets as the country specific data shows:

Policy developments

European Union

The most significant policy adjustment at the European level occurred in May, when the European Commission approved the relaxation of 2025 CO2 emissions targets for cars and vans. This decision extended the compliance period from one year to three years, giving car brands greater flexibility to avoid immediate fines. Critics of the change say it will slow Europe’s transition to carbon neutral mobility whilst allowing the technology gap between incumbent European manufacturers and new Chinese competitors to worsen. The early signs are that manufacturers are already changing the powertrain mix they are selling, and seeing the task of ramping up BEV sales as less urgent.

A recent proposal from the Commission to stimulate demand through forcing large fleets and rental companies to exclusively procure EVs by the end of the decade, has been heavily criticised by the Chancellor, Friedrich Merz, who said such a rigid approach could fatally damage German domestic brands.

National policy initiatives

However, the significance of the fleet sector as a potential driver of EV adoption is not lost on the German government. EV sales in Germany were badly hit when the Umweltbonus, a direct subsidy to consumers, was withdrawn in December 2023. (BEV registrations in the first half of 2024 consequently fell by 16%.)

In June this year, new EV incentives were announced, aimed at companies rather than consumers, which allow significant tax write-offs for company EVs, alongside tax relief and support for expanding charging networks.

In April, the UK Labour government announced a rolling back of certain aspects of the Zero Emission Vehicle (ZEV) mandate, offering more flexibility for car manufacturers. This includes extending the sales of hybrid vehicles and internal combustion engine (ICE) vans until 2035, while maintaining the 2030 ban on new petrol and diesel car sales. The changes were framed as a response to threatened US tariffs on imported cars, but were the result, as in the EU, of industry lobbying to soften the mandate. On the 16th July the reintroduction of grants of up to £3,750 to support electric vehicle purchase was announced. £650 million will be used to fund the new Electric Car Grant (ECG), however, the full incentive amount is available only for new vehicles costing less than £37,000.

France will restart its ‘social leasing’ program in September. This provides affordable electric vehicle leases for lower-income households. The budget amounts to around €370 million allowing for at least 50,000 electric vehicle leases. The first iteration of the scheme was launched in February 2024 when a much bigger fund was exhausted in less than two months. This time around consumers will need to make a larger contribution to their lease payments.

In April, Spain extended its MOVES III Incentives Programme to the end of the year with a budget of €400 million to support EV adoption and charging infrastructure development. Grants of up to €7,000 euros for EV purchase and 70% of the cost of a charging point are available.Buyers will also benefit from 15% income tax deductions.

Infrastructure growth

At the end of the half year the number of BEVs on the roads of the European Union—both cars and vans— had risen to 6.2 million. The public infrastructure to support that fleet, meanwhile, grew to a total of 991,000 charge points. This works out at a ratio of 6.2 vehicles per charger, an improvement from a ratio of 7.5 one year ago.

These numbers show that, for the moment, public charging facilities are continuing to keep pace with the growth of the BEV fleet. However, given that the original EU target was for 20% of car sales to be EVs by the end of this year, then the ratio of charge-points to vehicles would be showing less improvement if that objective was in reach.

But again there is considerable variance in that ratio for different markets. The UK for example has fewer chargers than the European average with a ratio of 16.2 vehicles per charger. Perhaps more surprisingly, Norway is the real laggard within the group of markets we track with only one public charge point per 34 EVs. The Netherlands remains the best-in-class performer with a ratio of just 3.3 vehicles per charger.

A big driver for growth of the infrastructure network is the European Union’s Alternative Fuels Infrastructure Regulation (AFIR) which mandates the installation of fast-charging stations of at least 150 kW every 60 km along the TEN-T (Trans-European Transport Network). A minimum total power output of 400 kW is required at these stations, increasing to 600 kW by the end of 2027.

Future EV model timeline

New BEV models are being launched at ever greater frequency giving buyers an expanding variety to choose from. The IAA Munich— taking place from September 9–14— will see a significant number of premieres and new model announcements. Among the models expected to come to market during the second half of the year are the BMW iX3, BYD Atto 2, Citroën ë-C3 van, DS N°8, Fiat Grande Punto (electric), Genesis GV60 Magma, GWM Ora 07, Jeep Compass Electric, Jeep Wagoneer S, Kia EV5, Kia PV5 (LCV), Leapmotor B10, Mercedes-Benz CLA (Electric), Nissan Leaf (new generation), Nissan Micra (Electric), Polestar 5, Renault 4, Skywell Q, and the facelifted Toyota bZ4X. These will be followed in the new year with launches of the following: Alpine A390, Cupra Raval, Denza B5 (Bao 5), Hyundai Ioniq 6 N, Mercedes-AMG CLA 45 (Electric), MG Cyberster GTS (hardtop derivative), and the Volvo ES90,

In the category of ‘smaller and more affordable’, the launch of Volkswagen’s ID.2 still seems to be more months away, although its Cupra Raval sibling will provide an earlier preview of the group’s small EV technology but within a more expensive package.

Statements from Tesla (not always aligning with comments from its CEO, Elon Musk) remain ambiguous about whether an entry level Model 2—or Model ‘Q’ according to some sources—will appear, or whether, the current position, that this has been permanently shelved to make way for the much hyped ‘robotaxi’. The next Tesla earnings call could well see a reversal here as the company has to deal with its poorest quarterly performance in nearly a decade and it may therefore want to preserve the promise of a future, high volume model as one pathway back to profitability so as to tamp down shareholder disquiet.

The Cupra Raval will be the first model using Volkswagen Group’s MEB Small platform

Talking point: governments need to address the second-hand EV market

During the most recent quarter a number of voices have raised concerns about the failings of the used EV market. There is a growing consensus amongst industry bodies, governmental advisors, as well as consumer and environmental organisations, that a robust, accessible second-hand EV market is not a byproduct of new EV sales, but rather a fundamental requirement for driving widespread EV adoption and maintaining a healthy demand for new EVs as well.

The current problems are identified as:

• Government policies, along with subsidies and manufacturer incentives, are driving the rapid growth of the EV fleet in all countries.
• As a result, the supply of used BEVs is increasingly overtaking demand as second-hand buyers cannot call on the same support that would make choosing electric attractive.
• Inevitably, second-hand prices are being forced downward, lowering the residual value of EV models, which then feeds back up the acquisition chain to make the finance of a new vehicle ever more expensive.

In the UK, this challenge was neatly summed up in a letter sent to the relevant parliamentary select committees, coordinated by the industry trade body, the British Vehicle Rental and Leasing Association (BRVLA).

“While most new vehicles are bought by businesses, the majority of UK consumers only buy on the used market. Those buyers currently have no support to make the shift to BEVs, creating a chasm between supply, due to increase by 178% by 2028, and demand. This gap has put values of second-hand BEVs under pressure, seeing them fall 50% over the last two years and forecast to fall a further 28% by 2030. This leaves the automotive supply chain to absorb the heavy financial impact of incentivising that demand.”

Increased support for the used market, through financial incentives and consumer confidence-building measures, is seen as ever more vital for an equitable and accelerated transition to electric mobility.

Strategies that could be considered include:

• Grants and subsidies for the purchase of used electric cars—similar to those offered to buyers of new EVs—to reduce the pricing differentials with fossil-fueled cars that discourage an EV choice.
• Low, or zero-interest loans on used EVs to make choosing electric attractive
• Standardised battery information, ideally in the form of a health certificate or guarantee, to tackle anxieties about purchasing a used EV.

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, Denmark, and Norway.

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