Oct 09, 2025 (MarketLine via COMTEX) --
Five years after governments set the clock ticking on the end of petrol and diesel, the industry is taking stock. New COaee targets, falling battery prices and revived incentives are powering EV growth, but affordability, infrastructure, and consumer confidence remain the real tests.
These will be front and centre at the GlobalData Automotive Europe 2025 conference (15-16 October), where industry leaders gather to assess whataEUR(TM)s been achieved and what it will take to reach 2030.
The automobile markets across Britain and the EU are at a pivotal point.
As Rachael Jones, Director of Automotive Finance at Autotrader puts it, aEURoeThe ban on ICE vehicles was announced five years ago for 2030. We are at the midpoint now. ItaEUR(TM)s a time to reflect on what has happened in the last five years and look at whataEUR(TM)s happening in the next five years.aEUR
That is what Al Bedwell, the Director of Global Powertrain Research and Analysis, GlobalData and LMC will be doing at the Globaldata Automotive Europe 2025 event this month.
aEURoeLast year was a really disappointing year, where there was zero growth for battery across Europe. There were key reasons for that. There was a lack of major incentives, and the industry was holding back new products so that they could launch them this year when they will count towards the new CO2 target,aEUR Bedwell tells us.
But things are changing.
aEURoeThis year itaEUR(TM)s different. We have got lots of new products coming into the market,aEUR Bedwell says. aEURoeThey are shifting away from the dominance of the premium segment in the Battery Electric Vehicle sector, so we are seeing better affordability.aEUR
The need to comply with the new CO2 targets is boosting the market, even at a time when, as Bedwell points out, consumers are still feeling quite poor. It means the EV market is growing again. Across Europe the market is up 32% year-on-year towards August, where last year it was in negative territory.
aEURoeWe are seeing strongAEVAuptake across Europe, with many countries starting to see around or over 20% of new car sales being battery electric,aEUR agrees Vicky Edmonds, CEO of EVA England. aEURoeWithin the UK, battery electric cars made up 26.5% of new car sales last month - driven largely by the UK Government's ZEV mandate and parallel incentives (including salary sacrifice). But we are also seeing increasing consumer interest and trust in EVs, with our latest EVA England survey results suggesting that 95% of electric car drivers in the UK would never look back.aEUR
The UK is the third biggest EV market in the world, just behind China and the United States. In the UK Electric Vehicles now make up a 22% share of the market.
aEURoeIn the last few months EVs make up one in four new cars,aEUR says Jones. aEURoeWe did a survey asking consumers if they feel ready to switch to Electric Vehicles, and four out of ten of new and used buyers are saying aEUR~yes, IaEUR(TM)m ready to switchaEUR(TM). For people under the age of 55 that figure grows to 47%.aEUR
There still barriers for the market to overcome. One of those has traditionally been the choice of products.
aEURoeToday thereaEUR(TM)s 150 different electric vehicle models on sale from 50 different brands,aEUR Jones shares. aEURoeLast year a new model launched every ten days.aEUR
Another barrier is, of course, price. The EV market has generally slanted towards the premium end.
aEURoeFive years ago, we did the analysis and EVs were 59% more expensive than petrol or diesel cars. Today that figure is more like 20%,aEUR says Jones. aEURoeWe are not at price parity yet, but the price is coming down, making EVs more available for more people.aEUR
A British success storyJones is even pointing out examples of price parity in the used market. In Europe, the UK is one of the top performers.
aEURoeThe UKaEUR(TM)s doing pretty well,aEUR Bedwell agrees. aEURoeWe have the Zero Emissions Vehicle mandate in the background. That applies pressure to the OEMs to push product in the UK.aEUR
Jones tells us, aEURoeStill a way to go to get to 2030 but itaEUR(TM)s headed in the right direction.aEUR
The UK is actually performing relatively well against the rest of Europe in the transition.
aEURoeItaEUR(TM)s a major market in Europe and one of the better performing ones, better than Spain and Italy, while France has actually gone backwards a little bit. They cut their grant at the beginning of the year,aEUR Bedwell says.
France has also taken away the grant for Chinese vehicles altogether based on the CO2 emissions created during production, effectively cutting them out of that market. Meanwhile, in the UK market Chinese brands are providing an injection of competition.
aEURoeAt Carwow, we monitor consumer sentiment and awareness of Chinese car brands, and we are seeing growing levels of interest,aEUR says Rob Buckland, Leasing Director of Carwow Leasey. aEURoeIn early 2023, only 24% of respondents said they would consider a Chinese brand for their next vehicle; this has grown to 39% in the first half of 2025, showing a huge rise in positive consideration.aEUR
Meanwhile, while Bedwell points out that Germany has yet to reintroduce any of its grants for consumers that want to buy a battery EV, it has invested money in infrastructure.
aEURoeVolkswagen, EuropeaEUR(TM)s largest automaker, increased itsAEVAsales in the EU by an incredible 89%,aEUR adds Lucien Mathieu, Cars Director at Transport & Environment. aEURoeWith the 2025 EU emissions target looming, they upgraded their electric models and lowered their prices.aEUR
Overall, BedwellaEUR(TM)s perception of the EV transition is cautiously optimistic.
aEURoeYou couldnaEUR(TM)t describe it as a boom, but you could say itaEUR(TM)s getting back on track,aEUR he concludes.
There are other perspectives, however.
aEURoeIn the EU and the UK, thanks to regulatory targets, we are in the midst of anAEVAboom,aEUR says Mathieu. aEURoeIn the first seven months of 2025 alone, European manufacturersaEUR(TM)AEVAsalesAgrew by almost 40% in the EU. Thanks to its ZEV mandate, the UK is leading the way with 21% of cars sold being fully electric so far this year. The EU is on 15%,Aheld back somewhat by the decision to delay its 2025 target for carmakers to 2027.aEUR
Incentives and regulationAt the same time, battery costs are set to fallAby 27% between 2022 and the end of this year and are set to decrease by another 28% by 2027 compared to 2025 levels, according to T&E forecasts.
aEURoeSimilarly, charging infrastructure has been deployed on 77% of the EU core highway network and all Member States have already met or surpassed the number of public charging points required by the EUaEUR(TM)s 2025 target,aEUR says Mathieu.
But Mathieu also argues that to continue to reap these rewards requires consistency.
aEURoeThe market conditions are there for massive sales of affordable EVs,aEUR he says. aEURoeNow is not the time to change the regulatory targets in the EU or the UK.aEUR
Buckland also points to the impact regulations and incentives have yielded. SMMT registration data and Carwow GroupaEUR(TM)s configuration and enquiry data indicate that EVs consistently outperform petrol and diesel models, and have taken an increasing share of the market in 2025.
aEURoeFleet and business registrations remain the driving force behind the increasing EV sales, which goes some of the way to helping OEMs hit their targets under the ZEV mandate, but clearly much more needs to be done to accelerate uptake,aEUR Buckland says. aEURoeThe Electric Car Grant was very welcome news, and it has clearly heightened interest in EVs.aEUR
After the initial grant announcement in early July, enquiries placed with dealers via Carwow for EVs priced below the qualifying AGBP37,000 increased by 124%, week-on-week. Even EVs priced above the threshold benefited, with a 57% rise in enquiries over the same period, reflecting a general improvement in EV consideration and purchase intent across the segment.
Continuing challengesA lot of progress has been made in the last five years, but everyone we speak to agrees that there is still a lot of work left to do to hit the 2030 targets, and Price continues to be the leading stumbling block.
aEURoeWhen we speak to drivers, the upfront cost of purchasing anAEVAcan still be a real concern. When drivers do choose electric, it is increasingly because they are being offered favourable financing rates through company salary sacrifice schemes,aEUR says Edmonds. aEURoeFor theAEVAsector, including the motor finance sector, this is a significant opportunity as we know that once drivers go electric, they rarely look back.aEUR
However, as Edmonds tells us, the majority of these schemes target the new car market and only a few cover the second-hand market, preventing significant penetration.
aEURoeMost of us buy our cars on that used car market, and a greater number of financing schemes that target second hand EVs would allow many more consumers to access the benefits of driving electric,aEUR Edmonds says.
Of course, with the used market comes another recurring obstacle to the switch to EV. Just how much, and for how long, is that EV going to maintain its value?
aEURoeWe still see the fear people have around residual value and buying used Battery Electric Vehicles. The evidence is starting to show that these fears are pretty much unfounded,aEUR says Bedwell. aEURoeVehicles are being built with a good battery management system in place. Technology is improving. It is pretty hard to wreck your battery by charging it in the wrong way, and the EU is bringing in durability standards, giving confidence to the whole sector.aEUR
Jones also points out how tough it has been to establish valuations for EV, but adds that this is changing as demand increases.
aEURoeIn the under five year old used car market, EV demand has risen against supply again, but this will need to continue to avoid further Residual Value pressure,aEUR Jones explains. aEURoeWe currently see from a supply point of view that 11% of under five year vehicles listed on Autotrader are EVs, whereas the lead share is higher at 17% giving a positive outlookaEUR
Jones also points to another issue that will be crucial to the transition.
aEURoeIt needs to be a fair transition,aEUR she insists. aEURoe35% of divers donaEUR(TM)t have access to off-street parking, so they have to rely on public charging.aEUR
That becomes a real issue when home charging costs 8p a mile versus 25p a mile for public chargers. This is an area where some in the car finance sector believe there is an opportunity, however.
aEURoeWhile the recent UK Government grant helps with the cost of acquiring an EV, at Leasey weaEUR(TM)ll be taking this one step further by helping the UKaEUR(TM)s drivers mitigate concerns about charging costs,aEUR Buckland says. AaEURoeAll new EV customers of Carwow Leasey will receive a 20% discount at Gridserve, the nationwide charge point operator network.aEUR
But Transport & Electric is arguing that the leasing sector is one that should be doing more to promote the shift to EV. A spokesperson for the organisation has pointed out that half of all new cars in Europe are leased and leasing companiesaEUR(TM) market share is forecasted to reach 70% in 2030. ButAno large leasing company has committed to stop financing new ICE vehiclesAin Europe, even after 2035, when the EU plans to ban their sale.
aEURoeCreating leasing solutions for used cars will be key for making EVs more accessible for more people, and consumer confidence can be further enhanced with battery health reports. Ideally, we need standardisation in approaches, such as the energy ratings that can be checked when purchasing white goods,aEUR Buckland tells us.
Next stepsAs we enter the second half of the 2020s, we have a better idea of which tools are effective, and what needs to be done to achieve our zero emissions goals.
aEURoeIncentives are crucial, and we've seen brands, especially newer entrants from China, respond to the ECG by offering discounted pricing to encourage consumers to consider EVs,aEUR says Buckland. aEURoeThere has also been strong consumer interest in cars eligible for the Grant, with the Ford Puma Gen-E becoming the most-enquired model on Carwow in September, following the news of its eligibility for the full AGBP3,750 discount.aEUR
Captive finance houses in particular are in a position to really support the transition to EV, and they have already provided strong APR rates, deposit contributions and incentives to make EVs more accessible to consumers.
aEURoeQuite often the finance offer is to help bring the real price down,aEUR Jones says.
aEURoeThe motor finance sector is uniquely positioned to connect the many moving parts of EV ownership into one seamless experience; bringing together the monthly cost of the car, servicing, insurance, and even the electricity tariff in a single, transparent package,aEUR Buckland observes. aEURoeBy going into partnership with other service providers, the sector can show that living with an EV is both accessible and affordable.aEUR
Ultimately, it all comes down to the triumvirate of needing more vehicles, that are more affordable and supported by more infrastructure. Bedwell argues that we are already on our way there.
aEURoeWeaEUR(TM)re just plugging the gaps that exist in terms of creating an environment where people feel thereaEUR(TM)s no downside to shifting to Battery Electric Vehicles,aEUR he says. aEURoeI think it will take until the end of the decade and beyond, but I get the feeling that the technology is moving quite quickly.aEUR
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