Europe’s EV market at a crossroads

Carlos Carriedo at WEX explores the EV landscape in Europe and considers how we can navigate it as it evolves 

 

Europe’s electric vehicle (EV) landscape is at a crossroads. While the EU remains committed to its decarbonisation agenda, economic pressures, shifting trade policies, and global competition – such as China’s accelerated EV production and the US’s shifting policy landscape – are creating headwinds for manufacturers, consumers, and fleet operators alike.

 

The success of Europe’s transition to electric mobility will depend on a mix of policy certainty, infrastructure investment, and technological advancements. For businesses, this transition presents challenges and opportunities. Keeping pace with regulations and corporate sustainability commitments will require a combination of innovation and flexibility.

 

Companies that take a proactive approach – leveraging digital tools, responding to evolving regulations, and addressing infrastructure gaps – will be best positioned to lead in the mixed-energy fleet world. 

 

Navigating the regulatory landscape 

Despite global market fluctuations, Europe is pressing forward with ambitious emissions and infrastructure targets. In January, new CO2 performance standards for new cars and vans came into effect across the EU. These standards required new passenger cars, light commercial vehicles, and heavy-duty vehicles to cut their EU fleet-wide emissions by 15% by 2025 and by 50-55% by 2030 (relative to 2021 levels).

 

These new limits will encourage the gradual reduction of emissions ahead of the 100% emissions reduction target for cars and vans from 2035 onwards, in line with European Climate Law.  

 

With improved charging infrastructure central in achieving these goals, the EU has also introduced a charging infrastructure mandate, the Alternative Fuels Infrastructure Regulation (AFIR). This mandate requires fast-charging stations (minimum 150 kW) to be present every 60 km along the trans-European transport network (TEN-T) by the end of 2025. 

 

Across the channel, the UK is also doubling down on its commitment to EVs. The UK’s zero emissions vehicle (ZEV) mandate would require an increasing percentage of new vehicle sales to be EVs, reaching 100% by 2035. In addition, the government has also committed to investing £200m across 2025/26 to accelerate the EV charge point rollout, including funding to support local authorities to install on-street charge points. 

 

So, despite some uncertainty, Europe’s policy direction provides much-needed stability for investment in fleet electrification. However, businesses must stay agile in response to shifting global tariffs and supply chain pressures that could affect vehicle availability and costs.

 

The infrastructure gap 

As sustainability commitments intensify, fleet electrification has become a strategic priority for many businesses, with a recent report from Frost and Sullivan (commissioned by WEX) revealing that 70% of the fleet decision-makers surveyed consider decarbonisation a core business strategy. For example, BT Group recently announced a landmark order for approximately 3,500 EVs, marking the UK’s largest-ever commercial EV fleet purchase, in a move motivated by the company’s goal to reach net zero by March 2031.

 

To capitalise on this enthusiasm, there are several challenges that must be overcome. Most pressingly, there is an urgent need to close the charging infrastructure gap. While Europe’s public and semi-public charging infrastructure has surpassed 900,000 charging points, there is still a long way to go; the European Automobile Manufacturers’ Association projects that up to 8.8 million will be needed by 2030 to meet accelerating demand, particularly for commercial and public fleets and in rural areas. 

 

But beyond simply expanding the number of charging stations, businesses need a more seamless charging experience. Critical considerations that could dictate the sustained uptake and long-term success of the EV transition include faster charging speeds to minimise downtime, standardised payment systems for fleet operators, and better visibility into charging point availability and costs. 

 

Driving forward with innovative solutions 

Finding solutions to these challenges will require a collaborative effort. Investors, charge point operators (CPOs), governments, and automotive OEMs must work together to resolve pinch points before the infrastructure lags too far behind consumer and commercial demand. A mixture of public and governmental investment is critical for this. 

 

For businesses embarking on the transition journey, there are several strategies that can help them navigate the infrastructure gap and transitionary period. One such strategy is investing in advanced payment solutions. As mixed-energy fleets become the norm, fleet managers are grappling with payment systems’ complexities. 

 

With a diverse selection of electric charging networks being integrated with existing traditional fuel payment systems, investing in a streamlined and tailored payment system can facilitate the management of mixed-energy fleets and ensure cost savings and efficiencies. For example, the ‘EV Driver by WEX’ app provides access to over 830,000 charging points across Europe, along with features and pricing transparency to streamline fleet management.

 

Another way fleet managers can help drive efficiencies is by investing in real-time route analytics. Through harnessing ‘smart city’ data, fleet managers can get instant insights into vehicle performance, driver behaviour and fuel consumption. Fleet managers can then make quick decisions that help optimise routes, assist in reducing fuel usage, and aid in improving driver efficiency.

 

The EV landscape is undoubtedly complex. Alongside continued investment into technical innovation and charging infrastructure, the sustained momentum of the EV movement will rely on a combination of commitment from manufacturers, consumer and business demand, and a supportive regulatory landscape. Expected shifts in trade and tariffs this year could also affect the industry in ways we cannot yet predict. 

 

However, we can be confident that the pressure to meet decarbonisation and sustainability targets will intensify throughout 2025. By investing in EV transition now, businesses can accelerate their sustainability timelines and meet regulatory demands now and in the future. 

 

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Carlos Carriedo is Chief Operating Officer at WEX

 

Main image courtesy of iStockPhoto.com and SolStock