Europe has passed the EV tipping point says EY and Eurelectric report

Europe has passed a tipping point when it comes to replacing internal-combustion engine (ICE) road vehicles with electric versions, claimed a road fleet electrification report from Eurelectric and EY.

In December 2025, 22.6% of new car registrations were battery EVs. On the other hand, internal combustion engines (ICEs) were 22.5%. For the first time, battery EV registrations surpassed ICE, which EY in the report has termed a symbolic breakthrough.

Overall in 2025, EVs accounted for 29% of new passenger car registrations in Europe, compared with 48% in China and 12% in the US, said the EY report, prepared for Eurelectric, the federation which represents more than 3,500 European power generation, distribution and supply businesses.

Worldwide, the electric car penetration was 25%, but varied greatly between countries, according to the report. In Norway, for example, 95.9% of new cars were electric last year. In North America, the figure was about 10%. And the member of the European Parliament Thomas Pellerin-Carlin noted that EVs were about half of the car registrations in Vietnam, a relatively poor country. 

"Electric cars are not something for the rich," he told Eurelectric's recent E-vision conference in Brussels, Belgium on EVs. "The future of the car in the world is electric."

The growth in commercial EVs is slower. The report highlights that only 12% of new light commercial vehicles and 5% of new heavy commercial vehicles were electric in 2025. Partly that was a result of the fragmented market; buyers range from large firms with hundreds of vehicles to individuals with one or two trucks. The market is also split into dozens of types of vehicle; small, large, short-haul, long-haul, refrigerated, etc.

The report also identified a three-fold increase in the number of public chargers for EVs in Europe between 2021 and 2025, to about 1.2 million. And, although the number is low, there had been a six-fold increase in the number of chargers for heavy commercial vehicles over the same period, to 937.

Big impact

Corporate fleets are important because, as well as accounting for 60% of new car sales and most sales of vans, buses and trucks, they cover the most kilometres. EY said in the report that as a result fleet cars accounted for about 45% of direct road transport emissions of carbon dioxide (CO2), light commercial vehicles about 12% and trucks and buses 27%.

Therefore, full electrification of fleets could avoid about 1 billion tonnes of CO2 emissions by 2030, or about 5% of the projected emissions in the EU and the UK between 2025 and 2030.

For fleet operators, the benefits of switching to EVs would be clear financial savings, claims the report. Lower energy costs of 50—70% and 20—40% lower servicing and maintenance costs would result in cumulative savings of €246 billion ($283.5 billion) by 2030, it said, with 140TWh of electricity replacing 95 billion litres of diesel. Operating costs account for 60—75% of the total cost of ownership (TCO) of fleets, which also takes into account the residual or resale values of vehicles.

Although some observers think that concerns about batteries losing value quickly are not justified today, when battery lives of 15—20 years might be expected, residual vehicle values are a big concern of vehicle makers, leasing firms and fleet operators.

The report states that TCOs could be improved by measures such as governments providing purchasing subsidies, independent battery health certification and commitments by EV manufacturers to buy back their products.

Knock-on effects of more electric fleets would include, for infrastructure providers and financiers, large demand with long-term, predictable revenue, while the report suggested that leasing firms could see years of growth by providing e-mobility packages such as vehicle-plus-charger for monthly fees.

Carmakers could also benefit from a demand for about 2 million electric cars by 2030, while charge point operators would see three to five times as much business than from public charging. And for Eurelectric members, more EVs would mean more flexible loads to absorb renewable energy and stabilise grids.

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Patchy persuasion

Yet scattered around Europe was a patchwork of EV subsidies, tax breaks, penalties for missing EV quotas and other policies that influence the purchase and operation of fleet and other EVs, coupled with inconsistent implementation, states the report. Policies were not always fixed and concerns about the ability to charge vehicles when required undermined demand, although the European Commission's Grid Package published in December 2025 was intended to ease the construction of charging points and their connection to grids.

EY in the report called for robust regulation and policy, such as establishing charging hubs along major roads and giving priority to zero-emission vehicles in public procurement. Under the EU's Alternative Fuels Infrastructure Regulation, car and van charging stations are now mandatory every 60km of the core Trans-European Transport Network, with all the hubs expected to be operating by 2030. Progress has been largely rapid.

Fast-charging hubs are now mandatory every 120km of the core routes, dropping to every 60km by 2030, although there is slower progress towards 50% of the core network having charging points for heavy commercial vehicles by 2027.

Doubts remain

Yet despite progress, fleet operators still pointed to four main concerns, according to the report.

One was "fragmented and short-lived policy support" across EU countries, especially to offset the higher prices of EVs over ICE vehicles, as well as to improve operating economics. For example, operators faced varied application of the EU's Eurovignette which allows countries to exempt zero-emission heavy goods vehicles from road tolls or charges.

There was also a mixed picture across the EU on charging infrastructure, with delays and poor access to grid supplies making commercial EVs unviable in many operators' minds.

Operators also pointed to a lack of guidance or support for a switch to EVs, which could require changes in operating practices, typically to allow regular charging and better vehicle scheduling. However, one operator told E-vision that loading and unloading at depots provided charging time, reducing any inefficiencies associated with EVs.

Also of concern to operators, according to the report, were technical standards and data interoperability. Charging in different countries, including bidirectional charging so that excess battery capacity can be fed back into the grid, did not always work similarly, for example.

To address such bumps in the road, EY and Eurelectric came up with a swath of recommendations, including new financing models, buy-back programmes and co-location of storage and renewables. Crucially, the report suggests that everyone needed to be involved; fleet operators, utilities, grid companies, equipment makers, operators of charging points, finance companies, policymakers and regulators. It is unclear if they are all yet moving in the right direction.