Electric Vehicles to Cost Less Than ICE Vehicles in EU by 2027: Report

Electric Vehicles will be cheaper to make than fossil-fuel vehicles in every light vehicle segment across Europe from 2027 at the latest

Electric Vehicles and vans will be cheaper to make than fossil-fuel vehicles in every light vehicle segment across Europe from 2027 at the latest, according to a new BloombergNEF study commissioned by Transport & Environment (T&E). 

The research found that battery electric vehicles could reach 100 percent of new sales across the EU by 2035, if lawmakers introduce measures like tighter vehicle CO2 targets and strong support for charging infrastructure. T&E called on the EU to tighten emissions targets in the 2020s and set 2035 as the end date for selling new polluting vehicles.

The report found that the falling battery costs, new vehicle architectures, and dedicated production lines for electric vehicles will make them cheaper to buy, on average, even before subsidies.

But the early build-up of EV production and sales will be crucial to drive down costs and generate consumer buy-in for further adoption in the future, BNEF found. Only stricter CO2 targets for vehicle-makers in the 2020s, including a new 2027 target, can ensure that, T&E said.

Julia Poliscanova, senior director for vehicles and e-mobility at T&E, said “EVs will be a reality for all new buyers within six years. They will be cheaper than combustion engines for everyone, from the man with a van in Berlin to the family living in the Romanian countryside. Electric vehicles are not only better for the climate and Europe’s industrial leadership, but for the economy too.”

The research further details that battery electric vehicles and vans could reach 100 percent of new sales by 2035, even in southern and eastern Europe, if lawmakers increase vehicle CO2 targets and ramp up other policies to stimulate the market such as a faster roll-out of charging points. If left to the market without strong additional policies, battery electric cars will reach only an 85 percent market share, and e-vans just 83 percent, in the EU by 2035 – missing Europe’s goal to decarbonise by 2050.

“With the right policies, battery electric vehicles and vans can reach 100 percent of sales by 2035 in western, southern and even eastern Europe. The EU can set an end date in 2035 in the certainty that the market is ready. New polluting vehicles shouldn’t be sold for any longer than necessary,” Poliscanova added.