Geely EX2 (Photo by Alexander Bogatyrev/SOPA Images/LightRocket via Getty Images)

SOPA Images/LightRocket via Getty Images

Europe’s EV sales surge was driven by government subsidies, tax breaks and affluent, early adopters, with a little bit of help from high prices at the gasoline and diesel pumps. The next battle is for the mass market and that means EVs must be small and cheap.

Typical new EVs so far have been massive and pricey SUVs costing an average of around €45,000 ($53,000) after tax. Effective range has been under 300 miles. Prices have been edging down with many new EVs falling to around €20,000 ($23,400), with a couple of pioneers like the Leapmotor TO3 and Renault’s Dacia Spring pushing €15,000 ($17,700).

The next phase, generated by government edicts rather than personal choice, will determine whether EVs become a mass-market success and that depends primarily on price. And if they’re cheaper, they’ll be quite a bit smaller; tiny even. Following Japan’s Kei-car model, €10,000 ($11,800) is the target for a basic 2+2 vehicle with 100 miles of range and top speed of 65 mph.

According to Reuters, citing trade association E-Mobility Europe and researcher New Automotive, EV sales in Europe jumped by almost a third in the first quarter – up 29.4% to almost 560,000 and up 51.3% at over 240,000 in March compared with the same time last year. The trouble is, these record sales only accounted for a market share of 21.2% of all new cars and SUVs and probably need to at least triple by 2030 and reach almost 100% of the market by 2035, under European Union carbon dioxide emissions rules.

Even tougher in Britain

It is even tougher for operators in Britain, which has a series of rigid market share targets with 80% mandated for 2030 and 100% for 2035.

Most mainstream forecasters agree that these 2030 targets aren’t likely to be met. Investment researcher Jefferies predicts a European EV market share of 42%, representing 5.6 million new car sales in 2030. Dataforce of Germany says about 46%, Counterpoint Research around 40%, and Schmidt Automotive Research 41.7% for Western Europe, including the big five markets of Germany, France, Britain, Italy and Spain. EU rules don’t demand a specific market share for 2030. Manufacturers must cut CO2 emissions to 49.5 grams per kilometre and that would mean a market share of probably about 60%.

JATO Dynamics analyst Steffen Michulski said Europe’s EV challenge is no longer about technology or willingness, it’s about price and relevance.

“The current EV offer is still too large, too heavy and too expensive to drive mass adoption. Without a rapid shift towards genuinely affordable small cars, Europe’s 2030 ambitions will remain out of reach. Small, genuinely affordable EVs are the missing link,” Michulski said.

“The rapid growth phase of EVs so far has been skewed towards premium and upper‑mainstream vehicles, supported by subsidies, company car tax advantages, and early‑adopter behavior. That model is exhausted. The next wave has to come from mass‑market urban customers, many of whom simply cannot justify €30,000–€40,000 ($35,300-$47,000) vehicles—EV or otherwise. This is where the idea of €10,000–€12,000 ($11,800-$14,100) “mini EVs” becomes critical,” Michulski said.

Increasingly difficult to achieve

Hong Kong-based Counterpoint Research senior analyst Murtuza Ali says Europe’s EV market share for 2030 looks increasingly difficult to achieve. He reckons the target is more equivalent to the U.K.’s 80% of sales.

“Europe’s EV transition has been constrained by affordability, despite strong policy support. However, in the past year, we have seen a significant shift from European automotive players to roll out more affordable models under €25,000 ($29,400) – Renault 4, Renault 5, Fiat Grande Panda, and the recent launch of the Volkswagen ID Polo are all pitched at the affordable end of the market,” Ali said.

Before regulations to boost EV sales, entry-level internal combustion engine vehicles like the Fiat 500, Ford Ka, Citroen C1, Peugeot 108 and Renault Twingo, sold in big numbers starting at around €10,000. As part of the plan to force people out of ICE vehicles and into EVs, the EU tightened emissions rules, which soon made them too expensive.

“Their discontinuation has left a vacuum. EVs costing around €15,000 ($17,700) designed for a smaller range of between 100 and 150 kilometres (60 to 90 miles) and modest performance could see strong demand, as they meet everyday mobility needs without requiring large batteries or expensive charging infrastructure. This market has also gained the attention of Chinese automakers with Geely expected to bring their newly launched affordable hatchback EX2 and Chery also considering the launch of their newly launched Lapas L4 small SUV, bringing choice for consumers shopping in the €15,000 to €20,000 range,” Ali said.

Not much of a dent

More of these small models will also help automakers reach the Euro 7 overall fleet average emission standards for 2030, where an average 55% reduction is targeted compared with 2021 CO2 emissions, Ali said.

Benjamin Kibies, Senior Automotive Analyst at Dataforce, said new entry-level EVs would be popular, but wouldn’t make much of dent in market share.

“Looking into historic data, mini cars made up for 1.2 to 1.3 million new registrations per year in the middle of the last decade, but that was within a larger total market. The market share was typically around 9%. So even a revitalized and fully electrified Kei-car class could not push the market to 80% electrification,” Kibies said.

“Even so, these minicars have been fully functional vehicles with 5 seats, and feasible for highway speed. A constrained variant: 150 km of range – make it 100 km in winter – and limited highway speed will certainly find its target group, but I’d estimate the market potential below 300,000 per year,” Kibies said.

When the European Union introduced its rules in 2023 to ban CO2 emissions from cars and SUVs by 2035, it must have known Europe’s automakers would soon be outclassed by Chinese manufacturers.

Climate more important than jobs

Politicians presumably believed that climate change mitigation was more important than auto jobs in Europe. In the event, it was forced to introduce import tariffs to slow the Chinese incursion. But these tariffs, of between 20 and 45%, hardly made a dent in China’s overwhelming manufacturing efficiency and technological advantage.

JATO Dynamics Michulski said this presents an uncomfortable question for Europe.

“Who actually builds these cars? Technically, European manufacturers can do it - but economically and organizationally, they are not set up for it yet. Their cost bases, platform strategies, software overhead and dealer structures are optimized for higher-priced vehicles. Even current “small” European EVs land closer to €20,000 than €10,000 once margins and regulations are factored in,” Michulski said.

“Chinese manufacturers, by contrast, already have scale, battery sourcing and ultra‑lean vehicle concepts aligned with this segment. Leapmotor (now allied to Stellantis) , Wuling, BYD and others have real experience producing exactly the kind of cars we’re discussing,” according to Michulski.

“80% EV share by 2030 is unrealistic under today’s product mix. But with a rapid emergence of truly affordable mini EVs—especially for urban and suburban use—the numbers stop looking impossible and start looking merely difficult. The irony is that Europe may need Chinese playbooks, and possibly Chinese partners, to make its own decarbonization goals achievable.”

Leapmotor TO3

Electric motor – 95 hp

Torque – 158 Nm

Gearbox – one-speed

Battery – 37 kWh

Claimed range – 165 miles (WLTP)

Drive – front wheels

Acceleration – 0-60 mph 12.5 seconds

Top speed – 81 mph

Price - £15,995 ($21,800) to £16,645 after tax