Europe Beats China for World's Top EV Growth Markets

China’s dominance in electric vehicle (EV) sales and production is expected to be unmatched for many years, Europe has grabbed the lead in regard to its market share of total car sales, car inventories and sales per million people.

China has hogged the EV limelight over the past decade amid bold moves to transition to cleaner transport and energy systems and seize pole position in EV production.

Simultaneous build-outs of key segments of the EV supply chain, such as critical battery manufacturing capacity, cemented China’s status as the most critical cog in the global EV machine, particularly on the supply side.

But in terms of EV demand growth relative to total auto demand, Europe has established its own areas of dominance, notably in the Nordic countries, where EVs accounted for more than half of all cars sold in 2021, according to International Energy Agency (IEA) data.

High income levels among a climate-conscious populace, strong government support for electric vehicle purchases, and extensive public-private build-out of key EV charging infrastructure have been key supportive factors behind Europe’s adoption of EVs.

Europe’s EV demand is expected to accelerate in the coming years as the region grapples with an energy crisis following Russia’s invasion of Ukraine, which has sent power prices soaring and fomented widespread support for accelerating the energy transition away from fossil fuels.

EV sales feature (IEA data)

An additional supportive element for EVs in Europe is the rapidly rising share of electric cars in the total pool of cars available to consumers there.

Nine of the top 10 countries ranked by the share of EVs in the total car stock are in Europe, seven of which had an EV share of 3% or more, IEA data shows.

The density of EV sales per population has been a key driver of this swell in EV stock.

While China is by far the largest EV-selling country, Norway, Germany, the Netherlands and the United Kingdom all had higher EV sales per million people in 2021.

That means that even budget-conscious potential car purchasers have a growing number of used as well as new EVs to chose from when they come to buy their next car.

Charging Infrastructure

The rapid roll-out of charging infrastructure is an additional supportive factor for EVs in Europe.

From 2016 to 2021, the number of public EV charging stations increased by 431% across Europe to more than 356,000, according to the IEA.

While that growth rate lags that of China (716%) and South Korea (5,197%) since 2016, the recent extensive commitments by European governments to fast-track the further rollout of EV-related infrastructure means steep increases in charging station availability is guaranteed in the coming years.

Even those who still have range anxiety in Europe have a larger proportion of plug-in hybrid (PHEV) vehicles to choose from compared to many of their peers in other regions.

More than 40% of the total EV stock in Germany, the United Kingdom and Norway are PHEVs, which can still run on traditional fuel as well as electric power.

With the PHEV share in China only 21%, and 32% at the global level, European buyers are better placed than most to chose from a deep and varied EV pool that meets their usage needs.

And with more charging stations and purchasing subsidies in the pipeline from governments that are eager to wean the population off expensive and high-emitting fuels, Europe’s collective purchasing clout looks set to keep climbing and may in time overshadow current EV leader China.