Driving change Cheap EVs are coming to Europe, but can they save its struggling car industry?

Affordable electric family cars made in the EU have been tough to come by in recent years.

- Jasper Jolly

There were no launches of homegrown electric models for less than €25,000 (£20,000) across the EU during 2022 and 2023, according to the campaign group Transport & Environment.

In the past few months that has changed. There has been a rush of new cars, including the Fiat Grande Panda, the Citroen ë-C3, the Hyundai Ioniq, the latest Dacia Spring and the Renault 5. Suddenly, buyers have options.

That is no coincidence. Stricter EU carbon emissions targets kick in on 1 January, meaning carmakers will have to sell more electric cars or face fines. New battle lines are being drawn: the industry wants the rules relaxed, while environmental campaigners are urging the EU to hold firm.

Carmakers around the world are struggling with faltering demand for their models, whether electric or traditional. Falling profits have come at a difficult time, just as the industry tries to fund the expensive transition to electric vehicles.

It has been a record year for electric car sales, driven by the extraordinary growth of China's industry. But the market in Europe has gone through a painful slowdown.

A key factor in the decline has been the withdrawal of generous subsidies for new electric cars in Germany. Will Roberts, of the consultancy Rho Motion, said the end of €5,000 in incentives for each car was "quite a difficult thing to get over" for consumers in the EU's largest car market. He said turmoil in German politics meant there had "not been any political motivation or societal motivation to turn that around". France has also had a slowdown in EV sales, possibly not helped by the country's own political uncertainty.