Only electric passenger cars will be sold in Europe from 2035 as a result of falling battery costs, economies of scale and increased support from governments, according to a new study by Dutch banking group ING.
According to the ‘Breakthrough of electric vehicle threatens European car industry’ report, compiled by ING senior economists Max Erich and Jurjen Witteveen, issues currently overshadowing electric vehicles (EVs) – such as range anxiety and pricing – “will be overcome within the next seven years.
However, the report warned European carmakers could lose out to rivals in the US and Asia who are already ahead in battery production.
“Currently, European car manufacturers are at the forefront of internal combustion engines (25% market share), but their share in lithium-ion production used in electric cars is only 3%,” the report said. “Therefore, it is likely that both Asia and North America will get a bigger foothold in the European car market due to their great supply of resources.”
The report said: “Looking at planned increases in battery production capacity, Europe’s share is not likely to rise soon. Out of all planned capacity or capacity under construction, only 3.5% is in Europe. Asia has moved into pole position and North America, with Tesla, is also expanding rapidly. European car manufacturers are considering investing in their own production capacity. Daimler has already taken the plunge. Most investments in Europe are however coming from major battery suppliers, such as LG and Samsung, both building battery plants in Europe.”
Continued improvement in battery chemistry and production methods should bring down battery pack prices towards $100/kilowatt-hours in 2025, the report said. This could theoretically see the retail price of (Volkswagen’s) current e-Golf equate to that of a petrol ICE Golf in 2023.