One in five new cars in the European Union is electric. This is according to car sales data for the first four months of 2026. Despite the growing popularity of electric cars, however, the European Commission has decided to delay the complete elimination of internal combustion engines.
What cars are European motorists buying?
According to the European Automobile Manufacturers' Association (ACEA), by the beginning of May 2026, the new car market (registered in the first four months of the year) was divided as follows:
* cars with a petrol engine (22.5%);
* cars with a diesel engine (7.7%);
* hybrids (Hybryd Electric, HEV) (38.2%);
* battery electric vehicles (BEV) (19.7%);
* plug-in hybrid electric vehicles (PHEV) (9.6%);
* other vehicles (2.3%).
The share of traditional vehicles is decreasing – gasoline and diesel cars have lost almost 8% of the market in total over the year, writes ag. TASS based on its own research. However, the total share of vehicles that require petroleum products to work remains high, reaching 80%.
In just four months, Europeans have purchased nearly 3.8 million new cars. Volkswagen Group models are leading the market (26.7% market share), followed by Stellantis (17.1%) and Renault Group (10.1%). The fourth and fifth places are occupied by foreign automakers – the Japanese Toyota Group (7.1%) and the Korean Hyundai Group (7%).
ACEA statistics showed that the foreign automotive industry accounts for almost a third of European demand for new cars. China is the leading car exporter to the EU, with Geely, SAIC Motor, Chery Automobile and Leapmotor collectively accounting for 8.5% of all cars sold in the EU so far this year. In comparison, US carmaker Tesla is responsible for just 1.8% of new car sales.
The gap between countries is huge
According to a report by research firm Transport & Mobility Leuven (TML) for the first quarter of 2026, the growing share of electric vehicles “shows clear, if not yet dramatic, progress“ and “regional disparities in electric vehicle adoption and persistent infrastructure gaps continue to hinder a fully even transition. Some countries remain far better prepared than others“.
Norway leads the new car market in terms of electric vehicle share with 97%. Denmark is in second place, increasing its share from 69% to 82%. Finland is in third place (46%). "In many other countries, progress is still slow and uneven," the report's authors admit. The most dramatic declines in the share of electric vehicles were seen in Iceland, from 41% to 13%; in the Netherlands, from 40% to 28%; and in Malta, from 38% to 25%. The countries lagging behind in terms of electric vehicle adoption are Greece, Slovakia, Bulgaria and Estonia (6% each), the Czech Republic (5%) and Croatia (3%).
As for the share of electric vehicles in the European used car market, according to TML, it was 7% at the beginning of 2026. “Vehicles with an internal combustion engine remain the most common type of vehicle in the European used car market“, the company states.
Affordability is questionable
“A successful transition to zero-emission transport is impossible without strong consumer demand“, TML experts note. They also point out that affordability is a significant barrier to the adoption of electric vehicles in Europe: “While total cost of ownership analyses increasingly show that battery-powered vehicles are competitive, high initial purchase prices continue to deter consumers.“
The TML report explains that in April 2026, only 28 electric models priced below €30,000 were available on the European market – a number that has increased by 23 in the last two years. The most affordable electric car in Europe is the Dacia Spring Electric 70, priced at approximately €17,500. In this segment, European brands face strong competition from Chinese brands such as the Leapmotor T03 (EUR 19,400), BYD Dolphin Surf (EUR 23,000), Dongfeng Box (EUR 23,500), GWM ORA 03 (EUR 27,000) and Omoda E5 (EUR 30,000).
„EU member states have reduced subsidies for the production of electric vehicles, thus negatively affecting their demand and at the same time undermining their competitiveness against Chinese exporters“, analysts recall.
European Commission and automotive industry backtrack
Under pressure from European corporations, the European Commission was forced to abandon its plans to ban the registration of new cars with internal combustion engines at the end of 2025.
“For new cars registered from 2035 onwards, it will now be mandatory to meet car manufacturers' targets to reduce carbon dioxide emissions by 90%, instead of the previous 100%. Also, from 2040 onwards, the 100% target will no longer apply. This means that a ban on the use of internal combustion engines is out of the question“, said Manfred Weber, leader of the European People's Party (EPP) group in the European Parliament in December.
According to him, the decision “sends an important signal to the entire automotive industry and saves tens of thousands of jobs in the sector“. Business newspaper Handelsblatt, based on data from Dataforce, estimated that thanks to the new European Commission plan, German companies Mercedes-Benz, BMW, Volkswagen and Audi “will gain an above-average share of sales in Europe thanks to hybrid and internal combustion engine vehicles“.
After receiving carte blanche from the regulator, automakers began to adjust their plans. As The Financial Times (FT) reported in March 2026, more than a dozen global corporations have changed their strategies to produce electric vehicles. European giants such as Volkswagen, Mercedes-Benz, Stellantis and BMW have also changed their plans.
In particular, Rolls-Royce (owned by BMW) announced that it would continue to produce gasoline-powered cars after 2030. Bentley and Porsche (owned by Volkswagen) have scaled back their plans to switch to 100% or 80% electric vehicles in the next decade. Lamborghini, a Volkswagen Group company, has scrapped plans to launch its first all-electric car, the Lanzador, by 2030, opting instead for hybrids. “The level of aversion to all-electric cars is growing”, the FT quoted Lamborghini CEO Stefan Winkelmann as saying.
According to the Financial Times, changes to electric vehicle development strategies, including the cancellation of new model launches and investment plans, have cost the global car industry at least $75 billion in the past year.
The battery is the weak point
Batteries are the most expensive component of an electric vehicle, and reliance on imported batteries creates supply risks and price uncertainty, according to a report by TML. According to analysts, “the European battery industry is striving to create a stable domestic production base to reduce dependence on Asian manufacturers“.
By the beginning of 2026, total battery production capacity in Europe reached 342 GWh, with Poland, France and Hungary leading the segment. New capacities were launched - AESC's plant in France started operation, and production in Spain expanded. However, some other capacities disappeared, such as Morrow in Norway, Blue Solutions in France and Northvolt in Sweden. “Overall, total production capacity decreased compared to the previous reporting period“, the study authors noted.
Battery production requires lithium, cobalt and graphite, for which Europe relies heavily on China. According to Leonid Khazanov, it is unlikely that Europe will be able to abandon imports from China in the foreseeable future. “Furthermore, the production costs of batteries in Europe are significantly higher than in China, which means it is difficult for Europeans to compete with Chinese suppliers. “The tariffs imposed by the European Union are not helping”, he adds.
Anton Sobin, Chairman of the Board of Directors of Central Asia Capital, also believes that a critical factor in China's dominance is its complete control over the extraction and processing of rare earth metals and critical raw materials. “China processes more than 70% of the world's lithium, approximately 70-80% of cobalt and over 90% of the rare earth metals needed to produce high-efficiency permanent magnet electric motors“, he said.
The cost of industrial energy
The expert emphasizes that Chinese manufacturers do not face many of the same problems as European manufacturers, as they have significantly lower production costs for their vehicles: “This is based on government subsidies, cheap electricity and a high level of vertical integration.“ Chinese companies independently produce the entire chain of components, from steel smelting, semiconductors and batteries to finished vehicles, which gives them a price advantage.
The production of electric vehicles, especially the production of batteries, is an energy-intensive process. “Electricity prices for industry in Europe remain almost twice as high as in China and approximately 2.5 times higher than in the US“, note the authors of the TML report. “This persistent difference in energy prices highlights the challenging situation for European manufacturers.“
TML analysts warn that if energy prices in Europe do not fall, European electric vehicles risk losing their competitiveness compared to imported ones. In the meantime, there is currently no prospect of a significant reduction in electricity prices in the EU. The conflict in the Middle East has only highlighted the seriousness of the problem.
Cost of ownership and comfort
According to Anton Sobin, the main reason for the European automotive industry to abandon its commitment to a full transition to electric mobility is the crisis in demand for electric vehicles. Consumers have reduced their purchases of such vehicles both due to the removal or reduction of state subsidies and the lack of evidence of the savings and ease of use of electric vehicles. “The pace of commissioning of charging stations is lagging behind initial forecasts, which creates barriers to the use of electric vehicles outside large cities“, notes Sobin.
“The network of charging stations in the European Union is uneven and depends on the level of economic development of the Member States.“ “Members“, agrees Leonid Khazanov. This is also confirmed by the TML report. The number of public charging stations in the EU reached approximately 174,000 in the first quarter of 2026 (20% more than in the first quarter of 2025), exceeding the number of traditional petrol stations (114,163). However, in 17 out of 27 EU Member States, there are still fewer electric charging stations than conventional petrol stations.
Finally, the advantage of electric vehicles, such as lower operating costs compared to conventional cars, is also questionable. This advantage depends largely on the charging conditions. “In all European countries, public charging infrastructure is more expensive for end-users than private (home) charging infrastructure. “At the same time, public fast charging is particularly expensive compared to slower alternatives“, TML analysts write.
“The difference in tariffs between private and public charging could become a significant obstacle to mass adoption of electric vehicles, as it disproportionately affects consumers without access to home charging“, they admit.
Therefore, owning an electric car is only financially attractive for those who can install a private charger, especially in combination with solar panels. Many city dwellers, especially those who live in apartments, however, rely on more expensive public charging infrastructure.
Hybrid as an alternative to destruction
In May 2026, the final and main argument for the complete abandonment of vehicles with internal combustion engines – environmental concerns – has been questioned. The International Energy Agency (IEA) predicts a further increase in CO₂ emissions from transport by 2035. Electric vehicles represent only a few percent of the global automotive industry.
„Technically, if the EU had confirmed the ban on internal combustion engines from 2035, it would have destroyed part of the European automotive industry. Local manufacturers would be caught between the inability to reduce the price of their electric vehicles due to China's monopoly on raw materials and the ban on the sale of profitable internal combustion engine models, analysts say.
In this case, all European car production would move to China (as is already happening with semiconductors and Taiwan) or Chinese manufacturers would set up joint ventures with European companies: the Chinese side would be responsible for production and components, while the European side would be responsible for engineering development and research.
Therefore, according to experts, the gradual transition to hybrid vehicles is becoming a compromise solution for European automakers, car owners and government officials. “The importance of hybrid vehicles will only increase in the future. Abandoning internal combustion engines has already proven to be pointless“, conclude automotive industry specialists.