Despite being a smaller overall vehicle producer than either North America or China, Europe has managed to punch above its weight in the early global electrification shift. “If we’re comparing Europe with North America, it’s clear that electric vehicle (EV) penetration is significantly higher in the former," says Eric Hannon, Partner at McKinsey & Co. He tells Automotive World that this is due to three factors: a clear and cohesive regulatory environment, the sheer availability of EV models, and higher overall consumer demand. “There has also been more European investment in charging infrastructure and maintenance,” adds Swarna Ramanathan, Partner at McKinsey. “This has directly emboldened consumers and built confidence in the technology.”
“In Germany alone, all-electric vehicle penetration reached 18% in 2022, while North America was still only in single digits,” says Hannon. Norway’s figure of 79% puts this head start in even starker relief. Indeed, online market data company Statista forecasts that North America will only reach 10% EV penetration by 2025. However, cheap vehicle imports from China and a more favourable battery production environment in the US are both threatening European domestic manufacturing. The continent might be able to retain its lead in EV adoption, but how many will be made there?
