Europe stands at a pivotal moment in its transition to sustainable transport, with electric vehicles (EVs) seen as a key solution for cutting emissions. Yet EV uptake has been uneven across the continent, ranging from frontrunners like Norway to laggards such as Greece, which rem
...
Europe stands at a pivotal moment in its transition to sustainable transport, with electric vehicles (EVs) seen as a key solution for cutting emissions. Yet EV uptake has been uneven across the continent, ranging from frontrunners like Norway to laggards such as Greece, which remain in the early stages of adoption. This disparity forms the backdrop for the present research, which explores whether lagging countries are beginning to catch up and what drives EV adoption across Europe. The focus is on both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs).
To address these questions, the study conducts a panel data analysis using data from 30 European countries over the period 2014-2024. The dataset is comprehensive, including financial incentives (such as purchase rebates, VAT exemptions and annual circulation tax benefits), charging infrastructure (number of public charging points) and various socioeconomic factors (real disposable income, diesel and electricity prices, income inequality, unemployment, inflation and VAT rates). Using fixed-effects panel regression, the analysis evaluates how each factor affects a country’s share of new EV registrations. In addition, a β-convergence analysis is performed to test whether countries with lower initial EV adoption have been growing faster in EV uptake.
Findings indicate that financial incentives and infrastructure availability are important drivers of EV adoption, though their impacts differ between BEVs and PHEVs. For BEVs, direct purchase incentives and tax exemptions show a strong positive effect. Likewise, countries offering annual tax relief for BEVs see greater BEV adoption. The expansion of public charging infrastructure emerges as another key enabler. Higher diesel fuel prices also increase BEV adoption, consistent with a substitution effect, meaning that as fuel becomes more expensive, consumers are more inclined to choose BEVs. In addition, higher disposable income strongly facilitates BEV adoption whereas factor like unemployment or inflation showed no effect during the study period. Notably, electricity prices did not have a significant impact on BEV adoption, making diesel price spikes more influential on consumer choices. Finally, the analysis found that rebates are effective in countries where charging infrastructure is strong, electricity prices are low, and diesel prices are high.
On the other hand, PHEVs showed a different picture. The analysis finds that many financial incentives which boost BEV adoption have no significant effect on PHEV adoption. The one incentive with some impact was the annual circulation tax reduction. Instead of upfront purchase incentives, PHEV adoption appears more strongly driven by other factors such as infrastructure and income. Additionally, diesel prices also play a role, suggesting that when fuel becomes more expensive, consumers aiming to reduce fuel costs tend to bypass PHEVs in favor of full BEVs, since PHEVs still rely partly on diesel. In other words, a costly fuel environment makes the partial electrification of PHEVs less attractive relative to going fully electric. Moreover, PHEVs uptake seems more sensitive to unemployment rate. Higher unemployment rates result in lower PHEV adoption, possibly because consumers and companies become more hesitant to invest in new vehicles during uncertain economic times.
The convergence analysis provides encouraging evidence that EV adoption rates are becoming more aligned across Europe over time. For BEVs, convergence is strong, suggesting that a country that initially lagged in BEV uptake can halve the difference in market share within 1.2 years and projections suggest that about 95% of the initial disparity would disappear within roughly 5 years. PHEV adoption is also converging across countries, but at a slower pace. The estimated half-life is 1.7 years, with 95% convergence expected to take around 7 years.
These insights carry important implications. Achieving Europe’s climate goals will require broad EV uptake in every country, not just frontrunners. The EU’s goal to phase out new Internal Combustion Engine (ICE) vehicles by 2035 means widespread electric adoption is essential. This research shows that well designed policies make a difference. In detail strong purchase incentives and investment in charging infrastructure can accelerate adoption, helping slower moving countries to catch up. Just as importantly, higher levels of disposable income have been shown to significantly enhance EV uptake, suggesting that economic conditions matter. Policymakers can craft strategies that combine financial support, infrastructure and affordability to ensure no country is left behind in the transition. If all European nations continue converging in EV adoption, it will significantly strengthen the region’s ability to meet its climate targets.
