Five years after governments set the clock ticking on the end of petrol and diesel, the industry is taking stock. New CO₂ targets, falling battery prices and revived incentives are powering EV growth, but affordability, infrastructure, and consumer confidence remain the real tests.

These will be front and centre at the GlobalData Automotive Europe 2025 conference (15-16 October), where industry leaders gather to assess what’s been achieved and what it will take to reach 2030.

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The automobile markets across Britain and the EU are at a pivotal point.

As Rachael Jones, Director of Automotive Finance at Autotrader puts it, “The ban on ICE vehicles was announced five years ago for 2030. We are at the midpoint now. It’s a time to reflect on what has happened in the last five years and look at what’s happening in the next five years.”

That is what Al Bedwell, the Director of Global Powertrain Research and Analysis, GlobalData and LMC will be doing at the Globaldata Automotive Europe 2025 event this month.

“Last year was a really disappointing year, where there was zero growth for battery across Europe. There were key reasons for that. There was a lack of major incentives, and the industry was holding back new products so that they could launch them this year when they will count towards the new CO2 target,” Bedwell tells us.

But things are changing.

“This year it’s different. We have got lots of new products coming into the market,” Bedwell says. “They are shifting away from the dominance of the premium segment in the Battery Electric Vehicle sector, so we are seeing better affordability.”

The need to comply with the new CO2 targets is boosting the market, even at a time when, as Bedwell points out, consumers are still feeling quite poor. It means the EV market is growing again. Across Europe the market is up 32% year-on-year towards August, where last year it was in negative territory.

“We are seeing strong EV uptake across Europe, with many countries starting to see around or over 20% of new car sales being battery electric,” agrees Vicky Edmonds, CEO of EVA England. “Within the UK, battery electric cars made up 26.5% of new car sales last month – driven largely by the UK Government’s ZEV mandate and parallel incentives (including salary sacrifice). But we are also seeing increasing consumer interest and trust in EVs, with our latest EVA England survey results suggesting that 95% of electric car drivers in the UK would never look back.”

The UK is the third biggest EV market in the world, just behind China and the United States. In the UK Electric Vehicles now make up a 22% share of the market.

“In the last few months EVs make up one in four new cars,” says Jones. “We did a survey asking consumers if they feel ready to switch to Electric Vehicles, and four out of ten of new and used buyers are saying ‘yes, I’m ready to switch’. For people under the age of 55 that figure grows to 47%.”

There still barriers for the market to overcome. One of those has traditionally been the choice of products.

“Today there’s 150 different electric vehicle models on sale from 50 different brands,” Jones shares. “Last year a new model launched every ten days.”

Another barrier is, of course, price. The EV market has generally slanted towards the premium end.

“Five years ago, we did the analysis and EVs were 59% more expensive than petrol or diesel cars. Today that figure is more like 20%,” says Jones. “We are not at price parity yet, but the price is coming down, making EVs more available for more people.”

A British success story

Jones is even pointing out examples of price parity in the used market. In Europe, the UK is one of the top performers.

“The UK’s doing pretty well,” Bedwell agrees. “We have the Zero Emissions Vehicle mandate in the background. That applies pressure to the OEMs to push product in the UK.”

Jones tells us, “Still a way to go to get to 2030 but it’s headed in the right direction.”

The UK is actually performing relatively well against the rest of Europe in the transition.

“It’s a major market in Europe and one of the better performing ones, better than Spain and Italy, while France has actually gone backwards a little bit. They cut their grant at the beginning of the year,” Bedwell says.

France has also taken away the grant for Chinese vehicles altogether based on the CO2 emissions created during production, effectively cutting them out of that market. Meanwhile, in the UK market Chinese brands are providing an injection of competition.

“At Carwow, we monitor consumer sentiment and awareness of Chinese car brands, and we are seeing growing levels of interest,” says Rob Buckland, Leasing Director of Carwow Leasey. “In early 2023, only 24% of respondents said they would consider a Chinese brand for their next vehicle; this has grown to 39% in the first half of 2025, showing a huge rise in positive consideration.”

Meanwhile, while Bedwell points out that Germany has yet to reintroduce any of its grants for consumers that want to buy a battery EV, it has invested money in infrastructure.

“Volkswagen, Europe’s largest automaker, increased its EV sales in the EU by an incredible 89%,” adds Lucien Mathieu, Cars Director at Transport & Environment. “With the 2025 EU emissions target looming, they upgraded their electric models and lowered their prices.”

Overall, Bedwell’s perception of the EV transition is cautiously optimistic.

“You couldn’t describe it as a boom, but you could say it’s getting back on track,” he concludes.

There are other perspectives, however.

“In the EU and the UK, thanks to regulatory targets, we are in the midst of an EV boom,” says Mathieu. “In the first seven months of 2025 alone, European manufacturers’ EV sales grew by almost 40% in the EU. Thanks to its ZEV mandate, the UK is leading the way with 21% of cars sold being fully electric so far this year. The EU is on 15%, held back somewhat by the decision to delay its 2025 target for carmakers to 2027.”

Incentives and regulation

At the same time, battery costs are set to fall by 27% between 2022 and the end of this year and are set to decrease by another 28% by 2027 compared to 2025 levels, according to T&E forecasts.

“Similarly, charging infrastructure has been deployed on 77% of the EU core highway network and all Member States have already met or surpassed the number of public charging points required by the EU’s 2025 target,” says Mathieu.

But Mathieu also argues that to continue to reap these rewards requires consistency.

“The market conditions are there for massive sales of affordable EVs,” he says. “Now is not the time to change the regulatory targets in the EU or the UK.”

Buckland also points to the impact regulations and incentives have yielded. SMMT registration data and Carwow Group’s configuration and enquiry data indicate that EVs consistently outperform petrol and diesel models, and have taken an increasing share of the market in 2025.

“Fleet and business registrations remain the driving force behind the increasing EV sales, which goes some of the way to helping OEMs hit their targets under the ZEV mandate, but clearly much more needs to be done to accelerate uptake,” Buckland says. “The Electric Car Grant was very welcome news, and it has clearly heightened interest in EVs.”

After the initial grant announcement in early July, enquiries placed with dealers via Carwow for EVs priced below the qualifying £37,000 increased by 124%, week-on-week. Even EVs priced above the threshold benefited, with a 57% rise in enquiries over the same period, reflecting a general improvement in EV consideration and purchase intent across the segment.

Continuing challenges

A lot of progress has been made in the last five years, but everyone we speak to agrees that there is still a lot of work left to do to hit the 2030 targets, and Price continues to be the leading stumbling block.

“When we speak to drivers, the upfront cost of purchasing an EV can still be a real concern. When drivers do choose electric, it is increasingly because they are being offered favourable financing rates through company salary sacrifice schemes,” says Edmonds. “For the EV sector, including the motor finance sector, this is a significant opportunity as we know that once drivers go electric, they rarely look back.”

However, as Edmonds tells us, the majority of these schemes target the new car market and only a few cover the second-hand market, preventing significant penetration.

“Most of us buy our cars on that used car market, and a greater number of financing schemes that target second hand EVs would allow many more consumers to access the benefits of driving electric,” Edmonds says.

Of course, with the used market comes another recurring obstacle to the switch to EV. Just how much, and for how long, is that EV going to maintain its value?

“We still see the fear people have around residual value and buying used Battery Electric Vehicles. The evidence is starting to show that these fears are pretty much unfounded,” says Bedwell. “Vehicles are being built with a good battery management system in place. Technology is improving. It is pretty hard to wreck your battery by charging it in the wrong way, and the EU is bringing in durability standards, giving confidence to the whole sector.”

Jones also points out how tough it has been to establish valuations for EV, but adds that this is changing as demand increases.

“In the under five year old used car market, EV demand has risen against supply again, but this will need to continue to avoid further Residual Value pressure,” Jones explains. “We currently see from a supply point of view that 11% of under five year vehicles listed on Autotrader are EVs, whereas the lead share is higher at 17% giving a positive outlook”

Jones also points to another issue that will be crucial to the transition.

“It needs to be a fair transition,” she insists. “35% of divers don’t have access to off-street parking, so they have to rely on public charging.”

That becomes a real issue when home charging costs 8p a mile versus 25p a mile for public chargers. This is an area where some in the car finance sector believe there is an opportunity, however.

“While the recent UK Government grant helps with the cost of acquiring an EV, at Leasey we’ll be taking this one step further by helping the UK’s drivers mitigate concerns about charging costs,” Buckland says.  “All new EV customers of Carwow Leasey will receive a 20% discount at Gridserve, the nationwide charge point operator network.”

But Transport & Electric is arguing that the leasing sector is one that should be doing more to promote the shift to EV. A spokesperson for the organisation has pointed out that half of all new cars in Europe are leased and leasing companies’ market share is forecasted to reach 70% in 2030. But no large leasing company has committed to stop financing new ICE vehicles in Europe, even after 2035, when the EU plans to ban their sale.

“Creating leasing solutions for used cars will be key for making EVs more accessible for more people, and consumer confidence can be further enhanced with battery health reports. Ideally, we need standardisation in approaches, such as the energy ratings that can be checked when purchasing white goods,” Buckland tells us.

Next steps

As we enter the second half of the 2020s, we have a better idea of which tools are effective, and what needs to be done to achieve our zero emissions goals.

“Incentives are crucial, and we’ve seen brands, especially newer entrants from China, respond to the ECG by offering discounted pricing to encourage consumers to consider EVs,” says Buckland. “There has also been strong consumer interest in cars eligible for the Grant, with the Ford Puma Gen-E becoming the most-enquired model on Carwow in September, following the news of its eligibility for the full £3,750 discount.”

Captive finance houses in particular are in a position to really support the transition to EV, and they have already provided strong APR rates, deposit contributions and incentives to make EVs more accessible to consumers.

“Quite often the finance offer is to help bring the real price down,” Jones says.

“The motor finance sector is uniquely positioned to connect the many moving parts of EV ownership into one seamless experience; bringing together the monthly cost of the car, servicing, insurance, and even the electricity tariff in a single, transparent package,” Buckland observes. “By going into partnership with other service providers, the sector can show that living with an EV is both accessible and affordable.”

Ultimately, it all comes down to the triumvirate of needing more vehicles, that are more affordable and supported by more infrastructure. Bedwell argues that we are already on our way there.

“We’re just plugging the gaps that exist in terms of creating an environment where people feel there’s no downside to shifting to Battery Electric Vehicles,” he says. “I think it will take until the end of the decade and beyond, but I get the feeling that the technology is moving quite quickly.”