“The Electric Vehicle Revolution” is well under way, with fleets growing around the world, but the road ahead is not without bumps. China is the adoption leader, with Europe a distant second and the US a very distant third, says eToro analyst for Romania, Bogdan Maioreanu.
While Europeans have plenty of incentives to switch to EVs, insufficient infrastructure and costs for upgrading electrical networks might hinder the process and make the automotive industry in Europe lag behind its Chinese competitors.
Electric car sales topped 17 million worldwide in 2024, rising by more than 25%, according to a report by the International Energy Agency. Just the additional 3.5 million cars sold in 2024 compared to 2023 outnumber total electric car sales in the whole of 2020. China maintained its lead among major markets, with electric car sales exceeding 11 million, more than were sold worldwide just 2 years earlier. Global sales were slightly tempered by stagnating growth in Europe, as subsidies were phased out or reduced in several major markets, and as the EU CO2 targets for cars remained the same between 2023 and 2024.
Romania is currently one of the countries where subsidies are on hold. The Ministry of the Environment has not yet decided on the Rabla Program. All programs were halted on June 18th, one day before Rabla program 2025 initial launch date, to wait for the new Government formation. Now, with the new austerity measures in place, the ministry is considering whether to unblock or cancel altogether the program that provides subsidies for the purchase of low-emission cars. Minister Diana Buzoianu says that the final decision will be made in the second package of measures prepared by the Ilie Bolojan government.
Before being halted, the budget for the 2025 Rabla Program amounted to 1.43 billion lei, almost 50% higher than the 2024 budget. The eco voucher for electric cars would have been increased to 7,500 euros, compared to the previous value of 5,000 euros. But as the Bolojan government is working to reduce the budgetary deficit, it is not sure if this amount will remain in place. But tax rebates or vouchers such as Rabla are not enough. To boost lagging EV adoption, there must also be a very well-structured program of EV charging infrastructure in place. And this is not cheap.
In Europe, In the first five months of 2025, new battery-electric car sales captured 15.4% of the total EU market share, according to the European Automobile Manufacturers’ Association (ACEA), higher than the 13.2% in 2024. In Romania, in the same period, the BEVs were only 5.2%, lower than the 6.2% in 2024. Despite this trend, the EVs adoption is at a crossroads according to a recent report by the Centre for European Policy Studies (CEPS), supported by ACEA.
The main pain point of EV adoption is the charging infrastructure. The report notes that an estimated €172 billion investment is needed for its development by 2030. Progress is hindered by administrative bottlenecks, slowing the deployment of necessary charging stations. It is enough to look at countries with extensive charging infrastructure like Norway, where in the first five months of this year, almost 93% of new cars sold were battery-powered EVs (BEVs). This shows that infrastructure is paramount when deciding what kind of car to buy as buyers considering a switch from combustion engines want to retain their autonomy and are turned off when they find few charging options when traveling, with hybrids filling the gap for now.
Another obstacle is the high production costs of BEVs, whose prices average around €45,000, which is much higher than the average consumer’s willingness to pay (about €20,000). This cost gap makes EVs less accessible to mainstream consumers and slows adoption. Also, the transition from internal combustion engine vehicles (ICEVs) to EVs could reduce the share of European value added in vehicle production from 85–90% (ICEVs) to 70–75% (BEVs). This shift threatens the region’s industrial competitiveness and economic contribution from the automotive sector.
EVs rely on imported Battery Cells, as Europe currently imports up to 70% of its battery cells, primarily from China. Achieving battery self-sufficiency would require about €42 billion in annual investments in EU battery production until 2030. And this is not easy. Today, China produces over three-quarters of the batteries sold globally, and in 2024, average prices dropped faster there than anywhere else in the world, falling by nearly 30%. Also, Chinese batteries are an estimated 30% cheaper than their European counterparts and 20% cheaper than in the US, according to the IEA. Onshoring the production requires a significant change in supply chains but also know-how.
Ultimately, the transition requires a fundamental transformation of supply chains, manufacturing processes, and workforce skills. Without addressing these structural and financial barriers, Europe risks falling behind in the global automotive market. And this comes with the risks that traditional European manufacturers, including the ones that are currently producing in Romania, lose their edge against the cheaper Chinese competitors. While the Chinese automotive industry looks to have a clear direction, the rest of the world is still trying to find one. For now, hybridization looks like the current trend in Europe, but without proper legislation and financial support, finding the right direction might be a very difficult task for the automotive industry.
