According to the NGO Transport & Environment, European carmakers sold 38% more electric cars in the first seven months of the year, ensuring that all but Mercedes-Benz are on track to comply with the EU’s 2025-27 emission targets, new T&E research finds.

However, the two-year extension of the targets allowed carmakers to take the foot off the gas and will lead to 2 million fewer electric cars being sold between 2025 and 2027 than under the original deadline. T&E calls on the EU Commission to stand firm over the 2030 and 2035 targets when it hosts a strategic dialogue on the future of the automotive industry this Friday (EU Commission President Ursula von der Leyen will meet the European car industry).

Most European carmakers are on track

Thanks to the two-year extension for meeting the CO2 targets, most European car makers are on track to meet the European 2025-2027 emission targets, even without pooling.

BMW, Renault, and Volkswagen are expected to meet their 2025-27 emissions targets, according to T&E’s EV Progress Report. BMW would be 13 grams per kilometer (gCO₂/km) overcompliant with the maximum average emissions allowed under EU law between 2025 and 2027.

Stellantis and Renault would be 9 and 2 gCO₂/km overcompliant, respectively, while Volkswagen will narrowly comply with no margin (0 gCO₂/km) to spare.

T&E points out that Mercedes-Benz, which holds the presidency of the EU auto lobby ACEA and is the loudest opponent of the EU targets, is the only European car manufacturer that would fail to reach them on its own. It would be 10 gCO₂/km undercompliant and would need to pay Volvo Cars and Polestar to purchase credits from them in a so-called pooling deal.

EU under pressure

“The EU is under pressure from carmakers to weaken their 2030 and 2035 emissions targets, and earlier this year, it gave a significant concession to the industry by extending the 2025 target deadline by two years,” stipulates T&E.

“Carmakers responded by increasing the price premium of electric models over combustion cars to 40% in June, up from 30% in early 2025 [based on data research by Bloomberg Intelligence]. As a result of the target extension, 2 million fewer electric cars are expected to be sold in the EU between 2025 and 2027,” T&E adds.

“This is despite positive market dynamics, which are pushing electric sales. 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,” T&E forecasts.

“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.

“OEMs are painting a terrible picture because they want their targets weakened. But the reality is that electric car sales are surging, and emissions rules are key to that equation,” says Lucien Mathieu, T&E cars director.

“By sticking to the agreed rules, Europe can give its automotive industry a fighting chance in the global EV race. But weakening the targets could see other manufacturers go the way of Mercedes, which is falling behind on electrification and must buy credits from its competitors,” he adds.

Chinese threat

While the EU is discussing further relaxation of its emission rules, global markets are going electric fast. India, Mexico, Indonesia, and Thailand have EV market shares of 5%, 5%, 13% and 24% respectively.

In the world’s largest car market, China, the BEV sales share will surpass 30% by the end of 2025. “These markets will expand rapidly in the next decade, says T&E, and unless Europe’s carmakers rapidly catch up now, Chinese manufacturers will dominate.

“European carmakers are living in cloud cuckoo land if they think China will stop innovating while they try to prolong the technology of the past. If the European Commission allows car manufacturers to stall on EV progress, Europe will lose ground on another key industry to global competitors,” Lucien Mathieu warns.

“We need a European automotive industry that leads on one of the critical technologies of the 21st century, not one that puts us on the path to becoming a car museum,” Lucien Mathieu concludes.