Sales of Sub-€25,000 Electric Cars in Europe Set to Rise Sevenfold
EU CO2 targets drive launch of nearly 40 new electric models in first half of 2026, doubling options under €25,000.
Sales of electric vehicles with a starting price below €25,000 in Europe are projected to increase by a factor of seven in 2026 compared to 2024, according to a new report from transport and environment group T&E. The surge is attributed to EU clean car regulations that have incentivized manufacturers to expand their affordable EV offerings.
What Happened
The T&E EV progress report indicates that EU car CO2 targets are driving a rapid expansion of the electric vehicle market. Nearly 40 new electric models were launched in the first half of 2026, bringing the total number of mass-market battery-electric vehicles (BEVs) to more than 150. Approximately 60 additional models are expected to be released by the end of the year, a rate nearly four times higher than the annual average of 15 new models seen between 2021 and 2025. During the period of flat targets from 2021 to 2024, manufacturers had limited incentives to introduce affordable models.
Why It Matters
The regulatory pressure is addressing consumer demand for lower-priced options. The number of electric models available starting below €25,000 has doubled, directly responding to market appetite that previous offerings failed to meet. Lucien Mathieu, cars director at T&E, noted that Volkswagen’s ID. Polo received over 40,000 orders and a 10-month waitlist, challenging previous industry claims that demand for small, affordable EVs was lacking. The report suggests that the issue was not consumer interest, but rather the limited inventory provided by manufacturers during years with less stringent targets.
Beyond model availability, the shift to electric is being reinforced by energy cost dynamics. The report states that an oil price shock has cost EU road users €53 billion. As of mid-September, filling a 50-liter tank of diesel cost €30 more than before the recent Iran war tensions. Switching to an electric vehicle at the start of this crisis would have saved drivers approximately €350 in running costs by mid-September. Consequently, BEV sales in the EU hit record levels, with 1.64 million units sold between January and August, a 45% increase year-over-year. In the second quarter of 2026, BEVs outsold pure petrol cars for the first time, achieving a 22% market share.
The Bottom Line
T&E warns that weakening the EU’s 2030 and 2035 targets could halt the ramp-up of affordable EVs, potentially reducing the availability of sub-€25,000 models by nearly three-quarters. The group argues that maintaining strict regulations is essential for European manufacturers to remain competitive in the global EV race and to reduce dependency on costly imported oil.
