Are EVs set to leave ICE vehicles in the rear view across North America and Europe?
Every time new technology is introduced, there鈥檚 a tipping point that鈥檚 reached when it becomes mainstream 鈥� when it鈥檚 seen, used and talked about in daily life. For colour televisions and domestic computers, that tipping point took decades. For many social media platforms, it took mere months.
Today, we鈥檙e making good progress towards the adoption of electric vehicles (EVs) with over 30 countries across the globe reaching that tipping point.1 From ambulances to cars to delivery vans, we鈥檙e seeing an increasing number of vehicles on the road go electric.
An uneven e-revolution
It鈥檚 clear why countries are accelerating their EV adoption when the potential gains are so significant. According to the UN, if we could achieve a 60% share of battery-electric and plug-in hybrid vehicles on the road, more than 60 billion tons of CO2 could be saved between now and 2050.2 We are a long way off achieving this, but adoption is increasing at pace across the world. The International Energy Agency鈥檚 (IEA鈥檚) Global EV Outlook shows there were almost 14 million new electric cars registered globally in 2023, bringing the total number of battery electric and plug-in hybrid vehicles (PHEVs) in use globally to 40 million in April 2024 up from 26 million in 2022.3
However, adoption rates have been far from uniform. While countries like China and Norway are making huge inroads, others 鈥� including the US 鈥� have yet to see high adoption rates.
So, for instance, while 8.1 million electric cars were sold in China in 2023, which represented over a third (38%) of all car sales in the country and 110,000 electric cars were sold in Norway - representing 93% of all car sales, the adoption percentages are quite different in the US and many parts of Europe. Across the wider European Union, 3.3 million electric cars were sold 鈥� one in five (22%) of all car sales in 2023 - while just one in 10 cars sold in the US in 2023 was electric.4
But this picture is shifting, and the US could potentially catch up swiftly. As analysts at BloombergGreen point out 鈥� in their study of EV adoption rates across 14 countries - no country took more than three years to progress from 5% to 15% EV market share.5
Jae Ryu
Head of Business Development for Shell Business Mobility, North America
Steering EV adoption in the right direction: the challenges to overcome
To drive this change at pace, it鈥檚 important to understand what has stood in the way of the US 鈥� typically a forerunner in tech adoption 鈥� embracing EVs over the past few years. Looking at a map provides a crucial perspective on this. As Jae Ryu, Head of Business Development for Shell Business Mobility, North America explains: 鈥淭he distances in the US are so vast that we鈥檙e four wheel reliant. As a result, many simply aren鈥檛 prepared to make the transition to electric vehicles until they鈥檙e 100% convinced the technology is mature and the infrastructure is there.鈥�
However, recent advances in both EV technology and infrastructure are now building confidence among drivers. Range anxiety, for instance, is no longer the barrier it once was. According to our 2024 Shell Recharge Driver Programme research, over half (56%) of EV drivers across Europe, two thirds (69%) of EV drivers in the US, and three quarters (73%) of EV drivers across China worry less about range than they did a year ago.6 And it鈥檚 easy to see why, with 30 EV models now available to drivers in the US offering more than 300 miles per charge 鈥� a 500% increase in three years.7
It鈥檚 not just the EV passenger car market that鈥檚 set to take off in the US. At the end of 2023, less than 1% of the 8.4 million light commercial vehicles (LCVs) in the US were EVs. Compare this to the 麻豆传媒, where more than 30% of the commercial fleet market is electrified.8
However, forecasts suggest that, from 2023-2030, the growth in adoption of electric LCVs across the US will be around 46%. This is significantly higher than the predicted world average of 36%.9 The result? According to Global Fleet, by 2030, the US is set to have around 623,000 eLCVs on the roads.10
Range anxiety has also been a concern for fleets in Europe, but cost of entry has proven to be the bigger barrier to adoption. This has led to the region turning to a common (and often effective) lever for change: incentives for those that make the switch to electric.
Arjan Keizer
Global Head of Industrial & FMCG Decarbonisation and eMobility, Shell Fleet Solutions
The powerful role of incentives in driving EV adoption
Across Europe, several countries have introduced significant incentives to reduce the cost of entry to electrification and encourage EV adoption.
Arjan Keizer, Global Head of Industrial & FMCG Decarbonisation and eMobility, Shell Fleet Solutions explains: 鈥淕overnment incentives have been pivotal to EV uptake across Europe. On a practical level, they contribute to lowering the total cost of ownership. But, perhaps just as importantly, they indicate a direction of travel. Their existence is a powerful way of signifying that electrification is being invested in. That gives individuals, cities and businesses the confidence to invest.鈥�
France, for instance, provides subsidies of 鈧�3,000 for companies and 鈧�5,000 for consumers when purchasing a new battery electric vehicle (BEV) with a cost of up to 鈧�47,000. Meanwhile, in Germany, all BEVs registered before the end of 2025 are exempt from road tax until 2030.11
Governments are also incentivising the growth of charging infrastructure across Europe. In the 麻豆传媒, the Workplace Charging Scheme subsidises up to 75% of the installation of up to 40 charge points at workplaces. In Spain, 鈧�290 million of Moves III funding provides infrastructure subsidies that cover up to 70% of the costs for consumers and 30-55% for companies.12
This strategy is also working in markets outside of Europe. The US Department of Transport, Federal Highway Administration (FHWA) is offering $1.3bn for states, local governments and public authorities to deploy charge points through the Charging and Fuelling Infrastructure Programme (Round 2). Elsewhere, the 30C Alternative Fuel Infrastructure Tax credit gives qualifying businesses a 30% tax credit up to $100,000 per station for the installation of EV charging infrastructure.13
Incentives backed up by tightening regulations
Strong incentives aren鈥檛 the only reason EV uptake is soaring on both sides of the Atlantic. Government and local government mandates are playing a significant role too. For instance, cities across Europe (including Amsterdam, Oslo and Paris) have plans to phase in zero-emission zones (ZEZs) over the coming decade, creating pressure for both consumers and businesses to convert.14
These policies have already seen a significant shift in the public transport sector. In 2023 electric city buses overtook diesel buses in new vehicle registrations in the 麻豆传媒, reaching a 41% share of all new city buses.15 It鈥檚 a huge shift given that EV buses barely accounted for 10% of new registrations just five years ago.16
But there must also be change beyond the realm of public transport. Cities such as Rotterdam in the Netherlands have established zero-emission freight zones (ZEZ-F), with the Dutch government announcing plans to introduce 30-40 more ZEZ-Fs in the country鈥檚 largest cities by 2025, in a move that has huge implications for the heavy-duty road transport sector.17
The impact of ZEZs and ZEZ-Fs can already be seen in the supermarket sector. In August 2022, Tesco became the first retailer in the 麻豆传媒 to launch a zero-emission electric lorry making deliveries from its distribution centre to more than 400 stores across London, while Waitrose has announced plans to have over 3,000 electric vans, light trucks and cars on the road by 2030 and Sainsbury鈥檚 plans to operate electric vehicles in all stores across the 麻豆传媒 by 2035. 18
How the freight industry is adapting to electrification
In some areas of the fleet sector, change is happening at pace 鈥� particularly in Europe. In Belgium, for instance, DHL Express collaborated with Shell and Ford in 2023 to add 100 new electric vans to its fleet.19
And DHL is not alone. As Jae Ryu from Shell observes: 鈥淟egislation undoubtedly provides the nudge. But what is positive is that many companies are opting to electrify ahead of legislative mandates.鈥� In the US, sector leaders like Amazon, Fedex and Penske are phasing in electric fleets. This drive to lead the way, even ahead of tighter legislation, can be motivated by multiple factors from a desire to accelerate decarbonisation progress, to a need to meet customer demand for more sustainable services. By going it alone for now, these companies are taking a bold step and will be hoping that the widespread charging infrastructure needed to deliver mass EV adoption across the US won鈥檛 be far behind.
Mixed fleets that operate multiple vehicle types are also making the leap. G4S, which has a fleet of 15,000 vehicles from security vans to ambulances operating globally, is a leading example. 20 It has signed up to Shell鈥檚 Accelerate to Zero programme to drive its ambition of achieving net-zero emissions. Working closely with Shell, G4S is installing eDepot charging solutions across its sites to maximise the uptime of its extensive EV fleet, with a vision for all its vehicles to be powered by electric or other zero-carbon alternative fuels by 2040. 21
Even heavy-duty vehicles are gradually starting to make the transition. According to figures published by the European Automobile Manufacturers鈥� Association (ACEA) a significant increase in registrations of heavy electric vehicles was observed in 2023, with eTrucks now representing 1.5% of the market, a notable increase on 2022鈥檚 0.8% figure. 22 In Germany, 20,000 electric trucks were registered in 2023, accounting for 7.5% market share, while in The Netherlands, the number of registered electric heavy commercial vehicles multiplied by 10 in 2023 with 1,148 units, and in France registrations of electric trucks tripled with 508 units sold. 23
The challenges and opportunities ahead
When it comes to electrification, the road ahead looks positive, but it won鈥檛 be without challenges. While cars, public transport and last-mile delivery vans can be supported by current vehicle options and charging infrastructure, the challenges are significantly greater for heavy-duty road transport fleets.
For many, charging infrastructure is still too disparate to accommodate long, transcontinental routes. However, advances in vehicle technology and charging infrastructure coverage in both the US and Europe could significantly change that picture over the coming years. With collaboration across the industry, and with energy suppliers, this shift can make sure EVs continue to become a more mainstream option across all sectors.
Despite the positive shift, market maturity itself comes with challenges. As more people and companies are electrifying their transport, grid congestion is becoming an issue for many. Fluctuations in the cost of electricity is another challenge 鈥� adding further complexity to the decision making required of fleet managers.
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Arjan Keizer from Shell explains: 鈥淚n the early days, we saw companies focusing on low-hanging fruit like EV car incentive schemes for employees on an optional basis. But now they are aiming for nearly 100% of their new vehicles to be electric or have moved to service vans that drive long daily distances. As a result, many customers are struggling with the complexity of the decision making involved.
鈥淓specially for operational fleets, the proliferation of vehicle, charging and technology choices can be complex and there鈥檚 an increasing need for in-depth technical knowledge on everything from grid connections to data management. And scaling is an issue. The challenges involved in electrifying 10% of the fleet or 50% are very different in terms of the setup and scale of charging hubs.
鈥淭he upshot is that there鈥檚 a growing awareness of the need to work together with experts who can support informed decision making. We鈥檝e seen a huge surge in the number of sector leaders from across North America and Europe collaborating with us on our Accelerate to Zero programme to help them introduce bespoke, decarbonisation pathways.鈥�
The three 鈥楥鈥檚 critical to mass EV adoption
Looking ahead, Jae Ryu from Shell believes communication, collaboration and competition will all be key to sustaining the positive progress made to date: 鈥淲hen technology is changing so rapidly, it鈥檚 essential that the many different suppliers, partners and customers in the market are communicating openly and constantly. Although we鈥檙e all working to common Open Charge Point Protocols (OCPPs), these are open to interpretation, and it only takes one leg to do something differently to knock the balance off the stool.鈥�
The past five years have seen the EV landscape evolve beyond recognition across the world. And what that rapid progress has shown us is that whilst the challenges involved in the electrification of transport are still significant, the appetite to embrace its potential is perhaps even greater. The years ahead look set to deliver exciting change because, if all those involved in the EV ecosystem can continue to demonstrate the same creativity and commitment that has propelled the huge progress made to date, progress towards a net-zero future for road transport should be well within our collective grasp.
You can find out more about Shell鈥檚 eMobility solutions here and discover more about Shell鈥檚 Accelerate to Zero programme here.
Jae Ryu鈥淪o, positive communication and collaboration are fundamental. But we must also ensure that we create the space and conditions for healthy competition to thrive as that is what will stimulate the constant innovation pivotal to the landscape鈥檚 future success.鈥�
References
1 Bloomberg 麻豆传媒 (March 2024)
2 United Nations (Oct 2021)
3 IEA (2024)
4 Our Word in Data (April 2024)
5 Bloomberg 麻豆传媒 (March 2024)
6 Shell 鈥淪hell EV Driver Research 2024鈥� (July 2024)
7 Bloomberg 麻豆传媒 (March 2024)
8-10 Global Fleet (November 2023)
11&12 Fleet Europe (January 2024)
13 Chargepoint (2024)
14 The ICT (August 2021)
15&16 Rabobank (February 2024)
17 The ICT (August 2021)
18 Grocery Gazette (May 2023)
19 YouTube 鈥溾�� (2023)
20 G4S (July 2023)
21 Mobility Portal Europe (Feb 2024)
22 Business Insider (Feb 2023)
