As EV prices fall and emissions targets are met, the EU and Norway's BEV market share will reach 23% in 2026 and 28% in 2027, which will support the market.
European campaign groups say Europe's transition to electric vehicles is the right path and can be profitable for carmakers. In December, they urged the European Commission to reverse plans to effectively ban the sale of new internal combustion engine cars from 2035.
The average price of pure electric cars will fall by 4% in 2025, thanks to the launch of new models priced below 25,000 euros, the transport and environment group said.
If the EU maintains or strengthens its CO2 emissions targets, these models could become as expensive as internal combustion engine cars by 2030, the report said. Large models have achieved price parity.
The market is expected to reach an important tipping point in the next few years, Lucien Mathieu, head of the automotive division of the Transport and Environment Organization, told reporters.
"Abandoning the 2030 target as the industry wishes would be a huge threat," he said.
The Transport and Environment group noted that if the 2030 target is weakened, carmakers are likely to prioritize their profit margins and delay price parity for at least another two years.
Strantis and other global automakers have taken $55 billion in writedowns over the past few months as they lowered their electric vehicle targets.
To avoid fines, Tesla and Polestar have agreed to share their carbon dioxide emissions with other EV leaders to reduce their respective total emissions.
The Transport and Environment group reported that carmakers accounting for about half of the European market had already met their 2025-2027 CO2 targets by 2025, including the BMW Group, the Mercedes-Volvo Cars pool and, last year, the Tesla pool that included Strantis and Toyota.
The report said industry warnings that it could face €15 billion in fines in 2025 were "very distant" and estimated that fines could be as high as €2 billion if annual targets are met.