Demand for electric vehicles may ramp up overseas as the European Union prepares to push companies away from gas-powered cars.
According to Reuters, the EU plans to end tax breaks for petrol- or diesel-powered company vehicles in an effort to promote EVs. The move is part of the European Union's Industrial Action Plan, which aims to ensure the EU remains competitive with the United States and China by producing more EVs. EU officials and vehicle manufacturers have been in discussions for the last month.
The outline for the Industrial Action Plan said that "eliminating distorting subsidies for fossil fuelled vehicles is instrumental" to increasing EV numbers in corporate fleets. Those fleets are responsible for about 60% of new car registrations in the EU.
The European Automobile Manufacturers' Association said the market share of EVs in Europe rose to 15% in January, up from 13.6% in 2024. The European Commission, the main executive body of the EU, will propose legislation with measures to support demand for EVs by the end of the year.
Electric and hybrid vehicle sales are increasing worldwide. Reuters said global sales spiked by 25% last year. Drivers in the U.S. also had a healthy interest in planet-friendly cars in 2024, with 1.3 million EVs sold.
According to the U.S. Environmental Protection Agency, a gas-powered vehicle typically emits around 4.6 metric tons of carbon dioxide a year. Carbon dioxide and other polluting gases trap heat in the atmosphere, which can negatively impact the environment and public health.
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While EVs may create carbon pollution through the electricity used to charge them, they have a smaller carbon footprint than gas-powered cars. EVs produce zero tailpipe emissions and allow drivers to avoid high gas prices.
EV drivers in the U.S. can take advantage of Inflation Reduction Act tax breaks and credits. Investing in EVs, solar panels, and heat pumps could lead to tax benefits that exceed $20,000.
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