Europe’s Auto Forecast 2026: Technology, policy and EV adoption
01 April 2026
How have new uncertainties changed Europe’s automotive forecast? What is driving divergence in electric vehicle (EV) adoption between markets? Which new technologies and models could shake up current assumptions? A new JD Power webinar answers these questions.
Over the past year, one trend has become increasingly apparent in Europe. The continent’s automotive industry is not converging toward a single EV future. Instead, localised pathways are becoming distinct and diverse.
So, what does this mean in practical terms when planning for 2026? Have recent uncertainties downgraded outlooks? What factors are limiting markets with low EV adoption? How have stable policies enabled high plug-in uptake? Plus, could new technological developments reshape competitive dynamics?
These questions were answered in the live webinar: Europe’s Auto Forecast 2026: Technology, policy and EV adoption. During this session, Autovista24 journalist Tom Hooker spoke with a panel of JD Power experts.
This included Dr Christof Engelskirchen, chief economist and director of professional services. Marco Pasquetti, cluster head of valuations for Spain and Italy, shared his insights as well. The panel also featured Idesbald Vannieuwenhuyze, cluster head of valuations for Belgium and the Netherlands, and Neil King, head of forecasting at EV Volumes.
Forecast impacted by key developments
Engelskirchen began the webinar by assessing the latest developments affecting Europe’s automotive industry.
This included an assessment of the IMF World Economic Outlook January 2026 and the OECD Interim Outlook March 2026. Comparing these two reports, many regions saw a decline in gross domestic product (GDP) growth forecasts. This included the EU, the US and China.
Meanwhile, EU zero-emission regulations could be softened after the European Commission presented the automotive package in December 2025.
Key proposed revisions include a 90% reduction in vehicle CO2 tailpipe emissions compared with 2021 figures. A defined small EV category and a reduced 2030 CO2 emissions target for light-commercial vehicles (LCVs) are also being considered.
Europe’s 2026 new-car forecast
Taking all this into account, EV Volumes’ European light-vehicle sales outlook, combining new cars and light-commercial vehicles (LCVs), was downgraded.
The March 2026 update represented a loss of around 160,000 units compared to December 2025. A growth of 0.1% is now projected for 2026, down from a 1.7% improvement forecasted in the previous update.
European new-car market sales are expected to increase by 0.2% this year. Meanwhile, new LCV volumes are forecast to fall by 0.5%. This was down from the 3.4% growth predicted in December 2025.
The automotive package, if implemented, will also likely change Europe’s powertrain mix. King projected that the removal of the de facto internal-combustion engine (ICE) ban in 2035 would mean more hybrid development. This would also enable plug-in hybrids (PHEVs) and extended-range electric vehicles from China to take more market share in Europe.
King then commented that the UK’s zero-emission vehicle (ZEV) mandate targets are becoming increasingly unachievable. While the policy is unchanged, it faces mounting industry pressure. He suggested that the UK ZEV mandate may eventually follow the EU’s proposed measures.
Factors limiting EV adoption
The panel then explored Europe’s uneven EV adoption rates. In Norway, Sweden, Finland and the Netherlands, battery-electric vehicles (BEVs) and PHEVs dominate the new-car market. The technologies accounted for over 50% of registrations in these countries between January and February 2026, according to ACEA.
Conversely, Pasquetti outlined that EVs made up under 30% of deliveries in Spain, Italy and Poland. In some of these countries with lower adoption rates, key structural factors create friction for the EV transition.
This includes a weak public charging infrastructure compared to the number of cars and reduced access to home charging. Pasquetti also highlighted that below-average purchasing power can significantly limit EV uptake.
Factors driving EV adoption
Vannieuwenhuyze showed how hidden drivers for EV uptake can be identified in markets with higher adoption levels. For example, a country’s culture and history can influence a transactional mindset among buyers. This means total cost of ownership (TCO) is prioritised, causing EV uptake to rise when running costs undercut ICE models.
A higher exposure to environmental change can also translate into stronger public and political support for EVs. Furthermore, a stable natural resource base reduces exposure to energy price volatility, enabling more predictable EV adoption.
Vannieuwenhuyze also noted that stable, predictable and long-term policy is key in the EV transition. Specifically, five stages of market maturity can be identified. This ranges from early incentives when uptake is low, to reducing subsidies and advantages after reaching mass-market adoption.
Pasquetti explained how the type of EV incentive can have varying effects. Purchase incentives can generate strong short-term share spikes. However, they typically have little lasting impact. Conversely, taxation incentives can deliver a more durable, longer-term effect.
Will new technologies rewrite forecasts?
Alongside policies and country-specific differences, new technological developments and brands could reshape forecasts in Europe. This includes an influx of small EVs.
Pasquetti projected that these models may benefit markets that favour smaller segments and have lower purchasing power, such as Italy. A growing availability of small EVs in these countries is expected to support broader EV adoption, including larger model segments.
Elsewhere, Chinese brands are gaining market share in Europe. Engelskirchen showed how these carmakers have increased their hold in BEV and PHEV markets. In particular, they have been successful in countries such as Spain, Italy, Poland, and the UK.
Finally, Pasquetti identified five key technologies that have the potential to influence future EV adoption. This included 800-volt platforms and vehicle-to-grid (V2G) charging.
Enjoyed Europe’s Auto Forecast 2026: Technology, Policy, and EV Adoption? Then register for Autovista Group’s next webinar, Decoding the TCO Landscape: Fuel Volatility, Incentives, and Market Reality. It will take place on 28 May 2026 at 09:30 BST / 10:30 CEST, so sign up now.
