Europe’s EV Policy: Idealism Wavers in Face of Reality

Editorial

16:16 JST, January 19, 2026

The European Union, which is highly environmentally conscious, has been forced to make adjustments to its electric vehicle strategy. It can be said that the reality of the situation is hindering the spread of EVs.

Last month, the EU effectively withdrew its plan to ban, in principle, the sale of combustion-engine vehicles, which was supposed to be introduced in 2035. It was forced to make a policy shift after criticism mounted from automakers that the ban was too radical.

The EU’s policies are characterized by the “Brussels Effect,” a phenomenon in which the bloc introduces strict regulations first, expands them into international standards and eventually enhances its industrial competitiveness. The EU promoted its EV policy through measures such as a comprehensive environmental initiative called the European Green Deal, which was announced in 2019.

Among these measures, the ban on combustion-engine vehicles unveiled in 2021 was a key strategy aimed at revitalizing the automobile industry, a core sector for the EU.

However, the EU’s miscalculation was that EVs have not spread at the speed expected as there are challenges yet to be overcome, such as high prices, lack of charging infrastructure and short driving range. EVs account for only 16% of new car sales in the European market.

It is important to set high ideals when pursuing policies to promote decarbonization. However, unless regulations are realistic and acceptable to consumers, policies will reach an impasse.

European automakers such as Germany’s Volkswagen, which made massive investments in EVs ahead of its rivals, have seen their investment and development strategies go awry and are now facing difficulties. This situation has also cast significant doubt on the reliability of EU policies.

What was even more unexpected was that Chinese automakers, which boast overwhelming cost competitiveness, have swept the global market.

The EU’s return to realism from idealism is likely to offer a grave lesson for Japan’s EV strategy as well.

Japanese automakers including Toyota Motor Corp. have notably lagged behind in the EV race, but have strengths in other environmentally friendly vehicles such as hybrids that combine combustion engines and electric motors.

When the government considers regulations and promotion measures, and companies look into investment strategies, it is necessary to continue meticulously analyzing the outlook for the EV market.

Japanese automakers have not changed their view that a transition toward EVs will be a major trend in the medium to long term.

In China, EVs and other new energy vehicles already account for more than 50% of new car sales. In 2025, Chinese automaker BYD surpassed its U.S. rival Tesla in EV sales, becoming the global leader for the first time. If Japan neglects technological development, it will only allow China to run on unchallenged.

EVs require massive investments in developing autonomous driving software and storage batteries. It is hoped that Japanese automakers will enhance the competitiveness of their products by forming alliances with other companies and refining their investment strategies.

(From The Yomiuri Shimbun, Jan. 19, 2026)