European vehicle trends: The road ahead in 2025

The landscape of European roads is undergoing a significant transformation. With nearly 249 million passenger cars in circulation across the European Union (EU) by 2023, a 1.4% increase from the previous year, vehicle ownership continues to grow. The latest Vehicles on European Roads 2025 report by the European Automobile Manufacturers’ Association (ACEA) provides crucial insights into the trends shaping the automotive sector, from vehicle ageing to the slow but steady adoption of zero-emission vehicles.

A growing fleet with an ageing profile

The EU’s vehicle fleet is expanding, but it is also ageing. The average age of passenger cars in the EU is now 12.5 years, with Greece having the oldest fleet (17.5 years) and Luxembourg the newest (eight years). A similar trend is observed in light commercial vehicles (LCVs), where the average age is 12.7 years. Trucks and buses, integral to the transport sector, also show an ageing pattern, with average ages of 14.1 and 12.2 years, respectively.

This ageing fleet presents challenges for policymakers aiming to reduce emissions and improve road safety. Older vehicles generally have higher emissions and lack the advanced safety features present in newer models. Addressing this issue requires incentives to accelerate fleet renewal, encouraging consumers and businesses to invest in modern, cleaner vehicles. Additionally, scrappage schemes and tax incentives for cleaner vehicles can help accelerate the shift towards a more sustainable fleet.

Electrification: Progress, but challenges remain

While sales of battery-electric vehicles (BEVs) have grown, their representation on European roads remains modest. In 2023, BEVs accounted for only 1.8% of the total passenger car fleet, despite comprising 13.6% of new car registrations. Electrification efforts in the commercial sector are even slower, with just 1.1% of light commercial vehicles and 0.1% of trucks being battery-electric.

Buses lead the way in the transition to zero-emission mobility, with 2.5% of the EU fleet now battery-electric. Countries such as the Netherlands (17.7%), Luxembourg (14.7%), and Ireland (13.5%) have made significant progress in integrating electric buses into their public transport networks. However, widespread electrification remains hindered by the lack of charging infrastructure, high vehicle costs, and slow turnover of vehicle fleets.

A key challenge in accelerating electrification is the development of a robust charging network. While Europe has made strides in expanding public charging points, disparities remain between countries. Urban areas are generally well-equipped, but rural regions still lack adequate infrastructure. The deployment of ultra-fast charging stations along highways will be crucial in increasing consumer confidence in electric vehicles.

Fuel trends: Diesel still dominates

Despite electrification efforts, diesel remains the dominant fuel type for European vehicles. In 2023, diesel-powered vehicles constituted 90.5% of the LCV fleet, 96.4% of trucks, and 89.2% of buses. Even among passenger cars, diesel remains a significant player, though its market share has been declining.

Petrol-powered cars still make up a substantial portion of the EU fleet, while alternative fuels such as natural gas and liquefied petroleum gas (LPG) remain niche. Hybrid vehicles are growing in popularity, but their adoption varies significantly by country. For instance, hybrid electric vehicles account for 6.1% of passenger cars in the Netherlands but remain below 3% in many other markets.

The decarbonisation of the transport sector requires a multi-pronged approach, believes ACEA. While electric vehicles are essential for achieving long-term sustainability goals, there is also potential for renewable fuels such as biofuels and hydrogen to play a larger role in reducing emissions, particularly in the commercial transport sector.

Vehicle density and ownership trends

Vehicle density varies widely across Europe, with Italy having the highest car ownership rate at 694 cars per 1,000 people. In contrast, Latvia has the lowest at 381 cars per 1,000 people. Car dependency remains strong, with a large proportion of European households owning at least one car. In Denmark, nearly 40% of households do not own a car, while in France, 31% of households own two or more vehicles.

On average, European cars travel 12,346 kilometres per year. However, usage patterns vary by country, influenced by factors such as fuel prices, public transport availability, and urban planning. In countries with strong public transport networks, car usage tends to be lower, while in rural and suburban areas, private car ownership remains essential for mobility.

Future policy and infrastructure needs

The findings of the ACEA report highlight the need for a comprehensive strategy to accelerate the transition to greener and safer mobility. While regulatory targets can drive change, they must be accompanied by robust support measures such as financial incentives for electric vehicle adoption, expansion of charging infrastructure, and policies to encourage fleet renewal.

A long-term vision for sustainable mobility must also consider multimodal transport solutions, integrating public transport, cycling, and shared mobility services. Investments in smart city infrastructure and connected mobility technologies can further enhance efficiency and reduce congestion in urban areas, according to the ACEA report.

Decarbonisation of the transport sector will require collaborative efforts between governments, automakers, and infrastructure providers. As Europe moves towards a more sustainable transport system, addressing affordability, convenience, and efficiency will be critical in ensuring a smooth transition to the mobility of the future.

New technologies shaping the future

Advancements in digitalisation and automation are set to revolutionise European transport. The integration of artificial intelligence (AI) into traffic management systems, autonomous vehicles, and smart mobility solutions is expected to enhance efficiency and safety on European roads. Many cities are exploring AI-driven solutions to optimise traffic flow, reduce congestion, and lower emissions.

Autonomous vehicle technology, although still in its early stages, is gaining traction. Companies such as Tesla, Waymo, and traditional automakers are making significant progress in autonomous driving systems. However, widespread adoption will depend on regulatory frameworks, public acceptance, and further technological refinements.

Meanwhile, shared mobility solutions, including ride-hailing, car-sharing, and micro-mobility services, are expanding. These services provide an alternative to private car ownership, particularly in urban areas, reducing traffic congestion and emissions. Governments and city planners are increasingly integrating shared mobility into public transport systems to create seamless, multimodal networks.

Conclusion

The evolution of mobility in Europe is at a critical juncture. While electrification and digitalisation offer promising pathways to a more sustainable future, challenges remain in infrastructure development, policy implementation, and consumer adoption. A coordinated approach involving governments, industry stakeholders, and consumers will be essential in navigating these transformations.

By embracing innovation, investing in green technologies, and fostering collaboration across sectors, ACEA believes that Europe can lead the way in shaping a modern, sustainable transport ecosystem that balances environmental responsibility with economic growth and mobility needs.