Europe Needs to Prioritize Small Compact EVs, Experts Say

Europe’s small car industry, once known for its creativity and affordability, has slowly lost its spark. For years, cars like the Fiat Panda, Renault Clio, and Seat Ibiza were a common sight on European roads. These cars were not just cheap to buy but also practical and well-loved by drivers. 

However, the rise of large, expensive SUVs and the slow growth of small electric cars have changed the market. Today, experts say it is time for Europe to bring back the focus on small, affordable electric vehicles (EVs) to secure the future of its car industry. 

In 2010, small cars made up around 10 percent of all car sales in Europe. By the first half of 2025, that number had fallen to just 3.8 percent. Automakers have shifted their attention to bigger and more profitable vehicles, leaving behind the smaller models that once defined European roads. 

Even in the early stages of electric vehicle production, companies focused on luxury EVs, which are too costly for most buyers. Only about one in four new EVs sold today is a small model, compared to 40 percent of all car sales. 

This trend has opened the door for Chinese manufacturers like BYD, who are now filling the gap in the affordable EV market. At the same time, European car sales remain lower than before the pandemic. To fix this, European Commission President Ursula von der Leyen announced a “small affordable car initiative” that aims to make electric mobility cheaper and more competitive. 

Experts believe the demand for small electric cars is strong, but there are not enough affordable options available. Many European consumers say they are willing to pay up to €20,000 ($23,118) for an electric car, but few models fit that price range. New small EVs like the VW ID Polo and Renault Twingo could change this, especially if they are produced in large numbers to reduce costs. 

According to a study for the European Commission, increasing the production of small electric cars could add 1.5 million vehicles to annual sales and create about 120,000 new jobs. To make this possible, the EU could use revenues from its emissions trading system to fund an “Affordable EV Platform.” Governments could also make small EVs cheaper through tax cuts, subsidies, and social leasing programs. 

However, experts warn that safety and climate standards should not be sacrificed in the process. Some manufacturers have suggested freezing safety rules for small cars, which would make them less safe than larger models. Others are pushing for credits that could weaken emission goals. 

If Europe wants to lead in clean transport, it must support small, mass-market EVs without compromising safety or quality. By doing so, Europe could restore the energy, innovation, and “va-va-voom” that once made its car industry the pride of the world. 

Given that motorists in different markets, including the U.S., regard EVs as too expensive, manufacturers could increase their sales by giving smaller and more compact EVs priority. Brands like Bollinger Innovations, Inc. (OTC: BINI) could weigh this option in relation to the segments they currently serve and see whether it is something worth exploring. 

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