A newly-published report from the environmental consultancy Transport and Environment (T&E) has found that in 2018 the US overtook the EU to become the world's second largest electric car market with around 361,000 EVs sold in that year compared to 302,000 in the European Union.

China remains by far the world's largest market for electric vehicles. Over 1 million were sold in the country during 2018, 150,000 of which were in December alone.

The T&E report, entitled "Trump's US overtakes EU in electric car race", gives a country by country breakdown and reveals a stark divide between the east and west of the European Union. Sweden was the leading market in EVs reaching 8% of total vehicle sales, followed by the Netherlands, Finland, Portugal, Austria and the UK.

× Expand EV charging Electric vehicle charging station Ladestasjon for elbil Nissan VW e-golf at Storgaten Tønsberg in Norway

The largest market in the eastern part of the EU was in Hungary, the only country in the region where electric vehicle sales reached over 1% of the total vehicle sales. Poland showed the lowest proportion of EV sales with Slovakia, Greece, Estonia, Czech Republic, Lithuania and Romania also reaching minimal sales.

T&E cites the main reasons for the slow growth in EU EV sales as being that "EU carmakers have been holding back EV sales to ‘save’ zero-emission cars right until the end to comply with stricter CO2 limits in 2020 and 2021.”

× Expand EV sales 2018 Share of EV sales and EV sales growth in 2018 (Source: ACEA)

"EU carmakers have seen electric cars as a necessary evil to comply with regulation and evidence shows they've been suppressing supply and sales in 2018, in an attempt to protect their diesel business,” said Lucien Mathieu, e-mobility analyst with T&E.

“Meanwhile China is racing ahead and even Trump’s America has now overtaken Europe thanks to the Tesla-fueled EV sales boom."

T&E says that instead of boosting EV production and making the necessary adjustments to the supply chain, OEM (Original Equipment Manufacturers) in Europe are “shoring up the slumping EU diesel market” and shown a hesitance to fully embrace the electric vehicle revolution. Instead, “Diesel engines have been the cornerstone of their expertise and allowed them to have a competitive edge vis-à-vis US and Asian manufacturers.” The change in the EU emissions test cycle has also been linked to the delay in the release of new EVs.

“The suppression of EV sales is apparent in carmakers’ limited model choice and availability. Market monitoring shows that seven all-electric model launches were recently delayed in Europe. This has led to waiting times of between six and 12 months for most plug-in cars,” the report says. “Carmakers also launched fewer new battery electric and fuel cell (ZEV) models in 2018 than 2017. Just seven were added last year, whereas 20 new models will be added in 2019, 33 in 2020 and 45 in 2021.”

T&E also points to other factors such as Tesla's much reported production problems, as well as delays to the Audi E-tron, which delayed its first deliveries to March 2019. It has also been announced by the Daimler CEO Dieter Zetsche that the Mercedes EQC will not meet demand by 2019 and probably not 2020 and there have also been delays to the rollout of the Honda Urban EV, Jaguar I-Pace and the Kia e-Niro.

Regulation is at the heart of EV sales in all major markets says T&E: “The main driver of EV sales has been clean car policies in the world's three largest car markets.”

“EU carmakers currency don’t need to sell EVs, so they don’t make an effort,” the report states. “On the other hand … model availability will change radically from 2019-2020 onwards. This is because EU carmakers need to sell an estimated 5-7% plug-in models to meet the 2021 CO2 standard.”

CO2 targets in Europe will require over one third of car sales to be electric by 2030 and all new car sales to go zero emission by the early 2030s.

The report has however found several positives in the European market, finding that there is good potential for sustainable long-term growth. BEVs (Battery Electric Vehicles) showed strong sales in 2018 and there are several BEV launches in the pipeline. Also EV sales in the EU are much more diverse, unlike in the US which is dependent on Tesla alone.

“While Europe might have lost the 2018 battle, the race is still on,” the report says, and there has been significant investment that looks to come to fruition in the next few years.

For example, the Polish government's target of having 1 million EVs on the road by 2025 was given a boost with the announcement that the country's energy firms are to join forces for a project that aims to create the first homegrown electric vehicle.

Last month the Chinese EV manufacturer BYD Auto announced their plans to expand their presence in Europe with the launch of three zero-emission commercial vehicles.

Last year, Audi launched production of electric engines at its plant in Gyor, Hungary.