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Europe EV Sales Slowdown signals waning incentives, economic uncertainty, and supply chain constraints, threatening climate targets and net-zero emissions goals while highlighting the need for charging infrastructure, affordable batteries, and policy support across key markets.

Key Points

Europe's early-2024 EV registrations fell as incentives waned and supply gaps persisted, putting climate targets at risk.

✅ Fewer subsidies and tax breaks cut EV affordability

✅ Inflation and recession fears dampen car purchases

✅ Supply-chain and lithium constraints limit availability

A recent slowdown in Europe's electric vehicle (EV) sales raises serious concerns about the region's ability to achieve its ambitious climate targets.  After years of steady growth, new EV registrations declined in key markets like Norway, Germany, and the U.K. in early 2024. Experts are warning that this slump jeopardizes the transition away from fossil fuels and could undermine Europe's commitment to a net-zero emissions future.

Factors Behind the Decline

Several factors are contributing to the slowdown in EV sales:

• Reduced Incentives: Many European countries have scaled back generous subsidies and tax breaks for EV purchases. While these incentives played a crucial role in driving early adoption, their reduction has made EVs less financially attractive for some consumers, with many U.K. buyers citing higher prices even after discounts.
• End of ICE Ban Support: Public support for phasing out gasoline and diesel-powered cars by 2035, a key European Union policy, appears to be waning in some areas. Without robust support for this measure, consumers may be less inclined to embrace the transition to electric vehicles.
• Economic Uncertainty: Rising inflation and fears of a recession in Europe have made consumers hesitant to invest in big-ticket purchases like new cars, regardless of fuel type. This economic uncertainty is impacting both electric and conventional vehicle sales.
• Supply Chain Constraints: Ongoing supply chain disruptions and shortages of raw materials like lithium continue to impact the availability of affordable electric vehicles. This means potential buyers face long wait times or inflated prices even when they're ready to embrace EVs.

Consequences for Europe's Green Agenda

The decline in EV sales threatens Europe's plans to reduce carbon emissions and become the first climate-neutral continent by 2050, aligning with a broader push for electricity to address the climate dilemma across Europe. The transportation sector is a major contributor to greenhouse gas emissions, and the rapid electrification of vehicles is a pillar of Europe's decarbonization strategy.

The current slump highlights the need for continued policy support for the EV market, as EVs still trail gas models in many markets today, to ensure long-term growth and affordability for consumers. Without action, experts fear that Europe may find itself locked into a dependence on fossil fuels for decades to come, making its climate targets unreachable.

A Global Concern

Europe is a leader in electric vehicle policies and technology, during a period when global EV sales climbed markedly. The recent slowdown, however, sends a worrying signal to other regions around the world aiming to accelerate their transition to electric vehicles, including the U.S. market's Q1 dip as a cautionary example. It underscores the importance of sustained government support, investment in charging infrastructure and overcoming supply chain challenges to secure a future of widespread electric vehicle use, with many forecasts suggesting mass adoption within a decade if support continues.

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Britain Electricity Demand During Lockdown is around 10 percent lower, as industrial consumers scale back. National Grid reports later morning peaks and continues balancing system frequency and voltage to maintain grid stability.

Key Points

Measured drop in UK power use, later morning peaks, and grid actions to keep frequency and voltage within safe limits.

✅ Daily demand about 10 percent lower since lockdown.

✅ Morning peak down nearly 18 percent and occurs later.

✅ National Grid balances frequency and voltage using flexible resources.

Daily electricity demand in Britain is around 10% lower than before the country went into lockdown last week due to the coronavirus outbreak, data from grid operator National Grid showed on Tuesday.

The fall is largely due to big industrial consumers using less power across sectors, the operator said.

Last week, Prime Minister Boris Johnson ordered Britons to stay at home to halt the spread of the virus, imposing curbs on everyday life without precedent in peacetime.

Morning peak demand has fallen by nearly 18% compared to before the lockdown was introduced and the normal morning peak is later than usual because the times people are getting up are later and more spread out with fewer travelling to work and school, a pattern also seen in Ottawa during closures, National Grid said.

Even though less power is needed overall, the operator still has to manage lower demand for electricity, as well as peaks, amid occasional short supply warnings from National Grid, and keep the frequency and voltage of the system at safe levels.

Last August, a blackout cut power to one million customers and caused transport chaos as almost simultaneous loss of output from two generators caused by a lightning strike caused the frequency of the system to drop below normal levels, highlighting concerns after the emergency energy plan stalled.

National Grid said it can use a number of tools to manage the frequency, such as working with flexible generators to reduce output or draw on storage providers to increase demand, and market conditions mean peak power prices have spiked at times.

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Ukraine Energy Grid Attacks intensify as missile strikes and drone raids hit power plants, substations, and transmission lines, causing blackouts, disrupted logistics, and humanitarian strain during winter, despite repairs, air defense, and allied aid.

Key Points

Missile and drone strikes on Ukraine's power grid to force blackouts, strain civilians, and disrupt military logistics.

✅ Targets: power plants, substations, transmission lines

✅ Impacts: blackouts, heating loss, hospital strain

✅ Goals: erode morale, disrupt logistics, force aid burdens

Russia’s continued strikes on Ukraine have taken a severe toll on the country’s critical infrastructure, particularly its energy grid, as Ukraine continues to keep the lights on despite sustained bombardment. In recent months, Western Ukraine has increasingly become a target of missile and drone attacks, leading to widespread power outages and compounding the challenges faced by the civilian population. These strikes aim to cripple Ukraine's resilience during a harsh winter season and disrupt its wartime operations.

Targeting Energy Infrastructure

Russian missile and drone assaults on Ukraine’s energy grid are part of a broader strategy to weaken the country’s morale and capacity to sustain the war effort. The attacks have primarily focused on power plants, transmission lines, and substations. Western Ukraine, previously considered a relative safe haven due to its distance from front-line combat zones, is now experiencing the brunt of this campaign.

The consequences of these strikes are severe. Rolling blackouts and unplanned outages have disrupted daily life for millions of Ukrainians, though authorities say there are electricity reserves that could stabilize supply if no new strikes occur, leaving homes without heating during freezing temperatures, hospitals operating on emergency power, and businesses struggling to maintain operations. The infrastructure damage has also affected water supplies and public transportation, further straining civilian life.

Aimed at Civilian and Military Impact

Russia’s targeting of Ukraine’s power grid has dual purposes. On one hand, it aims to undermine civilian morale by creating hardships during the cold winter months, even as Ukraine works to keep the lights on this winter through contingency measures. On the other, it seeks to hinder Ukraine’s military logistics and operations, which heavily rely on a stable energy supply for transportation, communications, and manufacturing of military equipment.

These attacks coincide with a broader strategy of attritional warfare, where Moscow hopes to exhaust Ukraine’s resources and diminish its ability to continue its counteroffensive operations. By disrupting critical infrastructure, Russia increases pressure on Ukraine's allies to step up humanitarian and military aid, stretching their capacities.

Humanitarian Consequences

The impact of these power cuts on the civilian population is profound. Millions of Ukrainians are enduring freezing temperatures without consistent access to electricity or heating. Vulnerable populations, such as the elderly, children, and those with disabilities, face heightened risks of hypothermia and other health issues.

Hospitals and healthcare facilities are under immense strain, relying on backup generators that cannot sustain prolonged use. In rural areas, where infrastructure is already weaker, the effects are even more pronounced, leaving many communities isolated and unable to access essential services.

Humanitarian organizations have ramped up efforts to provide aid, including distributing generators, warm clothing, and food supplies, while many households pursue new energy solutions to weather blackouts. However, the scale of the crisis often outpaces the resources available, leaving many Ukrainians to rely on their resilience and community networks.

Ukraine's Response

Despite the challenges, Ukraine has demonstrated remarkable resilience in the face of these attacks. The government and utility companies are working around the clock to repair damaged infrastructure and restore power to affected areas. Mobile repair teams and international assistance have played crucial roles in mitigating the impact of these strikes.

Ukraine’s Western allies have also stepped in to provide support. The European Union, the United States, and other countries have supplied Ukraine with energy equipment, financial aid, and technical expertise to help rebuild its energy grid, though recent decisions like the U.S. ending support for grid restoration complicate planning and procurement. Additionally, advanced air defense systems provided by Western nations have helped intercept some of the incoming missiles and drones, though not all attacks can be thwarted.

Russia’s Escalation Strategy

Russia’s focus on Western Ukraine reflects a shift in its strategy. Previously, attacks were concentrated on front-line areas and major urban centers in the east and south. However, by targeting the western regions, Moscow seeks to disrupt the relatively stable zones where displaced Ukrainians and critical supply chains are located.

Western Ukraine is also a hub for receiving and distributing international aid and military supplies. Striking this region not only undermines Ukraine’s internal stability but also sends a message to its allies about Russia’s willingness to escalate the conflict further.

Broader Implications

The attacks on Ukraine’s energy grid have broader geopolitical implications. By targeting infrastructure, Russia intensifies the pressure on Ukraine’s allies to continue providing support, even as Kyiv has at times helped Spain amid blackouts when capacity allowed, testing their unity and resolve. The destruction also poses long-term challenges for Ukraine’s post-war recovery, as rebuilding a modern and resilient energy system will require significant investments and time.

Moreover, these attacks highlight the vulnerability of civilian infrastructure in modern warfare, echoing that electricity is civilization amid winter conditions. The deliberate targeting of non-combatant assets underscores the need for international efforts to strengthen the protection of critical infrastructure and address the humanitarian consequences of such tactics.

The Russian attacks on Western Ukraine's power grid are a stark reminder of the devastating human and economic costs of the ongoing conflict. While Ukraine continues to demonstrate resilience and adaptability, the scale of destruction underscores the need for sustained international support. As the war drags on, the focus must remain on mitigating civilian suffering, rebuilding critical infrastructure, and pursuing a resolution that ends the violence and stabilizes the region.

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Canada Clean Electricity Expansion is urged by the IEA to meet net-zero targets, scaling non-emitting generation, electrification, EV demand, and grid integration across provinces to decarbonize industry, buildings, and transport while ensuring reliability and affordability.

Key Points

An IEA-backed pathway for Canada to scale non-emitting power, electrification, and grid links to meet net-zero goals.

✅ Double or triple clean generation to replace fossil fuels

✅ Integrate provincial grids to decarbonize dependent regions

✅ Manage EV and heating loads with reliability and affordability

Canada will need more electricity capacity if it wants to hit its climate targets, and cleaning up Canada's electricity will be critical, according to a new report from the International Energy Agency (IEA).

The report offers mainly a rosy picture of Canada's overall federal energy policy. But, the IEA draws attention to Canada's increasing future electricity demands, and ultimately, calls on Canada to leverage its non-emitting energy potential and expand renewable energy to hit its climate targets.  

"Canada's wealth of clean electricity and its innovative spirit can help drive a secure and affordable transformation of its energy system and help realize its ambitious goals," stated Fatih Birol, the IEA executive director, in a news release.

The IEA notes that Canada has one of the cleanest energy grids globally, with 83 per cent of electricity coming from non-emitting sources in 2020. But this reflects nationwide progress in electricity to date; the report warns this is not a reason for Canada to rest on its laurels. More electricity will be needed to displace fossil fuels if Canada wants to hit its 2030 targets, the report states, and "even deeper cuts" will be required to reach net-zero by 2050.

"Perhaps more significantly, however, Canada will need to ensure sufficient new clean generation capacity to meet the sizeable levels of electrification that its net-zero targets imply."

Investing in new coal, oil and gas projects must stop to hit climate goals, global energy agency says
The Liberals have promised to create a 100 percent net-zero-emitting electricity system by 2035, with regulating oil and gas emissions and electric car sales as part of the plan; by then, every new light-duty vehicle sold in Canada will be a zero-emission vehicle. The switch from gas guzzlers to plug-in electric vehicles will create new pressures on Canada's electrical grid, as will any turn away from fossil natural gas for home heating.

To meet these challenges, the IEA warns, Canada would need to double or triple the power generated from non-emitting sources compared to today, a shift whose cost could reach $1.4 trillion according to the Canadian Gas Association. 

"Such a shift will require significant regulatory action," the report states, highlighting the need for climate policy for electricity grids to guide implementation, and that will require the federal government to work closely with provinces and territories that control power generation and distribution.

The report notes that the further integration of territorial and provincial electrical grids could allow fossil fuel-dependent provinces, like Alberta, to decarbonize and electrify their economies.

The report, entitled Canada 2022 Energy Policy Review, offers what it calls an "in-depth" look at the commitments Canada has made to transform its energy policy. Since the IEA conducted its last review in 2015, Canada has committed to cutting greenhouse gas emissions by 40 to 45 per cent from 2005 levels by 2030 and achieving net-zero by 2050 under an extended national target.

The IEA is well-known for the production of its annual World Energy Outlook. The Paris-based autonomous intergovernmental organization provides analysis, data, and policy recommendations to promote global energy security and sustainability. Canada is a part of the intergovernmental body, which also conducts peer reviews of its members' energy policy.

Oil and gas emissions rising
Natural Resources Minister Jonathan Wilkinson responded to the report in the IEA news release.

"This report acknowledges Canada's ambitious efforts and historic investments to develop pathways to achieve net-zero emissions by 2050 and ensure a transition that aligns with our shared objective of limiting global warming to 1.5 degrees Celsius," Wilkinson's statement read.

The report notes that — despite that objective — absolute emissions from Canadian oil and gas extraction went up 26 per cent between 2000 and 2019, largely from increased production.

Minister of Natural Resources Jonathan Wilkinson responds to a question at a news conference after the federal cabinet was sworn in, in Ottawa, on Oct. 26, 2021. (Justin Tang/The Canadian Press)
"Canada will need to reconcile future growth in oil sands production with increasingly strict greenhouse gas requirements," the report states.

On the plus side, the IEA found emissions per barrel of oilsands crude have decreased by 20 per cent in the last decade from technical and operational improvements.

The improving carbon efficiency of the oilsands is a "trend that is expected to continue at even higher rates," said Ben Brunnen, vice-president of oilsands, fiscal and economic policy at the Canadian Association of Petroleum Producers.

That may become important, the IEA report notes, as energy investors and buyers look for low-carbon assets and more countries adopt net-zero policies.

Further innovation, such as carbon capture and storage, could help to turn things around for Canada's oil patch, the report says. The Liberals have also said they will place a hard cap on oil and gas emissions from production, but that does not include the burning of the fossil fuels. 

In 2021, the IEA released a report that determined to achieve net-zero by 2050, among many steps, investments needed to end in coal mines, oil and gas wells. Thursday's report, however, made no mention of that, which disappointed at least one environmental group.

"A glaring omission was that this assessment says nothing about production. We know that the most important thing we can do is to stop using and producing oil and gas," said Julia Levin, a senior climate and energy program manager at Environmental Defence.

"And yet that was absent from this report, and that really is a glaring omission, which is completely out of line with their [the IEA's] own work."

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Manitoba Hydro Rate Increase sets electricity rates up 2.5% annually for three years via Bill 35, bypassing PUB hearings, citing Crown utility debt and pandemic impacts, with legislature debate and a multi-year regulatory review ahead.

Key Points

A government plan to lift electricity rates 2.5% annually over three years via Bill 35, bypassing PUB hearings.

✅ 2.5% annual hikes for three years set in legislation

✅ Bypasses PUB rate hearings during pandemic recovery

✅ Targets Crown utility debt; multi-year review planned

The Manitoba government is planning to raise electricity rates, with Manitoba Hydro scaling back next year, by 2.5 per cent a year over the next three years.

Finance Minister Scott Fielding says the increases, to be presented in a bill before the legislature, are the lowest in a decade and will help keep rates among the lowest in Canada, even as SaskPower's 8% hike draws scrutiny in a neighbouring province.

Crown-owned Manitoba Hydro had asked for a 3.5 per cent increase this year, similar to BC Hydro's 3% rise, to help pay off billions of dollars in debt.

“The way we figured this out, we looked at the rate increases that were approved by PUB (Public Utilities Board) over the last ten years, (and) we went to 75 per cent of that,” Fielding said during a Thursday morning press conference.

“It’s a pandemic, we know that there’s a lot of people that are unemployed, that are struggling, we know that businesses need to recharge after the business (sic), so this will provide them an appropriate break.”

Electricity rates are normally set by the Public Utilities Board, a regulatory body that holds rate hearings and examines the Crown corporation’s finances.

The Progressive Conservative government has temporarily suspended the regulatory process and has set rates itself, while Ontario rate legislation to lower rates moved forward in its jurisdiction.

Manitoba Liberal leader Dougald Lamont was quick to condemn the move, noting parallels to Ontario price concerns before saying in a news release the PCs “are abusing their power and putting Hydro’s financial future at risk by fixing prices in the hope of buying some political popularity.”

“Hydro’s rates should be set by the PUB after public hearings, not figured out on the back of a napkin in the Premier’s office,” Lamont wrote.

Fielding noted the increase would appear as an amendment to Bill 35, which will appear in the legislature this fall, as BC Hydro plans multi-year increases proceed elsewhere.

“All members of the legislative assembly will vote and debate this rate increase on Bill 35,” Fielding said.

“This will give the PUB time to implement reforms, and allow the utilities to prepare a more rigorous, multi-year review application process.”

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RBC Renewable Energy PPA supports a 39 MW Alberta solar project, with Bullfrog Power and BluEarth Renewables, advancing clean energy in a deregulated market through a long-term power purchase agreement in Canada today.

Key Points

A long-term power purchase agreement where RBC buys most output from a 39 MW Alberta solar project via Bullfrog Power.

✅ 39 MW solar build in County of Forty Mile, Alberta

✅ Majority of output purchased by RBC via Bullfrog Power

✅ Supports cost-competitive renewables in deregulated market

The Royal Bank of Canada says it is the first Canadian bank to sign a long-term renewable energy power purchase agreement, a deal that will support the development of a 39-megawatt, $70-million solar project in southern Alberta, within an energy powerhouse province.

The bank has agreed with green energy retailer Bullfrog Power to buy the majority of the electricity produced by the project, as a recent federal green electricity contract highlights growing demand, to be designed and built by BluEarth Renewables of Calgary.

The project is to provide enough power for over 6,400 homes and the panel installations will cover 120 hectares, amid a provincial renewable energy surge that could create thousands of jobs, the size of 170 soccer fields.

The solar installation is to be built in the County of Forty Mile, a hot spot for renewable power that was also chosen by Suncor Energy Inc. for its $300-million 200-MW wind power project (approved last year and then put on hold during the COVID-19 pandemic), and home to another planned wind power farm in Alberta.

BluEarth says commercial operations at its Burdett and Yellow Lake Solar Project are expected to start up in April 2021, underscoring solar power growth in the province.

READ MORE: Wind power developers upbeat about Alberta despite end of power project auctions

It says the agreement shows that renewable energy can be cost-competitive, with lower-cost solar contracts in a deregulated electricity market like Alberta’s, adding the province has some of the best solar and wind resources in Canada.

“We’re proud to be the first Canadian bank to sign a long-term renewable energy power purchase agreement, demonstrating our commitment to clean, sustainable power, as Alberta explores selling renewable energy at scale,” said Scott Foster, senior vice-president and global head of corporate real estate at RBC.

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