[DigitalToday reporter Jinju Hong (홍진주)] An analysis says that as car insurance premiums and repair costs rise quickly in Europe, the cost-saving effect long cited as a key advantage of the shift to electric vehicles (EVs) is weakening. While the EV market is growing on falling battery prices, rising insurance premiums, a lack of charging infrastructure and pressure on power grids are emerging as new obstacles.

Cryptopolitan, a blockchain media outlet, reported on May 18 that European households' car maintenance costs have surged since the COVID-19 pandemic. Car insurance premiums have risen about 37 percent since 2021. Repair and maintenance costs have also increased by about 20 to 30 percent due to vehicle electrification and higher prices for battery parts. In France and Germany, spending related to cars accounted for 7 to 8 percent of household consumption, while low-income households bore up to 11 percent.

Amid this situation, concerns are also growing that EVs may not reduce household burdens as much as expected. James Kahn, head of Asia-Pacific industrial research at BNP Paribas, said that in some markets the fuel-cost savings from EVs could be largely offset by higher insurance premiums and maintenance costs. For consumers, that means the perceived amount saved after switching to EVs may be smaller than expected.

A lack of charging infrastructure is also cited as an unresolved problem. The number of chargers in Europe has increased by about 20 percent each year since 2020, reaching about 1.1 million as of early 2026, but that is far short of the European Union's 2030 target of 3.5 million. Meeting the goal would require average annual growth of about 27 percent, but at the current pace Europe could fall short by about 800,000 units, the analysis said.

In particular, ultra-fast DC chargers accounted for about 16 percent of the total, and charging infrastructure is concentrated in a handful of countries including the Netherlands, France, Germany and Belgium. Rural and outer areas still have low access to charging, which is cited as a limit to wider EV adoption.

Strain on power grids is also a new variable. The International Energy Agency forecast that data centre electricity use within the European Union will rise about 65 percent to 115 TWh in 2030 from 70 TWh in 2024. With demand rising at the same time from AI data centres and EV charging, competition could intensify over limited grid capacity, the analysis said.

By contrast, rising oil prices are acting as a factor that stimulates demand for EVs. As Brent crude prices have climbed, gasoline prices in France, Germany and the Netherlands have risen above 2 euros per litre. That is the highest level since the early stage of the Russia-Ukraine war. If carbon-neutral regulations tighten in the future, oil prices could also rise above $100 a barrel, the report said.

Even so, the EV market itself continues to grow. The market was valued at about $575 billion in 2026 and is forecast to expand to about $2.3 trillion by 2036. A key driver is falling battery prices. Lithium-ion battery prices fell to $108 per kWh in 2024 from $1,474 per kWh in 2010, and the industry has also raised the possibility that they could fall to below $60. If that happens, EV price competitiveness could improve even without subsidies.

The bidirectional charging market is also growing. The market for bidirectional EV chargers is forecast to expand to $6.2 billion in 2032 from $1.4 billion in 2025. The system sends electricity back from vehicles to the grid, regulating power use and widening driver choice.

Ultimately, whether the EV market expands is not determined by falling battery prices alone. Cutting the burden of insurance premiums and repair costs, speeding up charger deployment, and whether EVs can function within the power grid not as simple consumers but as distributed power resources are emerging as variables that will determine the pace of adoption.