Registrations for battery-electric trucks grew by 51 per cent year-on-year in Europe, according to a road transport report.
The report, a jointly authored study on Q1 2025 European road freight rates by Upply, Ti and the International Road Transport Union (IRU), found the growing popularity of electric vehicles in the commercial transport sector saw them reach a 3.5 per cent market share.
This is seen as a continuation of a spike in sales of electric vehicles across the EU.
In 2023, electric truck sales increased almost threefold to reach more than 10, 000 units, which was more than 1.5 per cent of the sales share.
The EU has committed to a legally binding target of net-zero carbon emissions by 2050 under the European Climate Law, under which electric trucks are viewed as an indispensable aspect of decarbonising road-freight transport.
Conversely, the report found that new capacity entering the market has been constrained for Q1, with heavy goods vehicle registrations falling by 16 per cent between Q1 2024 and Q1 2025, equating to a seven per cent drop, quarter-on-quarter.
In related road transport topics, the report discussed issues pertaining to truck drivers and cost issues.
It found a driver shortage crisis was persisting, after the IRU reported there were 426,000 unfilled truck driver jobs in Europe in 2024, despite indications that drivers’ wages are continuing to rise.
For example, driver wages increased by 5.1 per cent y-o-y for Spanish drivers involved in international operations, according to the Spanish Ministry of Transport.
The wage increases in countries, such as Spain and Italy, follow 4 per cent y-o-y labour cost increases across the EU in Q4 2024.
IRU Senior Director for Strategy and Development, Vincent Erard said: “Road transport stands at a critical inflection point – where resilience, sustainability and competitiveness must converge.
“Despite economic headwinds and global trade uncertainty, Europe’s transport sector has the potential to power a new cycle of regional growth.
“Policymakers and industry must now co-create the conditions that enable long-term investment, digital transformation and decarbonisation – especially for the SMEs that form the backbone of our supply chains.”
The report also found that the European road freight rates index shows that Q1 2025 contract rates fell by 2.3 points, quarter on quarter (q-o-q), while spot rates declined more sharply, 3.8 points q-o-q.
However, year on year (y-o-y) the spot index was up by 1.6 points and the contract index rose by 0.4 points.
This indicates the end-of-year peak period has been followed by a return to low European demand, the report found.
This has resulted in freight rates remaining low in Q1 of 2025, with consumer demand remaining subdued and increased costs slowing growth.
It also found that industry sentiment has been dampened due to the trade tariffs dispute, bringing uncertainty and reduced international demand for European manufacturers.
Consumer spending in Europe has remained stagnant, increasing only 0.6 per cent q-o-q, according to Eurostat, with 61 per cent of households maintaining similar income, saving and spending levels compared to the previous quarter, according to a McKinsey consumer survey.
At the start of 2025, spending patterns followed usual seasonal trends, slowing down after their peak in Q4, which put downward pressure on freight rates, particularly spot rates, the report found.
It found that geopolitical changes and global economic instability have renewed focus on strengthening local and regional economies, including the “Buy European” initiative.
While the report found that there would be short-term pain for the EU, as a recovery is being held back by ongoing tariff uncertainties and policy disruptions, there was a more positive outlook in the medium term.
Real GDP is projected to strengthen, driven by growth in consumption, improved investment, increased household spending and recovering foreign demand.
Economic activity in the EU area is also expected to expand by 0.2 per cent across the first three quarters of 2025, the report authors said.
These trends point to gradually improving demand conditions, which could support a rebound in freight volumes and rate stability in the medium term.
Upply CEO Thomas Larrieu said: “The European road transport market is once again going through a complex phase, as major uncertainties in global trade are likely to weaken the still fragile economic recovery.
“At the same time, this may also lead to an acceleration of nearshoring, which could stimulate demand for road transport.
“The current balance of power remains fairly favourable to shippers, but it is wise to secure long-term capacity based on balanced partnerships with carriers.”
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