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Europe's SUV boom widens wealth gap as car costs soar for the poor

From 3% to 45% in two decades: How Europe's SUV obsession reshaped roads—and left the poor behind. Can policy fix this growing divide?

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2 min read
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Europe's SUV boom widens wealth gap as car costs soar for the poor

Car ownership and spending in Europe have shifted dramatically over the past two decades. The wealthiest drivers now spend far more on vehicles, while larger, less efficient cars dominate the market. Meanwhile, policymakers are exploring ways to balance costs and reduce inequality in transport expenses.

Between 2001 and 2023, the share of small and medium-sized cars in the EU-27 plummeted from 69% to just 33%. In their place, SUVs surged from 3% of new sales to 39%. The trend was even sharper in the top five EU markets—Germany, France, Italy, Spain, and the Netherlands—where SUV registrations jumped from under 10% in 2005 to over 45% by 2024. Consumers favoured higher seating positions, perceived safety benefits, and lower fuel prices until 2020, while automakers heavily promoted these models. The shift also aligned with stricter EU CO₂ rules, as manufacturers rolled out electrified SUVs.

The cost burden of driving falls unevenly across society. The richest 20% of earners spend over six times more on cars than the poorest 20%, treating them as a luxury. They also drive more, contributing over three-quarters of fuel tax revenues, despite making up just 60% of the population. Yet drivers overall only cover 40-50% of the broader social costs of motoring, such as pollution and infrastructure wear. Transport poverty remains relatively rare in the Netherlands, affecting around 5% of households—mostly low-income families, the unemployed, and welfare recipients. The EU's Social Climate Fund, with €65 billion allocated, aims to tackle this through targeted mobility support. Experts suggest that higher car taxes, combined with financial aid for low-income groups, could create a fairer system. Encouraging urban density, where destinations are closer together, also offers a way to cut transport costs for everyone.

The rise of SUVs and unequal spending on cars highlight deep disparities in European transport. While wealthier drivers bear more fuel tax, they also benefit from larger, costlier vehicles. Policies like the Social Climate Fund and urban planning changes could help reduce inequality, ensuring mobility remains affordable for all.

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