According to data released by the European Automobile Manufacturers Association (ACEA), driven by major markets such as Italy, Germany and Spain, new car registrations in Europe reached 1.31 million units in June, up 3.6% year-on-year, reversing the year-on-year decline in May. Thanks to the growth of all five major European car markets, the cumulative number of new car registrations in Europe reached about 6.88 million in the first half of the year, a year-on-year increase of 4.4%.
European auto market in June: Overall sales increased by 3.6%, and pure electric vehicle sales increased slightly by 0.1%
First of all, from the perspective of the market, in June, more than half of the European countries registered new car registrations compared to the same period last year. Among the five major European car markets, sales in Italy (+15.1%), Germany (+6.1%), Spain (+2.2%) and United Kingdom (+1.1%) all achieved varying degrees of growth, but France sales decreased by 4.8%.
In the first half of the year, cumulative vehicle sales in most European countries increased year-on-year, including the five major European car markets – United Kingdom (+6%), Spain (+5.9%), Germany (+5.4%), Italy (+5.4%) and France (+2.8%).
In terms of fuel type, BEV sales in Europe were largely flat in June, up slightly 0.1% year-on-year, but market share fell to 15.9% from 16.5% a year ago, mainly because growth in Belgium and Italy failed to offset double-digit declines in Germany, Netherlands and France.
Italy BEV deliveries more than doubled, benefiting from a surge in EV demand on the back of the Italy government's long-awaited subsidies, but BEV registrations in France, Germany and Netherlands fell by 10.3%, 18.1% and 15%, respectively, the data showed.
From January to June, European BEV sales reached 950,000 units, a slight increase of 1.6% from the same period last year, but the market share fell to 13.9% from 14.2% in the same period last year, which is contrary to the industry's expectations for the accelerated transformation of the EV market.
As Europe's largest electric vehicle market, the German government's sudden cancellation of pure electric vehicle subsidies at the end of last year hit consumers' willingness to buy cars, resulting in a 16.4% decline in Germany's pure electric vehicle market in the first half of the year.
Lucien Mathieu, head of the European environmental organization Transport & Environment, even bluntly said that Germany has dragged down the entire European market when it comes to pure electric vehicles.
From the perspective of car companies, last month, Volkswagen Group, Stellantis and Renault Group remained the best-selling automakers in Europe, Volkswagen Group and Renault Group sales in Europe for the month were 3.2% and 7.6% year-on-year, respectively, but Stellantis sales fell 1.8%. In addition, Volvo Cars' sales in Europe surged by 31.8%, partly due to the EX30 electric compact SUV. It is reported that the EX30 is deeply loved by European consumers and has become one of the best-selling electric vehicles in Europe.
In the first half of the year, Volkswagen Group, Stellantis and Renault Group remained among the top three in Europe, with sales up 3.4%, 0.1% and 3.8% year-on-year, respectively. Although the BMW Group's European sales fell 2.1% in June, the cumulative sales in the first half of the year increased by 4.8%. In addition, BMW's sales decline of 3.3% in Germany in the first half of the year did not affect its overall performance in Europe.
It is worth noting that the demand for Tesla vehicles in Europe continued to weaken, resulting in a 7.2% decline in European sales in June and a 12% decline in sales in the first half of the year. Tesla's unsatisfactory performance in the European market was mainly affected by reduced subsidies and reduced demand from fleet operators. It is reported that last year, fleet operators accounted for nearly half of Tesla's European sales.
This year, the European auto market is facing a test
At present, high borrowing costs and sluggish economic growth across Europe are weighing on consumer sentiment across the market. In the first half of this year, European car sales were still below pre-pandemic levels in 2019, with EU car sales about 18% below 2019 levels.
However, the number of new car registrations in the EU in June hit a new high since July 2019, indicating that the EU car market is constantly recovering from supply chain issues and the market is expected to continue its growth trend. The number of new car registrations in the EU in 2024 is expected to be 10.7 million, an increase of about 2.5% year-on-year.
However, under the shadow of high inflation and interest rates, high prices for electric vehicles, the removal of subsidies by some governments, and the European Union's imposition of tariffs on Chinese-made electric vehicles, the transformation of electric vehicles in Europe has been "faltering", and the market is also full of uncertainty.
According to research by Jato Dynamics, the average selling price of an electric car in Europe is around 65,000 euros, which is about twice the price of a conventional model.
Currently, EV demand remains highly vulnerable to incentives due to the higher price of EVs. The governments of Germany and Sweden have eliminated subsidies, leading to a decline in the number of BEV registrations in the first half of the year. Instead, the Italy government introduced its long-awaited subsidy policy in early June, prompting the registration of pure electric vehicles to more than double that month.
"This is a market that is extremely sensitive to policy changes," Fabrice Cambolive, CEO of the Renault brand, said at a recent conference. "The new incentives have spurred demand for electric vehicles, and the demand for plug-in hybrids is actually customer-driven."
As subsidies have been reduced in some regions, the market has become dependent on incentives from automakers, but this is not sustainable. Citi analyst Harald Hendrikse wrote in a note this month: "Losses on battery electric vehicles are still too high, and investment needs to be cut, and it is being cut." ”
As a result, car and battery manufacturers have been forced to postpone or adjust their EV targets and are re-evaluating their projects. Stellantis has stopped electric vehicle production at its Mirafiori plant near Turin, and the Volkswagen Group may close its plant in Belgium that produces the Audi Q8 e-tron electric car.
In addition, the EU's imposition of temporary tariffs on Chinese-made electric vehicles will also have an impact on the market and car companies. Volvo Cars CEO Jim Rowan said in an interview that the company had revised its 2024 sales forecast to a 12-15% increase due to "uncertainty surrounding trade tariffs and their impact on demand," rather than at least 15% as previously forecasted, though "our target remains at the high end of the range."
After several years of strong growth, the European EV market will face a severe test this year.