EU's New Car Market: A Shift Towards Electrification, Except for Tesla's Stumble
European Car Market Shows Slight Growth; Electric Vehicles See Notable Rise, Except for Tesla Models - Europe's new car market experiences marginal growth; electric vehicles see enhanced development, excluding Tesla's sales figures.
Let's take a gander at the recent developments in the European automotive market. Electric vehicles (EVs) are on a roll, with an impressive 25.0% surge compared to last year. Hybrids are holding steady with a 18% increase, while gasoline and diesel models are taking a tumble, down 18.6% and 27.6% respectively.
As for the market share in May, hybrids reigned supreme with 35.1%, adding the 8.2% market share for plug-in hybrids pushes the hybrid total beyond the combined market share of gasoline and diesel cars, which only managed to score 38.1%. Pure electric cars made up 15.4% of new car registrations.
Automotive expert Constantin Gall from EY gave his two cents, stating, "Electromobility is making strides, albeit slower than anticipated by the political and industrial sectors. The ambitious, yet stretched, emission targets set by the EU continue to put the heat on car manufacturers to push more electric vehicles."
However, Tesla, a major player in the EV market, seems to be experiencing a stumble. Sales plummeted by a whopping 40.5% in May compared to the previous year in the European Union. In the first five months of 2022, Tesla sales in the EU dropped a staggering 45.2%.
Overall, consulting firm EY labels the development in the new car market as lackluster. "Demand for new cars remains at a low level, with no growth momentum across the EU," explains Gall. "Sales volumes are lacking, keeping the pressure on the industry at an extreme level."
Now, why is Tesla struggling? Well, there are a few reasons:
- According to reports, Tesla's registrations in the EU plummeted by 40.5% year-over-year in May, dropping to 8,729 units compared to the previous year[1].
- Despite the overall European EV market expanding strongly, with battery electric vehicle sales rising 25% year-over-year, Tesla's sales declined by 28% in 30 European countries in May[2].
- One potential problem is that Tesla's new Model Y production retooling, which CEO Elon Musk promised would lead to a significant sales rebound, was completed months ago but has not resulted in higher sales yet[2]. The new models are readily available but haven't reversed the decline.
- Market competition heated up, with China's SAIC Motor increasing its European vehicle sales by 38%, selling 18,716 vehicles in May, outnumbering Tesla's 8,729[2]. SAIC Motor has surpassed Tesla in the region.
- Furthermore, in key markets like Germany—where EV sales surged 45%—Tesla faced challenges due to Musk's political controversies, such as his public support for the far-right, anti-immigrant Alternative for Germany party. This alienated potential buyers and probably dampened Tesla's demand in this important market[2].
In a nutshell, Tesla's sales slump in the EU during this period can be attributed to increased competition, unfulfilled expectations from production updates, and negative consumer sentiment linked to Musk's political stance, all while the broader EV market in Europe was growing rapidly[1][2].
The European community shows an increasing preference for electrification in the automotive sector, with electric vehicles (EVs) and hybrids witnessing significant growth compared to gasoline and diesel models. However, amidst this positive trend, the community-led Tesla, a prominent EV player, faces a stumble, experiencing a 40.5% drop in sales in May compared to the previous year.
Despite the expanding European EV market, Tesla's sales are declining in various markets, due to factors such as increased competition, unfulfilled production updates, and negative consumer sentiment potentially influenced by Musk's political controversies.
