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EU car market has grown, Germany is in the midfield when it comes to electric cars

As of: February 20, 2024 1:41 p.m

The European Union's car market grew again in January – although this was also due to special effects. When it comes to the market share of electric cars, Germany is only in the European midfield.

The growth in new car registrations in the European Union recovered at the beginning of the year after a setback in December. The number of newly registered cars rose by 12.1 percent to 851,689 in January compared to the same period last year, as the European industry association Acea announced today in Brussels. At the start of the year, the major markets of Germany, Italy, France and Spain grew by double-digit percentages, some of them.

New car market still below pre-Corona levels

In the long term, however, it is noticeable that the EU new car market has still not reached its pre-Corona level. The number of new registrations in January was 18 percent below the level in January 2019.

In addition, the strong increase now recorded compared to the same month last year is primarily due to the very low level of the previous year. The comparable month of January 2023 was weak after a cut in state funding for electric cars in this country.

Every second newly registered car is a combustion engine

Since the end of 2023, there has been no purchase premium at all, which is why electric car sales in Germany grew significantly slower than in the neighboring countries of France, Belgium and the Netherlands. Across the EU, the share of battery-electric cars in new registrations rose from 9.5 percent in January 2023 to 10.9 percent at the beginning of the year. However, it was well below the full-year figure for 2023 of 14.6 percent.

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The market share of combustion cars fell by four percentage points to 50 percent compared to the same month last year. This means that every second car newly registered in the EU in January had a petrol or diesel engine.

Electric cars are particularly popular in Scandinavia

If you look at the individual nations, Germany once again positioned itself in the European midfield with an electric car market share of 10.5 percent for new registrations. The highest market shares of electric cars in January were registered in Denmark and Sweden at 35 percent and 29 percent.

Electric cars continue to have a difficult time, especially in Eastern and Southern Europe: Italy and Croatia had the lowest market shares at two percent each.

“The abrupt end of the environmental bonus has unsettled buyers”

EY expert Constantin Gall does not expect new registrations of electric cars in Germany to rise sharply this year – on the contrary: “The abrupt end to the environmental bonus has massively unsettled potential buyers and will lead to many new car buyers now deciding will one day decide on a combustion engine.”

To make matters worse, large buyers such as car rental companies are becoming more and more cautious due to the lack of demand in the rental business, poor residual value development and high repair costs for electric cars.

Car manufacturers respond with a discount battle

Overall, according to experts, the new car market in the EU is likely to remain well below pre-crisis levels. Gall is also convinced that the growth curve will continue to flatten in the coming months. The reason for this is the weak economy and the significant geopolitical tensions.

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Car manufacturers tried to counter customers' low willingness to buy with discounts: “We are seeing the beginnings of a massive discount battle,” said Gall. The current purchasing reluctance has caught manufacturers off on the wrong foot.

Which cars are popular in the EU

The Volkswagen Group has recently been able to defend its position as market leader in the European Union. In January, the Wolfsburg-based company had a market share of around 26 percent with 221,011 registered cars. In second place, the Opel parent company Stellantis improved slightly to a good 19 percent. The French competitor Renault Group, however, brought three percent fewer vehicles onto the market.

Of the German premium manufacturers, BMW increased its market share by one percentage point to just under six percent, while Mercedes-Benz lost the same amount to around four percent. 14,466 vehicles were registered by the US electric car manufacturer Tesla, which means an increase in market share from 1.1 percent in the previous year to 1.7 percent.

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