The automotive industry in Europe faces significant challenges, particularly in France, where electric vehicle sales have declined in 2024. In contrast, the UK has experienced a remarkable increase, with a 21.4% rise in electric vehicle sales, leading to a 19.6% market share. Factors such as government incentives and discounts have contributed to this growth, although consumers still view electric cars as expensive. Businesses dominate the market, benefiting from better tax incentives compared to individual buyers.
Describing the current state of the automotive industry as a crisis feels like an understatement. The scenario is especially challenging in Europe, with France witnessing a downturn in electric vehicle sales in 2024. While electric cars aren’t the sole reason for this decline, there is indeed a noticeable decrease in enthusiasm among consumers.
A Remarkable Surge in Neighboring Countries
Despite a stable market share for electric vehicles in France, the situation is quite different in other regions. For instance, Germany has seen a substantial drop, primarily attributed to the elimination of the ecological bonus. On a brighter note, some countries are thriving in the electric car sector. The United Kingdom stands out, having reported a significant upswing over the past year, as highlighted by the SMMT (Society of Motor Manufacturers and Traders).
This automotive organization revealed that electric vehicle sales have risen dramatically in 2024, with a remarkable 21.4% growth from 2023, totaling 381,970 units sold. In December alone, 43,656 new registrations were recorded, marking a remarkable 56.8% increase compared to the previous year. Consequently, electric cars now represent 19.6% of the market share.
This trend is promising, allowing the UK to emerge as the leading European market, overtaking Germany due to its significant sales decline. Nonetheless, Norway remains ahead in market share, with electric vehicles making up 89% of new car sales in 2024 according to Reuters, although the total number of registered vehicles is lower.
In the UK, similar to France, the Tesla Model Y has taken the lead in electric car sales, achieving 32,862 units sold in 2024. The Model 3 also saw good performance last month, although it fell short in the annual rankings due to inconsistent delivery schedules, as it is not manufactured in Europe.
Significant Efforts Yielding Results
Additionally, vehicles like the Audi Q4 e-tron, MG4, BMW i4, and Mercedes EQA have also gained traction. However, it’s noteworthy that no French vehicles made it to the top 10 sales list throughout the past year. This impressive achievement has been heavily influenced by the UK government, which initially set a target of 22% market share for electric vehicles in 2024, a goal that ultimately fell short. Nonetheless, various strategies have been deployed to work towards this objective.
One such strategy includes the implementation of substantial discounts from manufacturers, totaling £4.5 billion over the past year, equivalent to approximately €5.4 billion. However, this approach is not sustainable in the long run, as car manufacturers need to recover their investments in electrification. They must strike a balance between affordable pricing for customers and maintaining adequate profit margins. Many consumers still perceive electric vehicles as too pricey, despite the price cuts.
This situation likely contributes to the fact that electric cars have found a more favorable market among businesses rather than individual consumers. Last year, only 1 in 10 consumers purchased a zero-emission vehicle, while professionals accounted for 25.4% of electric vehicle sales, with an additional 64,000 registrations compared to 2023. This trend is largely due to more advantageous tax incentives for electric vehicle purchases for businesses over private buyers in the UK.