Despite a positive trend in new car registrations for the first half of 2024, there are indications of a slowdown in the key growth drivers. Analysis from JATO Dynamics covering 28 European nations showed that new registrations of passenger cars grew only by 4.4% from January to June 2024, compared to the same period last year. This resulted in a volume increase from 6,559,213 units in the first half of 2023 to 6,847,842 units in the first half of 2024.

Felipe Munoz, an International Analyst with JATO Dynamics, remarked: “The growth in Europe is becoming more restrained, remaining significantly below pre-pandemic levels due to a more intricate operational landscape. This includes challenges related to emissions regulations, rising vehicle prices, and obstacles hindering widespread adoption of electric vehicles (EVs). Since the semiconductor supply shortage, electric vehicles have been the primary catalyst for expansion. Hence, it is crucial for the industry to take all necessary actions in the next half-year to eliminate uncertainties surrounding the EV market, including the potential impact of EU tariffs on imported electric vehicles from China on their affordability.”

During the initial half of 2024, registrations of electric vehicles from Chinese manufacturers reached a total of 70,000 units. This signified a 26% surge compared to the first half of 2023. Concurrently, their market stake for BEVs surged from 5.97% to 7.37% during the same timeframe. Among all automotive groups, this growth in market share ranked third-highest, surpassed only by Volvo-Polestar (+2.9 points) and BMW Group (+2.2 points).

Felipe Munoz, the Global Analyst at JATO Dynamics, pointed out: “The actions taken by the European Union to levy tariffs on BEV imports from China specifically target models that represented 17% of BEV registrations in Europe during the first half of 2024, excluding potential units imported by Tesla.”

The Volvo EX30, manufactured in China, stood out as the third most registered electric passenger vehicle in Europe during the first half of 2024. Following closely was the MG4, also originating from China. Munoz continued: “It’s evident that China has significantly contributed to driving growth in the market. Without the competitive pricing offered by China, consumers may encounter elevated prices, potentially resulting in a drop in demand over the forthcoming months.”

BMW and Chinese OEMs Surge Ahead

In the first half of 2024, Volkswagen Group led the European BEV market with 178,000 units. Nonetheless, its volume witnessed a 14% decline compared to the first half of 2023. This was influenced by a 24% drop for the Volkswagen brand and a sharp 55% decrease for Porsche. Despite the ongoing updates for Volkswagen’s ID.3 and ID.4 models, both are relatively dated at nearly 5 and 4 years old, respectively, making it challenging for the German OEM to attract new potential customers.

Contrastingly, BMW Group and Chinese OEMs made significant strides during the initial half of 2024. BMW Group secured nearly 10% market share within the BEV segment, up from 7.5% in the first half of 2023. This growth was fueled by the strong performance of the BMW iX1, i4, the introduction of the i5 (the top-selling large electric car), iX2, and the Mini Countryman. As a brand, BMW registered more electric cars than the Volkswagen brand in the first half of 2024.

Chinese OEMs also showcased strong performance in the first half of the year. Geely Group, the parent company of Volvo, Polestar, and Lotus, grew its BEV registrations by 52% compared to the same period in 2023, surpassing Hyundai-Kia, Mercedes, and Renault Group. This growth was fueled by the remarkable results of the Volvo EX30, Europe’s third top-selling electric vehicle.

BYD recorded 17,000 electric vehicle registrations, a significant increase of 14,000 units compared to the first half of 2023. This growth propelled BYD ahead of Nissan, Smart, Toyota, Polestar, Citroen, Dacia, Ford, Mini, Porsche, and Mazda. Consequently, BYD now ranks as the 16th best-selling BEV brand in Europe, following MG, which held the 8th spot in the BEV ranking.

Xpeng registered 2,214 electric vehicles, a significant rise from 51 in the first half of 2023; Great Wall Motors doubled its volume to 2,123 units; ZEEKR secured 821 units compared to 0 in the first half of 2023; Hongqi increased its units to 366, marking a 266% surge; while Voyah recorded 225 units compared to 8 units in the first half of 2022.

Munoz emphasized: “Intense domestic competition is the primary driver behind the remarkable progress witnessed in China. Nonetheless, challenges like market saturation, overstocking, and price competition imply that many Chinese brands must focus on international expansion to achieve their growth targets.” Between 2020 and 2023, Chinese brands expanded their international car sales by 5.4 times. To learn more about the rise of Chinese OEMs and their global aspirations, refer to JATO’s latest research paper here.

Tesla’s Slowing Growth

After a period of consistent expansion, Tesla is now indicating signs of deceleration. Tesla’s registrations in Europe decreased from 185,200 units in the first half of 2023 to 161,600 units in the same period this year. Munoz further commented: “This trend mirrors what we have observed in the US, with three key reasons driving this shift. Firstly, sustaining growth with an aging product lineup is challenging for any brand. Secondly, heightened competition from other players, particularly BMW, is expected to impact Tesla’s registrations, and lastly, Tesla’s strategy of price reductions seen in 2023 is becoming less effective due to the growing number of Chinese OEMs offering competitive pricing for their vehicles.”

While the Model Y and Model 3 continued to lead the European BEV rankings, the former is no longer the preferred model in the market, slipping to the 8th position and experiencing the most significant decline from being the top choice to the 73rd position overall. The newly refreshed Model 3 in 2024, however, is showing promising growth with a 37% increase, although its expansion may be hindered by the European consumer preference leaning away from sedans.

SOURCE: JATO Dynamics