Auto sales in Europe continued to surge for the 13th consecutive month, with electric vehicles (EVs) driving much of the growth. According to the European Automobile Manufacturers’ Association, new-car registrations increased by 21% to 904,509 units in August.
The rising demand for EVs was evident as sales of electric cars doubled, accounting for over 20% of EU sales for the first time. This surge in EV sales comes just as the European Commission opened an anti-subsidy investigation into Chinese electric cars.
While the European auto trade group does not provide a breakdown of regional sales or specific manufacturer data, the strong demand for EVs demonstrates why Chinese companies are increasingly interested in establishing a presence in the European market.
Automakers like Volkswagen and Stellantis have also benefited from a backlog of orders that were accumulated during the pandemic-related disruptions in the supply chain. However, this momentum may be challenged by central banks raising borrowing costs to curb inflation.
Demand outstripping supply could reverse in the second half of the year as vehicle production normalizes and orders soften. It’s worth noting that sales are still down by around 25% compared to pre-pandemic levels.
Despite this, the demand for battery-powered vehicles continues to climb, with new EV registrations across Europe soaring by 102% in August, reaching nearly 197,000 cars. Germany led the pack with almost 87,000 fully electric vehicles registered, followed by France and the UK.
Volkswagen emerged as the top-selling automaker in the region for both overall passenger cars and fully electric cars. However, job cuts at its main EV factory in Germany indicate that the company is preparing for a potential slowdown in demand.
While the shift towards EVs has been welcomed by many industry executives, concerns have arisen due to the European Commission’s anti-subsidy investigation into Chinese electric cars. This move could lead to potential retaliation from Beijing and negatively impact the European car manufacturers, posing a risk to the growth of EV adoption.
Overall, the surge in auto sales in Europe, driven by the increasing demand for electric vehicles, indicates the significant role that EVs are playing in the automotive market. However, challenges lie ahead with potential supply chain issues and trade tensions that could disrupt the industry.
