Demand for electric cars slows, manufacturers run for cover

The slowdown in the demand for electric cars is mainly a European problem. In the first half of 2024, just under seven million vehicles were sold globally, a growth of 20 per cent. The point is that in China alone, according to Rho Motion, 4.1 million were sold (+30%). In the EU-Efta-UK area just 1.5 million (+1%). In the US and Canada 0.8 million (but +10%). In the rest of the world 0.6 million (+26%). Since the beginning of the year, sales of battery-powered cars and plug-in hybrids in Europe are -4% and by the end of 2024 will not break even with 2023, at 3.1 million. China: 10.5 million and +30%.

These numbers, together with estimates of newBev registrations by the end of the decade down to 30-40% of the total against the previous 50%, will have significant effects on the industry's strategies. In the short term, the European manufacturers that have invested most in the flexibility of multi-energy platforms (Renault with the CMF-EV, Stellantis with CMP2 and STLA or Bmw with CLAR, capable of supporting both internal combustion engines and hybrid and electric engines) have started to update their range, with more hybrid models on show. In an attempt to get closer to the new EU CO2 emission limits, which could force manufacturers, in the absence of a turbo-growth in electric stock, to cut production by 2-2.5 million units to avoid maxi-sanctions.

'The real problem,' comments Gianluca Di Loreto, partner at Bain & Company, 'is not what to produce, but at what cost. It is not enough to have a flexible platform if the production costs of electric vehicles remain uncompetitive compared to global competitors. Sales are in any case in danger of not taking off, due to prices, aggravating the situation'. All this while Brussels is playing the game of duties to curb the feared Chinese invasion. 'Manufacturers,' adds Di Loreto, 'must either accept to pay astronomical penalties, or continue to produce and sell with negative margins. Hence the need to take radical steps to cut costs, a seemingly inevitable strategy to survive this scenario of forced transition'.

In recent weeks, not only in Europe, a profound review of targets has begun. The Vw Group , which is opening a season of redundancies for the first time in its history, while maintaining a target of 70 per cent of Ev sales in Europe by 2030, has repeatedly indicated that this may change depending on market conditions. Stellantis has not changed the overall targets of its Dare Forward 2030 plan, but has suspended production of the Fiat 500e and postponed the construction of battery gigafactories in Termoli and Germany. Renault had predicted in 2022 that all sales of the main brand would be full electric by 2030, but a few months ago it veered towards a dual strategy with Ev and combustion cars for the next 10 years, then beyond 2030.

In February, Mercedes-Benz stated that Ev sales, including hybrids, will account for up to 50 per cent of the total by 2030, five years later than projected in 2021. And he assured that the group's internal combustion engine technology will be upgraded for a long time to come. Bmw, on the other hand, has chosen a flexible strategy, hybrids and internal combustion, pending the transition to next-generation electrics (Neue Klasse). The Swedish (Chinese-owned) Volvo has also abandoned its goal of going fully electric by 2030, focusing on a greater mix with hybrid models.