Electric cars, growth in Europe slows: estimates revised downwards

In 2024, the global car market is expected to recover its pre-Covid volumes (+3% and 89 million vehicles expected) mainly thanks to China, first in terms of volumes (26 million vehicles in 2023, +6% compared to 2022) and the world's leading exporter. Meanwhile, however, the electric car in Europe is stepping on the brakes. Growth in sales share has flattened out in the main markets of the Old Continent. This is the result of the infra-annual update of the Global Automotive Outlook by AlixPartners, which confirms that demand is growing at lower rates than expected.

A minimal percentage increase can be seen in Germany, where it went from 17% to 18% between 2022 and last year. The slowdown is also evident in the UK (zero growth between 2022 and 2023), in France and even in Scandinavia (Denmark, Norway, Sweden), where double-digit growth between 2020 and 2022 has shrunk to +4%. In Italy, on the other hand, the share of battery-powered vehicles in new registrations has been stable at 4% since 2021. Hence, zero growth.

The red light is the degree of consumer interest. AlixPartners presented a survey showing that the percentage of customers oriented towards buying a Bev as their next car is declining everywhere except in China (rising from 73% to 97% between 2019 and 2024). In the US, it rose from 14% to 35% in 2021 but then stabilised. In Europe from 19% to 43%, but it was already at 42% three years ago. In Italy it even dropped from 53% to 48% between 2021 and 2024. What's more, for consumers the choice between Western or Chinese cars is decided on price, performance and style, factors in which Dragon cars are already very competitive.

"All the major manufacturers have an electrified range available, and a further $616 billion is expected to be invested by 2027, but at the same time the industry has taken a wait-and-see attitude due to weak Bev demand, still tied to incentives, and an uncertain outlook on the actual tightness of the regulation imposing a stop to thermal engines from 2035" in the EU, commented Dario Duse, Emea co-leader of the Automotive & Industrial team and Country Leader Italy of AlixPartners. According to Duse, 'the environmental sustainability of electric for Western manufacturers today is not yet reflected in terms of demand and economic and financial sustainability;

The consequences for the manufacturers are obvious: the Volkswagen brand, for example, has limited production on the ID line during 2023 at some production sites, Tesla had a sharp drop in production (8.5%) in the first quarter of 2024. The same is true for Polestar (owned by China's Geely), which is even assuming cuts of 15%;