Electric vehicle sales in Europe appear to be entering a period of slowdown as customers wait for more affordable models.
After years of rapid growth, electric vehicle sales in the old continent may follow a downward trend as consumers want to wait for better and cheaper models in the next 2-3 years.
In fact, pure electric vehicle sales in Europe increased by 47% in the first nine months of the year, but instead of celebrating, companies like Tesla, Volkswagen and Mercedes let out a low note.
High interest rates and a not very exciting market are helping to push customers away. The warning can be clearly seen through Volkswagen’s electric car orders, which are only half compared to 2022.
Volkswagen electric car model at a charging station in Europe. Photo: Pod Point
Dealers in Germany and Italy, as well as research conducted by four global data analysis firms, all point to many reasons for the slowdown other than just economic instability, as customers do not are convinced that electric vehicles meet their needs in terms of safety, travel as well as price.
“The main problem is uncertainty,” said Thomas Niedermayer, head of a family-owned car dealership in Germany for 45 years, adding that many people realize technology will improve and Maybe you should wait 3 years for the next model instead of buying a car now that will quickly lose value.
We can take the example of Flavia Garcia and Tom Carvell in Edinburgh, Scotland. Their 15-year-old Toyota Auris, nicknamed Martina, needed to be replaced. With a ban on gasoline and diesel cars in the coming years, the couple may have considered an electric car, but then abandoned the idea due to the lack of a charging system and concerns about battery life and the price of the car.
AutoTrader says that electric cars in the UK are still on average 33% more expensive than fossil fuel models. Most of the new car models that are in production planning and aimed at low-cost customers will not appear on the market before 2025. That is also the time when China’s electric car series, including from BYD to Nio will be available in Europe.
“You want to do the right thing for the environment, but that’s like making a big investment and making life more complicated. We’ll probably buy a hybrid car first,” said Garcia, a director media, said.
Critics have long warned that the lack of affordable electric vehicles could hurt sales growth. Poor business results in September, surveys of customer sentiment as well as gloomy comments from automakers and dealers all indicate that a period of slowing growth may be approaching.
American car companies – names that are late in the trend of shifting to electric cars – are also facing difficulties. Ford and General Motors (GM) recently said they were postponing the launch of lower-priced models and holding back spending due to falling demand and higher costs due to new contracts with union workers. American Auto (UAW).
But the problem is a closed cycle. Demand will stay low as long as cheaper electric vehicles are not available, according to Felipe Munoz from Jato Dynamics.
The brands mentioned above will not launch new products immediately, because they can focus on profits. However, they still need to keep an eye on Tesla as well as Chinese brands because they don’t want to fall too far behind, according to Alistair Bedwell from GlobalData.
According to a poll by consumer research firm The Langston, although the number of electric cars sold is increasing, the number of people wanting to buy an electric car is not proportional.
Rising sales may simply be a signal that automakers are making efforts to produce electric vehicles as supply chain bottlenecks are finally removed, rather than a signal of rising demand.
In addition, low residual values also cause buyers to cancel their decision to buy electric cars, and many people often choose to buy a new car based on what they can get back after a few years of use.
“We can call it the valley of death – something we will experience in 2024-2027: low residual values, high supply, and low demand,” said Philip Nothard, director of services dealership at Cox Automotive.