EV market in Europe faces challenges

The electric vehicle (EV) market in Europe witnessed a notable shift in July 2024, as registrations of battery electric vehicles (BEVs) slowed, and their market share declined. According to JATO Dynamics’ latest data, BEV registrations fell by 6% compared to the same month last year, with their market share dropping from 14.6% in July 2 023 to 13.5%.

This downturn comes at a time when the overall demand for vehicles in Europe increased by 2%, driven by a surge in SUV registrations.

Decline in BEV demand

In July 2024, approximately 139,300 new BEVs were registered across 28 European markets, marking a 6% decrease from July 2023. The decline in BEV registrations is significant, as it suggests growing consumer hesitation in adopting electric vehicles, despite the increasing availability of models.

“The lack of clarity around the incentives for – and future of – EVs continues to present a barrier to consumers considering an EV. These factors, alongside the low residual value of EVs contributed to the decline seen in July.”

BMW emerged as a surprising leader in the BEV market, surpassing Tesla for the first time. BMW saw a 35% year-on-year increase in its BEV registrations, while Tesla’s registrations dropped by 16%. BMW’s success can be attributed to the strong performance of its latest electric models, such as the iX1, i4, and i5, with the newly launched iX2 also making a notable impact. However, Tesla’s flagship models, the Model Y and Model 3, still dominate the year-to-date BEV rankings but have lost significant ground, with the Model Y falling to ninth place in July’s overall vehicle ranking.

SUV market: A new record

While the BEV market struggled, the SUV segment continued its relentless ascent, achieving its highest market share to date. In July 2024, SUVs accounted for 54% of all vehicle registrations in Europe, with 554,000 new units registered, marking a 6% increase from July 2023. This growth has brought the year-to-date volume of SUVs to 4.2 million units, a 5% increase from the previous year.

Volkswagen Group led the SUV market by volume, with 26% of all SUV registrations attributed to its brands, followed by Hyundai-Kia (12%) and Stellantis (11.5%). The demand was particularly strong for compact (C-SUV) and small (B-SUV) models, which saw increases of 3% and 14%, respectively. Despite the overall growth in the SUV segment, midsize SUVs (D-SUV) experienced a 7% decline in demand, reflecting a shift in consumer preferences toward more compact and affordable options.

Broader market trends: Rising demand and regional variations

The overall demand for vehicles in Europe rose by 2% in July 2024, with a total of 1.03 million units registered. This brings the year-to-date registrations to nearly 7.9 million units. The growth was driven by significant increases in markets such as Poland (+19%), Portugal (+27%), and Slovakia (+12%). In contrast, major markets like Germany and France saw a decline in registrations, with Germany experiencing a 2% drop and France a 2% decrease as well.

The rising demand for SUVs and the slowdown in BEV registrations highlight a broader shift in consumer preferences. As Felipe Munoz noted, “Consumers in Europe now have access to more choice than ever before, and SUVs are a more comfortable and desirable option for many. This alongside the increasing availability of affordable models is helping consumers to make the switch from traditional segments to SUVs.”

This trend poses a challenge for the EV market, which is struggling to maintain its momentum in the face of growing competition from other segments.