New car registrations in Europe rose for the fifth straight month in November, putting the region on track for a fourth straight year of growth led by electrified models. According to data released by the European Automobile Manufacturers Association, buyers registered 2.4 percent more vehicles compared to the previous year, with total sales of 1.08 million vehicles in the month.
Electric vehicles as a driver of growth
Among the largest markets, Spain and Germany recorded the highest growth, while Italy stagnated. France and the United Kingdom recorded a slight decline. Sales of all-electric vehicles jumped 37 percent, outpacing plug-in hybrid growth of 34 percent, for the first time since March. Demand is strongly stimulated by new, more affordable battery models such as Citroën ë-C3 and Renault 5 E-Tech. This growth successfully offset the decline in gasoline vehicle registrations across the region.
Manufacturers such as Volkswagen, BYD and Renault have increased their market share in the electric vehicle segment at the expense of Tesla, BMW and Mercedes. Manufacturers of mass models are expanding their offer of more affordable vehicles. After the popular city car 5 E-Tech, Renault will start selling the electric Twingo next year, the price of which will be less than €20,000.
Challenges and an uncertain future
The long-term outlook for sales of electric vehicles in Europe is changing after the European Commission proposed to lift the effective ban on sales of new cars with internal combustion engines from 2035. The plans still have to clear several hurdles before the new fleet CO2 reduction targets are finalised. Several EU member states have already signaled that they will push for further changes, particularly regarding the treatment of plug-in hybrids and compliance mechanisms.
Planned government incentives for sales of electric vehicles in Germany and Spain are expected to have a positive impact in the coming year. There are also brighter spots for the region’s economy, with consumers expected to fuel growth at a time when global trade tensions are hurting exports. Last week, European Central Bank officials raised growth forecasts for the next two years.
However, while this brings relief to the automotive industry, demand across Europe has not yet recovered to pre-pandemic levels. Prices are rising, and buyers are delaying purchases due to a jump in the cost of living.