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The European new car market continued to experience difficult times in the first half of the year. The latest data published by JATO Dynamics shows new car registrations fell 14 percent compared to the same period in 2021 to reach 5.54 million units in 27 European countries. This is different from the positive change recorded in China (+3.4 percent) but better than the results obtained in the United States, where the market collapsed by 18.2 percent.
Among the safe-haven assets that have avoided further declines are SUVs and electric cars. The former recorded a modest decline of just 4 percent and represented nearly 50 percent of volume. The latter was much better, with registrations increasing from 485,000 units in the first half of 2021 to 633,200 units in the first half of 2022, an increase of 31 percent. That is, battery electric vehicles (BEVs) now represent 11.4 percent of the total market, nearly four points higher than the market share of the previous year.
Tesla’s Growth Slows
The rise in BEV demand is not benefiting all automakers equally. Tesla, for example, was unable to capitalize on this growth, and while it has registered more cars than ever before, its growth lags behind the market as a whole. Faced with new car availability issues due to production shutdowns at its Chinese factories, the Californian company saw its BEV market share decline from 13.75 percent in the first half of 2021 to 13.33 percent in the first half of 2022.
The 0.42 point loss put Tesla third among the carmakers in Europe with the biggest decline in market share in the period. Volkswagen group led with a drop of 5.7 points, followed by Nissan with 1.4 points. Tesla was particularly hard hit by a massive drop in Model 3 registrations in June – down 76 percent. This month is usually very strong in terms of volume.
As the brand moves towards full use of its new factory in Berlin, it still relies on products sourced from its factories overseas. However, there are other reasons for the slowdown in growth in Europe.
More Competition Than Ever
The Model 3 faces increasing competition not only outside, but also domestically. The BMW i4 and Polestar 2 are two direct rivals that continued to strengthen in June. Also, as is the case in the US and China, the Tesla Model Y has become a serious and more attractive alternative. In fact, the Model Y was the most registered electric vehicle in Europe in the first six months of the year.
The race for electrification involves almost every brand available in Europe. The BMW Group, for example, is the fastest growing manufacturer in this segment, with its market share rising from 5.76 percent in the first half of 2021 to 8.37 percent a year later. The latest products such as the iX, iX3, and i4, received a positive response from the public.
The Hyundai Group is also growing faster than its competitors thanks to the strong results obtained by the Hyundai Ioniq 5 and Kia EV6, in addition to the well-positioned Hyundai Kona and Kia Niro. Hyundai has correctly positioned itself as a serious electric vehicle manufacturer with attractive products and competitive prices. Stellantis also won during this period. This consolidates its position as the second seller of BEVs in Europe, behind only the Volkswagen Group.
This was made possible thanks to the excellent results of the Fiat 500 electric, the third most registered pure electric car in Europe in that period. It seems that the iconic Fiat is repeating the success of its combustion version: attractive design, ease of driving and economical maintenance.
The article’s author, Felipe Munoz, is a JATO dynamics Automotive Industry Specialist.
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