Sales of electric cars are growing in Europe

Sales of electric cars are growing in Europe

Electric car sales accounted for 12.1% of new car sales in the European Union in 2022, according to the Manufacturers Association (ACEA). This market share is a record at a time when Europe wants to ban thermal cars by 2035. In addition, this progression of the electric car market in Europe comes in a depressed market encountering supply problems of semi- drivers, production and even transport to get the vehicles to the garages.

The results are significant. Sales of electrics rose 28% to more than 1.1 million units last year, driven by sales in Germany. They are also popular in Sweden and Belgium. But it’s in Norway that electric is breaking all records. Four out of five new cars (79%) run on electrons. In this concert, only the Italian market put a brake on this engine in 2022 (-26.9%).

Less spectacularly, non-rechargeable hybrid cars (diesel or petrol) also continue to conquer the market (+ 8.6%) and now represent 22.6% of sales, with 2,089,653 cars sold. Sales of rechargeable hybrids (equipped with a heat engine and a small rechargeable electric motor on a socket or terminal) marked time for the first time, with 874,182 vehicles sold (+ 1.2%). It is true that many users often “forget” to recharge.

The boost of public policies

In total, electrified cars (hybrid and 100% electric) have exceeded gasoline car sales since the end of 2021: these represented 36.4% of sales in 2022 (-12.8%, with nearly 3.3 million vehicles sold).

Several explanations are put forward to explain this growth of electric vehicles. Public policies continue strongly encourage electrification of the market through subsidies, traffic restrictions for increasingly taxed thermal cars. In addition, in a devastated automotive market, car manufacturers have also favored vehicles with high added value. However, electric cars remain on average much more expensive than their gasoline equivalents, at prices often higher than 35,000 euros (excluding subsidies). Still, a limit may have been reached, to such an extent that market leader Tesla was forced to cut prices sharply at the beginning of the year. The other manufacturers should arrive in the coming weeks with lower offers, but this will be to the detriment of the autonomy of the batteries in the vehicles.

Chinese manufacturers on the offensive

If Europeans are investing nearly 250 billion euros in the electrification of the range of their vehicles, several bosses of European manufacturers like Carlos Tavares are sounding the alarm. The American manufacturer Tesla is still the world’s largest seller in this category with 1.3 million units in 2022 with a 37% increase expected for 2023, to 1.8 million units. But this supremacy could soon be called into question with the arrival on the European market of several Chinese manufacturers with much cheaper models. Thus, BYD has almost tripled its sales of electric vehicles in 2022 to 900,000 units and intends to develop in Europe and North America. According to some forecasts, the Chinese could hold nearly 20% of the European market in the next ten years.

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