Europe Sees a Significant Decline of 24.3 Percent in Volkswagen Electric Car Deliveries
The European market for electric vehicles (EVs) has experienced a notable decline, with Volkswagen reporting a drop of 24.3 percent in EV deliveries during the first quarter of 2024 compared to the same period last year. This decline is part of a larger trend, as global EV deliveries fell by 3.3 percent during the same period. In contrast, deliveries of combustion engine vehicles increased by 4 percent worldwide.
One of the main factors behind this decline in Europe is the ending of subsidies for EVs by governments in Germany and the United Kingdom. In December 2023, Germany saw a significant downturn in EV sales, with a decline of 47.6 percent. This decrease was largely attributed to the German government ending its subsidy program for electric vehicles a year earlier than expected. Similarly, in the United Kingdom, EV car registrations only grew by 3.8 percent in March 2024 compared to the same month last year, while overall car registrations jumped by 10.4 percent. This suggests that UK customers may be opting for petrol cars instead of EVs.
The decline in EV demand in the United Kingdom can be attributed to several factors, including the ending of government incentives. In 2020 and 2021, the UK government offered a £3,000 incentive for purchasing zero-emission cars, which was later halved in 2022 and completely ended in 2023. Additionally, UK Prime Minister Rishi Sunak delayed the proposed ban on the sale of new petrol and diesel vehicles from 2030 to 2035. These factors have contributed to a decrease in market share for EVs in the United Kingdom, with EVs making up only 16.5 percent of new vehicles sold in 2023, slightly lower than the previous year.
In the United States, there has also been a sluggish demand for EVs. A Gallup poll found that the percentage of Americans seriously considering buying an EV has fallen from 12 percent in 2023 to 9 percent this year. This decline can be attributed to the cost of EVs, as they are still significantly more expensive than petrol or diesel vehicles. The upfront cost of an EV is around 30-40 percent higher, deterring many first-time buyers from making the switch. In addition, concerns about charging infrastructure and the lower resale value of EVs compared to traditional vehicles have also contributed to the slower adoption of EVs in the United States.
This lack of confidence in EV profitability is reflected in a survey by KPMG, which found that auto executives in the United States and other countries were less optimistic about the profitability of EVs compared to the previous year. The report highlighted concerns about managing the transition to EVs and preserving or increasing profits.
Overall, the decline in EV deliveries in Europe and the United States can be attributed to a combination of factors, including the ending of government subsidies, higher upfront costs, concerns about charging infrastructure, and lower resale value. These challenges highlight the need for continued investment and support from governments and automakers to accelerate the adoption of EVs and overcome these barriers. Despite the current decline, the long-term outlook for EVs remains positive, as advancements in technology and infrastructure continue to make them a more viable and sustainable transportation option.
