Despite a 3.3 percent decline in global electric vehicle (EV) deliveries, combustion engine vehicle deliveries increased by 4 percent, according to reports. In Europe, Volkswagen electric vehicle deliveries dropped by nearly a quarter as the region experienced an overall decline in EV sales due to the discontinuation of subsidies in Germany and the United Kingdom.
During the first quarter of 2024, the Volkswagen Group reported a 24.3 percent decrease in EV deliveries in Europe compared to the previous year, with a 16.2 percent dip in deliveries in the United States. Worldwide, EV deliveries declined by 3.3 percent during this period, while combustion engine vehicle deliveries saw a global increase of 4 percent.
The European Automobile Manufacturers’ Association (ACEA) noted a 16.9 percent drop in new EV sales in December 2023, marking the first decline since April 2020. Germany, the largest market for EVs in Europe, experienced a significant 47.6 percent decrease in sales that month following the end of the government’s subsidy program for electric vehicles.
In the United Kingdom, EV car registrations only grew by 3.8 percent in March 2024 compared to the same month the previous year, a slower rate than the 10.4 percent increase in overall car registrations. The data indicates a potential shift away from EVs towards petrol cars among UK customers.
Overall, the share of electric cars in the total car market decreased to 15.2 percent in March 2024 from 16.2 percent in March 2023. The growth in EV car registrations in the UK was primarily driven by businesses, with private consumers accounting for a smaller percentage of total EV buyers compared to the previous year.
Factors Affecting EV Demand
The decline in EV demand in the UK can be attributed to various factors, including the discontinuation of government incentives. The UK government reduced incentives for zero-emission car purchases from ÂŁ3,000 to ÂŁ1,500 in 2022 before ending the program in 2023. Additionally, Prime Minister Rishi Sunak postponed the ban on petrol and diesel vehicle sales from 2030 to 2035.
Business consultancy Green Economy reported that EVs accounted for 16.5 percent of new vehicle sales in the UK in 2023, slightly lower than the 16.6 percent share in 2022. This marked the first year since 2018 that EVs failed to increase their market share.
According to Mike Hawes, head of the Society of Motor Manufacturers and Traders (SMMT), the lack of incentives for private buyers in the UK has contributed to the decline in EV market share. The higher upfront cost of EVs compared to petrol or diesel vehicles is also a deterrent for many first-time buyers.
Challenges in the US Market
A Gallup poll revealed a decrease in the percentage of Americans considering buying an EV, with concerns about cost and charging infrastructure cited as barriers to mass adoption. Despite subsidies, the cost of EVs remains a significant factor for consumers, leading to sluggish demand in the US market.
Auto executives in the US and other countries expressed less confidence in the profitability of EVs, with concerns about the long-term payoff of investments in electric vehicles. The industry faces challenges in managing the transition to EVs while maintaining or increasing profits, according to a report by KPMG.
In conclusion, the global automotive industry continues to navigate the evolving landscape of electric vehicles, with varying trends in different markets shaping the future of sustainable transportation.
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