Europe’s Electric Car Sales Face Slowdown Amidst Waiting Game for Better Models
Europe’s electric car sales, which have been experiencing rapid growth in recent years, are now entering a go-slow zone as drivers anticipate the arrival of better and cheaper models in the next two to three years. Despite a 47% increase in fully-electric sales in Europe during the first nine months of 2023, automakers such as Tesla, Volkswagen, and Mercedes-Benz are expressing concerns over high interest rates and a subdued market that is discouraging customers. The uncertainty surrounding the safety, range, and price of electric vehicles (EVs) is deterring potential buyers, leading them to wait for improved offerings in the near future.
Dealerships in Germany and Italy, along with research conducted by global data analysis firms, indicate that economic uncertainty is not the sole factor behind the slower adoption of EVs. Customers remain unconvinced that EVs meet their needs and are hesitant to make a purchase. Thomas Niedermayer, the head of a Bavarian car dealership, attributes the lack of sales to consumer uncertainty, as individuals anticipate technological advancements and prefer to wait for the next generation of EVs that would retain their value for a longer period.
Flavia Garcia and Tom Carvell from Edinburgh, Scotland, exemplify this trend. Despite the need to replace their 15-year-old Toyota Auris, the couple is deterred by issues such as the lack of charging infrastructure, concerns about battery life, and the relatively high price of EVs. According to AutoTrader, new EVs in Britain are still 33% more expensive on average than their fossil fuel counterparts. Furthermore, most new models targeting entry-level consumers will not be available until at least 2025, coinciding with the arrival of an expanded range of Chinese EV brands in Europe.
Philip Nothard from Cox Automotive, a dealer services firm, describes the current situation as the “valley of death” and predicts a period of low residual values, high supply, and low demand between 2024 and 2027. This cyclical problem can be attributed to the unavailability of affordable EV options in the market. While sales of EVs are increasing due to carmakers meeting pre-existing orders, the number of people intending to buy an EV has remained constant in Germany over the past year, according to The Langston Co’s poll.
The slowdown in EV sales is not isolated to Europe. U.S. automakers Ford and GM have also experienced the impact of weaker demand and higher costs, resulting in delays in launching cheaper EV models. Despite the current market conditions, automakers are urged to monitor the competitive landscape, with Alistair Bedwell from GlobalData emphasizing the importance of not falling behind Tesla and Chinese EV brands.
In conclusion, Europe’s electric car sales are facing a temporary downturn, driven by consumer uncertainty, limited charging infrastructure, and higher costs compared to traditional vehicles. While EV sales have grown, the waiting game for improved models and more competitive pricing has affected demand. This slowdown in sales should be viewed as a temporary phase as car manufacturers prepare for the next wave of affordable and technologically advanced EVs.