New car sales in the European Union experienced a dramatic decline in August, dropping 18.3% to reach their lowest level in three years, according to data released by the European Automobile Manufacturers Association (ACEA) on Thursday. The downturn was particularly pronounced in major markets, including Germany, France, and Italy, which all reported double-digit losses.
Fully electric vehicle (EV) sales plummeted 43.9% in August, marking the fourth consecutive month of declines. Germany and France, two of the bloc’s largest EV markets, saw staggering decreases of 68.8% and 33.1%, respectively. This decline underscores a significant slowdown in the growth of electric vehicles across the region.
The current state of car sales highlights a broader issue, with figures falling well below pre-COVID-19 levels. Major automakers, including Volkswagen, have cautioned that this trend may persist in the near future. The slowing growth of EV sales has been attributed to varying policies on green incentives among EU nations, compounded by the introduction of tariffs aimed at curbing the influx of affordable Chinese electric vehicles.
In August, registrations of battery electric vehicles fell by 43.9%, while plug-in hybrids dropped 22.3%. Conversely, hybrid electric vehicle sales rose by 6.6%, capturing a market share of 31.3%. The three largest car manufacturers in Europe—Volkswagen, Stellantis, and Renault—reported declines in sales of 14.8%, 29.5%, and 13.9%, respectively. Meanwhile, Tesla’s sales fell by 43.2%, and China’s SAIC Motor saw a 27.5% drop.
In response to the declining EV market, Germany has implemented tax deductions of up to 40% for companies on electric vehicle sales, following the termination of a subsidy program last year. However, a campaign group, Transport & Environment, predicts that battery-electric cars will only achieve a market share of 20% to 24% by 2025, largely due to competitive pricing pressures.