European Car Sales Stagnate As EV Demand Drops In Germany

July saw essentially flat auto sales throughout Europe as the largest auto market in the region, Germany, saw a further decline in the demand for electric vehicles.
The European Automobile Manufacturers’ Association said that last month's 1.03 million new car registrations represented a mere 0.4% increase over the same month last year.

Although battery-electric car sales rose in France and the UK, they were not sufficient to counteract a 37% decline in Germany. In Europe, EV sales have been declining for several months, partly as a result of governments reducing their financial incentives for buying battery-powered vehicles.

Last month saw the largest decline of registrations for battery electric vehicles (BEVs) since December 2023. The numbers dropped by 37% to 30,762 cars in July 2024 compared to the same month in 2023.
Sales of Tesla Inc. have been declining throughout the region; in July, they fell by 15%. Over the first seven months of the year, sales decreased by 12%.
According to Bloomberg Intelligence analysts Gillian Davis and Mike Dean, the growth in BEV registrations could continue to be sluggish given the lack of incentives and consumer interest beyond first adopters.
Trade tensions with China complicate the outlook for the European EV market.The European Union has raised tariffs on electric vehicles imported from China, prompting a rebuke from Beijing, which regards the EU as a vital and expanding market for its auto industry.
These tariffs are scheduled to go into effect in November.
On top of that, major carmakers are reducing and delaying their plans to phase out internal combustion engines due to the drop in demand.
Volkswagen AG for example is looking for more significant cost reductions than just closing an Audi EV plant close to Brussels. The second-biggest manufacturer in the region, Stellantis NV, saw its net income nearly halve in the first half of the year, prompting the CEO to put the company's underperforming brands on notice.

Mercedes-Benz Group AG has backed off of medium-term goals for EV sales and reduced its forecast for margin this year, citing the longer than anticipated transition from combustion cars.