Global EV Sales Growth Slows, European Automakers Lose Ground Amid Plug-In Hybrid Surge

Global electric vehicle (EV) sales in July 2024 reached 853,000 units, representing a modest 6% year-on-year growth, according to Bank of America’s latest EV Tracker report. The lukewarm performance raises concerns about the sector’s ability to maintain its growth momentum, particularly as European automakers struggle to keep pace with competitors.

The report highlights a notable underperformance among key European brands, including Stellantis, Volkswagen, and Mercedes-Benz, all of which saw significant declines in market share. Stellantis’ share fell to 2.7% in July, down from 4.0% a year earlier. Volkswagen’s market share dropped to 6.6%, and Mercedes-Benz saw a dip to 1.9%, underscoring the difficulties faced by traditional European car manufacturers in the rapidly evolving EV landscape.

“Electric vehicle sales in Germany are suffering from a high comparison base from last year, when subsidies for company cars expired in September 2023,” noted Bank of America analysts.

While battery electric vehicle (BEV) sales saw slow growth, sales of plug-in hybrid electric vehicles (PHEVs) surged by 58%, driven primarily by strong demand in China. This shift reflects consumer concerns about the range limitations and higher costs associated with fully electric models, particularly in Europe.

BMW Bucks the Trend

Amid the challenges faced by European automakers, BMW defied the broader trend with strong growth in its EV market share. BMW’s electric vehicle sales rose by 40% year-on-year in July 2024, pushing its market share to 4.6%. The i4 and iX1 models, along with the newly launched i5, were cited as key drivers of this success.

Unlike some of its competitors, BMW’s decision to prioritize BEVs over PHEVs appears to be paying off, as it continues to capture a larger share of the market.

BYD Overtakes Tesla, Plug-In Hybrids Lead the Way

Chinese automaker BYD continued its ascent, overtaking Tesla to become the global EV leader with a 17.2% market share in July, up from 14.7% in 2023. However, while BYD’s BEV sales in China fell by 7%, its global plug-in hybrid sales surged by 62%, showcasing a shift in consumer preference.

Tesla, on the other hand, saw its global market share drop to 14%, down from 19.4% in the second quarter of 2023, with a particularly sharp decline in Europe due to rising prices for the Model 3 and import tariffs on vehicles manufactured in China.

Challenges for Europe’s EV Market

One of the key barriers to wider BEV adoption in Europe remains the higher total cost of ownership compared to internal combustion engine vehicles. Despite lower running costs, the high upfront prices and significant depreciation of BEVs have deterred many consumers. In Germany, for example, BEV prices remain 20% higher than traditional vehicles, even after subsidies.

Bank of America analysts have revised their forecast for European BEV sales, now predicting a 2% decline for 2024, highlighting the need for lower prices to drive adoption, regardless of regulatory pressures.