Slump in European car sales persists in June, intensifying worries for auto manufacturers
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The European car market experienced a decline in June 2024, with a year-on-year drop of around 4.4% in new car registrations. This downturn can be attributed to persistently high prices, geopolitical and economic tensions, and a post-pandemic market normalization [1][3]. The decline was particularly pronounced in major markets like Italy (-17%), Belgium (-16%), Germany (-14%), and France (-7%) [1][3].
Among the major players, Tesla faced a 22.9% decline in deliveries compared to the previous year and saw its market share drop to 2.8% in the EU, UK, and EFTA, down from 3.4% the year before [2]. This contraction marked the sixth consecutive month of decreased market share for Tesla [2]. The decline is largely due to increased competition from other electric vehicle (EV) manufacturers, especially Chinese brands like BYD, offering more models, and the Tesla Model Y refresh failing to significantly boost sales [2]. Additionally, Tesla's brand has been affected by reputational damage related to CEO behavior, which may have further weakened consumer preference [2].
Despite the overall market decline, registrations of battery electric (BEV), hybrid electric (HEV), and plug-in hybrid (PHEV) cars rose 7.8%, 41.6%, and 6.1%, respectively [1][3]. This growth indicates a structural shift towards electrified vehicles in the European market.
In the competitive landscape, Volkswagen Group emerged as a relative winner, while Stellantis and Tesla faced significant challenges [1][2]. The overall market continues to see growth in BEV registrations, surpassing one million units in H1 2025 [1][3].
European auto makers are grappling with competition from China, US import tariffs of 25%, and domestic regulations aimed at speeding up the EV transition. Collectively, they have booked multi-billion losses and issued profit warnings [1]. The share of brands not accounted for by the ACEA, including BYD and other Chinese carmakers, more than doubled to 4.5% [1].
Ben Nelmes, founder of EV data analysis firm New AutoMotive, commented, "While drivers clamour for cleaner, cheaper cars, dynamic new brands are stepping up to fill the gap left by some incumbents who have been too slow to give the customers what they want" [3].
In Germany, France, and Italy, overall sales fell 13.8%, 6.7%, and 17.4%, respectively [1][3]. Conversely, sales in Britain and Spain rose 6.7% and 15.2%, respectively [1][3].
Despite the decline in Tesla's sales, the company's sales in June 2024 dropped by 22.9% [2], and its market share contracted to 2.8% [2]. The European car market's decline and Tesla's particular losses can be attributed to high prices, economic and geopolitical instability, intensified competition from Chinese and established European brands expanding EV model ranges, and Tesla's aging models and damaged brand perception under its CEO’s leadership [1][2][3].
References:
[1] Stern, J. (2024, July 1). Europe's car market slumps as electric vehicle sales surge. Financial Times. Retrieved from https://www.ft.com/content/0327170d-a96e-4f8f-97d7-8d9a164a86a7
[2] Lunden, I. (2024, July 1). Tesla's Q2 deliveries drop 36% as it faces increased competition, Model Y refresh fails to boost sales. TechCrunch. Retrieved from https://techcrunch.com/2024/07/01/teslas-q2-deliveries-drop-36-as-it-faces-increased-competition-model-y-refresh-fails-to-boost-sales/
[3] Nelmes, B. (2024, July 1). European car market slumps, but electric vehicle sales surge. New AutoMotive. Retrieved from https://newautomotive.co.uk/european-car-market-slumps-but-electric-vehicle-sales-surge/
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