Sales of new battery-electric cars in the European Union dropped 12% in May compared to the previous year, with a notable 30% decrease in Germany, according to data from Europe’s auto industry body, the European Automobile Manufacturers Association (ACEA), on Thursday.
Germany, the EU’s largest market for electric vehicles (EVs), ended subsidies for EV purchases early in December as part of a last-minute 2024 budget deal.
Consequently, Germany has experienced a 16% decline in EV sales year-to-date, per the ACEA.
Overall, new car sales in the EU fell by 3% in May from the same month in 2023, marking the second decline this year.
When considering the broader region, including the EU, Britain, and the European Free Trade Association (EFTA), the drop was 2.6%, the ACEA reported.
Demand for EVs in Europe has slowed in recent months after years of strong growth, amid increased competition to produce more affordable models.
To protect local automakers from an influx of inexpensive EV imports, the European Commission announced last week that it would impose provisional duties of up to 38.1% on China-made EVs starting in July.
Tesla (TSLA.O) mentioned last week that it plans to raise the price of its China-made Model 3 once the EU tariffs take effect.
The company, led by Elon Musk, saw a 34.2% drop in May sales within the EU.
The current stagnation in the EV market has been anticipated for years, but sales are expected to rebound from 2025 when the next EU car emission targets are implemented, according to a briefing by the European campaign group Transport & Environment (T&E) on Thursday.
Electrified vehicles, including fully electric models, plug-in hybrids, and full hybrids, made up 48.9% of all new EU passenger car registrations in May, an increase from 46.2% a year earlier.
The market share of fully electric cars decreased to 12.5% from 13.8% in May 2023, while the share of hybrids rose to 29.9% from 25%.
In terms of overall EU registrations, Volkswagen (VOWG_p.DE) saw a 1.6% increase in May.
Conversely, Stellantis (STLAM.MI) and Renault (RENA.PA) experienced declines of 6.9% and 5.4%, respectively. Toyota (7203.T) reported a 13% rise in sales, the data showed.