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Strong west-east divide in electric cars

The recovery on the EU car market continues, new registrations of electric cars are growing rapidly. But the differences within the EU are massive: In the east and south-east of the EU, e-cars only play a minor role.

The EU new car market continued to grow strongly in May. According to the industry association ACEA, new registrations rose by 18.5 percent to almost one million units last month compared to the same month last year. It was the tenth plus in a row. Above all, the car markets in Italy, Germany and France picked up noticeably. But there is still a huge gap compared to the pre-crisis level: compared to May 2019, there is an EU-wide minus of 23 percent.

gap to pre-crisis level should get smaller

“Automakers are continuing to ramp up production, and the lack of parts is increasingly a thing of the past. The situation is normalizing and delivery times are continuing to fall,” says Peter Fuss, a partner at EY. “This enables manufacturers to work off the high order backlog.”

Fuss expects that the situation will steadily normalize over the course of the year: “We will not reach the pre-corona level, but by the end of the year the gap to the pre-crisis level should have narrowed significantly.”

E-cars are growing dynamically

Also noteworthy is the growth in new electrified cars, which has gained momentum in the past month: Sales of electric cars climbed by more than 70 percent year-on-year. Their share of new registrations increased by four percentage points to 13.8 percent.

The share of petrol engines was again the largest. Although their market share shrank slightly, at around 37 percent this was still the most popular type of vehicle.

Significant differences within the EU

“Electronics is now booming again – but mainly thanks to state subsidies,” explains EY expert Fuss. Markets with little or no support for EV purchases reported significantly below-average EV market shares.

In Sweden, for example, the market share for purely electric cars was 41 percent in May, in Finland 35 percent and in the Netherlands 33 percent. In contrast, e-cars in Croatia and Cyprus had a market share of just two percent. With a share of 17 percent, Germany ranks three percentage points above the EU-wide average.

Much still to be done for the EU by 2035

“If the ambitious EU plans for electromobility are to become reality and no more combustion engines will actually be registered from 2035, a lot still has to happen in many countries by then. We are currently making too slow progress,” complained Fuss. In just seven EU countries, more than 20 percent of new registrations are currently e-cars.

Meanwhile, China has extended some tax breaks for consumers buying new electric cars until 2027. Today’s decision follows a series of steps to boost sales and production in the world’s largest electric vehicle market. China’s trade ministry launched a campaign in mid-June to promote the introduction of electric cars, particularly in rural areas.

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