Tesla Motors has emerged as the leading seller of electric vehicles in China this year, shipping over 50,000 units to date. But, in Europe, registrations for the California company’s EVs plummeted 76% in July, as local government subsidies spur competition.
“The rise in demand for EVs [in Europe] is strongly related to a wider offer that is finally including more affordable choices. The higher competition amongst brands is also pushing down prices,” said Felipe Munoz, global analyst at auto industry analysts JATO Dynamics.
According to Jato’s latest report, demand for EVs increased 131% in Europe for the month of July, when compared to the same period last year, reaching a record-breaking high. Hybrid-engine vehicles (HEVs) saw the greatest demand surge, soaring 89% year-on-year, while fully electric vehicles accounted for 18% of registrations for new energy vehicles (NEVs)—a wide-ranging category that includes fully electric, plug-in and battery-electric vehicles, plus hydrogen-powered vehicles.
Tesla only scored 1,050 new registrations in the month. The waning demand can in part be explained by production issues at Tesla’s main factory in Fremont, which supplies Europe.
The EV giant’s China sales, meanwhile, are now largely supported by its giga factory in Shanghai, which explains how Tesla has raced ahead in China while slipping behind in the EU. But competition from traditional automaker is also rising in Europe.
According to Jato there are now 38 NEV models available across, compared to just 28 last year, buoyed by offerings from legacy brands like Peugeot, Skoda, and Mini. Meanwhile government subsidies, intended to support OEMs during the pandemic and help automakers hit new emission standards, have reduced costs of local production.
Matthias Schmidt, an independent auto analyst in Berlin, says registrations for NEVs in West Europe—a region covering 18 countries—have actually surpassed registrations in China so far this year. Europe saw over 500,000 new registrations in the first seven months, while China recorded just 486,000.
Yet despite the strong growth in EV registration, total passenger vehicle sales remain down across Europe, dropping 35% in the first seven months compared to the same period in 2019. The downturn does appear to be slowing, however, with sales dropping just 4% in July—the lowest monthly decline yet.
Munoz cautions that the unpredictable pandemic continues to pose a risk to future auto sales but—daring optimism—adds that “if the current situation continues to improve, we could start to talk about a ‘V’ shaped recovery in the European car industry.”
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