Slowing European market leads to decline in Volkswagen electric vehicle sales
Volkswagen, the German automobile giant, has seen a significant increase in electric vehicle (EV) orders across Western Europe, reaching 160,000 units in early April. This marks a doubling of incoming orders compared to the same period last year. However, the European market is facing challenges that may slow down the growth of BEV sales in the coming years, according to industry analysts.
GlobalData expects the growth in BEV sales to continue in 2024, but factors such as reduced subsidies, supply shortages, and high interest rates may cause slower growth. One of the most significant changes came from Germany, where the government stopped subsidising EV purchases in December. This decision, which marked a significant shift in its previous promotion policy, has led to a drop in EV sales across Europe and raised doubts about achieving the target of 15 million EVs on German roads by 2030.
The European EV market share shrank from 14.16% in 2023 to 12% in 2024. Less than 30% of Europeans intend to buy an EV, while more than half are not willing to pay over €35,000 for an EV. These factors, combined with the end of subsidies, have contributed to the decline in EV sales across Europe.
Despite the challenges in Europe, Volkswagen Group's EV sales worldwide continue to grow. The company delivered over 2.1 million vehicles worldwide in Q1 2024, up 3.1% year-on-year. Volkswagen's BEV sales in other regions were 7,800 units in Q1 2024, an increase of 41% compared to the previous year. However, Volkswagen's BEV sales in the US were 13,200 units in Q1 2024, a decrease of 16% compared to the previous year.
Volkswagen's BEV sales in Europe were 74,400 units in Q1 2024, a decrease of 24.3% compared to the previous year. Despite the decline, Volkswagen is planning to release new BEV models in 2024, including the Volkswagen ID 7 Toure and Volkswagen ID. Buzz with a long wheelbase.
The total BEV sales for Volkswagen worldwide were 136,400 units in Q1 2024, a decrease of 3.3% compared to the previous year. However, Volkswagen Group EV sales stayed at 136,400, down 3.3% year-on-year.
The slowing sales in Europe and the US are expected to benefit China, which has a strong influence in the European market due to strong government incentives for EV makers. ACEA predicts that China will continue to dominate the global EV market in the coming years.
However, ACEA states that EV makers cannot fulfil the continent's transition alone and a fully-fledged industrial plan is deemed necessary. The European Commission has proposed a plan to boost EV sales, including setting a target for 30 million zero-emission vehicles on European roads by 2030, and providing financial incentives for EV purchases.
Despite the challenges, Volkswagen remains optimistic about the future of EV sales. The company's top-selling BEV models in Q1 2024 include the Volkswagen ID.4/ID.5, ID.3, Audi Q4 e-tron, Skoda Enyaq iV, and Audi Q8 e-tron. With new models on the horizon, Volkswagen aims to increase its EV sales in the following quarters and develop a long-term strategy for the European transition to electric vehicles.
In conclusion, while Volkswagen's EV sales are on the rise globally, the European market is facing challenges that may slow down the growth of BEV sales. However, with new models on the horizon and a proposed plan from the European Commission, there is hope for a successful transition to electric vehicles in Europe.
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