Europe’s electric vehicle (EV) market, once a frontrunner in the industry, is now experiencing a slowdown as consumers adopt a cautious approach, anticipating improved and more affordable models in the coming years. Although fully-electric sales saw a notable 47% surge in the first nine months of 2023, major automakers like Tesla, Volkswagen, and Mercedes-Benz are noticing a decrease in EV order intake compared to the previous year. Economic uncertainties are not the sole cause of this deceleration, as consumers express concerns regarding safety, range, and price of current EV models.
Thomas Niedermayer, head of a prominent Bavarian car dealership, points out that uncertainty is the primary obstacle. Many consumers believe that technological advancements will quickly render existing models obsolete, leading them to wait for the next generation of EVs instead of investing in a vehicle that may depreciate rapidly.
In the UK, consumers like Flavia Garcia and Tom Carvell are hesitant to replace their 15-year-old Toyota Auris with an EV due to concerns about charging infrastructure, battery longevity, and the still comparatively higher cost of EVs, which are 33% more expensive than traditional models. As a result, they are considering purchasing a hybrid vehicle instead.
While the majority of upcoming entry-level EVs are expected to hit the market no earlier than 2025, Europe will also see an influx of affordable Chinese EVs from manufacturers like BYD and Nio. This delay in new EV models aligns with a broader shift in the market, indicating a potential low-growth era for EV sales.
Experts suggest that the lack of affordable models is a key contributing factor to the slowdown. U.S. automakers are facing similar challenges, delaying the launch of cheaper EVs in response to weaker demand and increased costs. The industry needs to keep pace with Tesla and Chinese brands to remain competitive in the rapidly evolving EV landscape.
Consumer polls in Germany show a steady intention to purchase EVs over the past year, indicating that the increase in sales may be attributed to the industry overcoming supply chain bottlenecks rather than a surge in demand. Additionally, industry insiders warn of a potential “valley of death” from 2024 to 2027, characterized by low residual values, high supply, and low demand, posing further challenges to the EV market in the near future.
1. Why is Europe’s electric vehicle market experiencing a slowdown?
Consumers are holding off purchases, anticipating improved and more affordable EV models in the next few years. Concerns over safety, range, and price of current EVs also contribute to the cautious approach.
2. What are the primary obstacles for consumers considering EV purchases?
Consumers are uncertain about future technological advancements, fearing that current EV models will quickly become obsolete. Charging infrastructure, battery longevity, and the comparatively higher cost of EVs are also factors influencing their decision-making.
3. When can we expect more affordable EV models in the market?
Most entry-level EVs are not expected to be available until at least 2025. However, there will be an influx of affordable Chinese EVs from manufacturers like BYD and Nio in Europe.
4. Why are U.S. automakers delaying the launch of cheaper EV models?
U.S. automakers are facing weaker demand and increased costs, leading to a delay in the introduction of more affordable EVs.
5. What challenges does the EV market anticipate in the near future?
Experts warn of a potential “valley of death” from 2024 to 2027, characterized by low residual values, high supply, and low demand. This poses further challenges to the EV market.