Uncertainties hover over the electric car market. The strong growth in sales could be halted next year.
Shaken by Covid and its consequences, including the shortage of semiconductors, the European automobile market remains convalescent. Certainly, sales are on an upward trend. Over the first ten months of the year, 8.8 million new vehicles were registered in the European Union, an increase of 16.7% compared to 2022. But we still remain far from the pre-Covid level.
And the automotive industry is already expecting a fairly average 2024. According to ACEA, the market is expected to remain weak in 2024. The manufacturers’ association estimates it at 10.7 million units, an increase of around 2.5% compared to 2023. In 2019, the on was at 15 million vehicles!
If the overall market is going to stand still, according to ACEA, this should not be the case for the electric car sector, already booming, whether in volume or market share. In terms of volumes, from January to October, more than 1.2 million electric cars were registered in the Union, an increase of 53% in one year. The market share increased from 10.7 to 14%. ACEA estimates that this share will approach 20% in 2024.
Clearly, from next year, one in five cars sold in Europe will already be electric. However, there are disparities between countries, some being well ahead (we obviously think of Norway), others still lagging behind. The overall increase in volumes in 2024 must notably pass through these lagging countries.
Because in more advanced countries, the prospect of a stabilization or even a slowdown in sales is mentioned. Moreover, in France, brands are already facing a decline in orders. This is explained by inflation which weighs on household budgets and does not help to sell cars, whatever the engine under the hood.
There is also the great vagueness that reigns over many regulations. For several months, the government has, for example, been talking about strengthening the bonus for some French people, enough to encourage them to wait. Drivers are also lost in the face of ZFEs, especially since the executive finally let go in mid-2023, which allowed metropolises to review their timetable for implementing restrictions. Drivers therefore postpone their purchase before seeing things more clearly.
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And this foggy period can ultimately drag on. 2024 is indeed shaping up to be a year of transition, for several reasons. The first is political. Carlos Tavares, the boss of Stellantis, drew attention to the fact that important elections will take place in 2024, with the renewal of the European parliament in June, then the American presidential election in November.
He believes that these electoral deadlines could lead to a drop in sales of electric cars. First, with the wait for the results of the votes, then perhaps with the arrival in power of people or political groups less favorable to rapid electrification of the markets. We think, for example, of the possible return of Donald Trump, who recently made the electric car a new target to be shot down.
The 2024 transition also concerns the vehicle supply. Customers are waiting for the arrival of cheaper models. Promised for years, they are starting to materialize. We are thinking, for example, of the launch of much less expensive city cars, such as the Citroën ë-C3, Fiat Panda and Renault R5, which will start at less than €25,000 excluding bonuses. The price war will also intensify in the higher segments. Renault has, for example, promised that the Scénic will start at less than €40,000, which will therefore lead to a drop in the prices of the Megane.
But all these models and price reductions will not materialize in January, they will arrive gradually throughout 2024! What therefore adds to this wait-and-see effect which hovers over the electric car market, and reinforces the idea that a slowdown in electric sales can take place, before a new takeoff in 2025, the one which will lead towards all electric.
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