New car market in reverse gear

New car market in reverse gear

In Austria, a decline in new registrations of 2.0 percent was recorded, meaning sales were 22 percent lower than in the same month of 2019. But while the overall market is weakening, new registrations of electric cars are currently increasing significantly. The number of newly registered electric cars rose by 24 percent across the EU compared to the same month last year, and by 27 percent in Austria. The electric market share in the EU climbed from 12.0 percent in February 2024 to 15.4 percent and was therefore well above the average value for the whole of 2024 (13.6%). In Austria, the market share of electric cars increased from 16.6 to 21.6 percent. New electric vehicle registrations increased in 21 of the 27 EU countries - but only seven of the 27 countries recorded an overall growing new car market.

growth lull

However, Axel Preiss, Head of Advanced Manufacturing & Mobility at EY, expects the growth in new electric vehicle registrations to slow down in the coming months: "The current increase in new registrations of electric vehicles in the EU can be explained by several factors: In Germany, the largest market, sales of electric cars were at a very low level at the beginning of last year - after the abolition of the environmental bonus. Although this leads to large growth rates, these are expected to decrease significantly as the year progresses. In addition, the development of sales figures throughout the EU is heavily dependent on national or regional subsidies. If these are eliminated, sales will decrease significantly. In addition, the EU Commission plans to give manufacturers more time to achieve the emissions targets. As a result, drastic price reductions and tempting leasing offers will become less likely.

Problem moved

Preiss warns that car manufacturers should not succumb to the temptation to rely on an increase in demand for electric cars in the coming years: "It is to be expected that interest in electric cars will not increase to the extent necessary to meet the EU's requirements. The new regulation proposed by the EU Commission simply pushes the problem further back instead of achieving a sustainable solution." According to Preiss, the following still applies: "The demand and interest in electric vehicles is heavily dependent on government funding programs. The majority of consumers are still skeptical about electromobility. However, it is positive to note that some promising electric vehicles are coming onto the market this year. This could lead to an increase in demand, particularly in the commercial segment, for example for company cars." As in January, the electric pioneer Tesla was unable to benefit from the upward trend in electric cars in February. New Tesla registrations fell by 47 percent compared to the same month last year, and the share of the electric market fell from 21 to nine percent. The share of the overall market shrank from 2.5 to 1.4 percent. In Austria, Tesla sales fell by 70 percent, and in Germany by 76 percent.