Are fears of a slowdown in Europe’s BEV demand justified?
Last year Europe’s Passenger Vehicle (PV) BEV market grew 32% with positive growth in all months apart from December, which was off a very high base in December 2022. The growth achieved was better than many forecasters indicated at the start of last year (and better than in 2022), with some expecting growth to be flat. BEV sales volume came in at just under 2.1 million units which is half a million more than were sold in 2022.
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However, it is clear there has been some recent slowdown in the market for BEVS, but it depends where you look. Some brands are doing considerably better than others, with the likes of MG and Tesla standing out as strong performers in 2023.
The chart below illustrates just how rapidly the electric car market in Europe has grown in recent years – volume and share. However, the talk in the industry is of the supply-side factors (especially battery making capacity/costs) and demand-side factors (consumer hesitancy, charging network constraints, still-high purchase prices) that could constrain future BEV growth or, well, cause a signifcant pause. The early adopters may well have been relatively straightforward compared with the next phase.
It’s a little bit chicken and egg. As the volumes for BEVs rise much higher, unit costs om major components and indeed, the vehicles themselves, naturally fall, creating room for lower price-points that, in turn, stimulate higher sales. It will happen, but getting there is no walk in the park. Despite recent BEV sales growth, the products still come with relatively high price tags and are stubbornly difficult for volume players to make a profit on. Which is where incentives to kick-start the market for the good of all can be a good idea. Just ask the Chinese…
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More: Fears over a slowdown in Europe’s BEV demand are growing
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