Market Analysis

EV Growth Offsets Combustion Engine Decline in March European Car Sales

Mellissa · 24 Apr33.3K Views

Image Credit: Reuters

New car sales in Europe saw a 2.8% increase in March, driven by strong growth in Britain and Spain. The rise was largely attributed to a surge in electric vehicle (EV) registrations, which compensated for declines in petrol and diesel car sales.

According to the European Automobile Manufacturers Association (ACEA), fully electric vehicle sales jumped 23.6% in March.

Why It Matters: European carmakers are facing challenges from high production costs, competition from China, and U.S. President Donald Trump's 25% tariffs on car imports, all of which are adding uncertainty to the industry’s future. The 145% import taxes on Chinese cars, combined with retaliatory tariffs from Beijing, have further dampened global growth projections, creating additional risks for automotive companies.

By The Numbers: In March, sales across the European Union (EU), Britain, and the European Free Trade Association (EFTA) reached 1.42 million cars, reversing two months of declines, according to ACEA data. Volkswagen and Renault saw increases of 10.3% and 13.0%, respectively, while Stellantis experienced a 5.9% drop.

Tesla’s sales fell by 28.2% year-on-year, marking its third consecutive monthly decline, and its market share decreased to 2% from 2.9% a year ago. In the EU, overall car sales fell 0.2% year-on-year, marking a third consecutive month of decline, although sales of battery electric (BEV), hybrid electric (HEV), and plug-in hybrid (PHEV) vehicles grew by 17.1%, 23.9%, and 12.4%, respectively.

Electrified vehicles (BEV, HEV, and PHEV) accounted for 59.2% of car registrations in the EU in March, up from 49.1% in the previous year.

Market Trends: Among the EU’s largest markets, Spain and Italy saw increases in car sales of 23.2% and 6.3%, respectively. However, sales in France and Germany declined by 14.5% and 3.9%. In Britain, car registrations rose by 12.4%.

Context: Experts attribute the growing demand for electric cars in Europe to new EU emissions regulations and the availability of more affordable EV models. However, the EU has recently proposed relaxing some of these emission targets.