Europe car sales drop in December led by EV slump

BLOOMBERG

Europe’s automakers are bracing for slower growth this year after sales fell for the first time in 17 months in December on waning enthusiasm for electric vehicles.
New-vehicle registrations declined 3.8% to 1.05 million units last month, the European Automobile Manufacturers’ Association said. Sales slumped nearly a quarter in the region’s biggest market Germany after EV incentives ran out, weighing on growth in other key countries.
Elevated borrowing costs, a sluggish economy in parts of Europe and growing pessimism around EVs are clouding the industry’s outlook. Bloomberg Intelligence is predicting sales growth this year to slow to 5%, from 14% in 2023. This will likely depress car prices and squeeze returns for automakers, according to Bernstein analysts.
“Pent-up demand has started to fade,” the analysts led by Daniel Roeska said in a note this month.
Dealerships and manufacturers “will soon face the full force of sluggish demand.”
Tesla Inc slashed prices for its best-selling Model Y in markets including Germany, France and Norway.
The US carmaker is planning to temporarily halt production of the vehicle at its plant near Berlin, citing logistics issues sparked by the fighting in the Red Sea. Last month, Audi said it’s paring back its EV rollout.
The strong decline in Germany, where EV registrations nearly halved last month, outweighed growth in markets including the UK, Spain and France.
EV sales rose 28% last year in the region, but slumped by a quarter in December amid falling registrations for battery-powered cars also in Sweden, the Netherlands and Croatia.
The European Union recorded its first monthly drop in EV sales since April 2020, the height of the pandemic.