Volkswagen Electric Car Deliveries Plummet 24.3 Percent in Europe

A new Volkswagen ID.3 electric car in a fully automatic high-bay-rack for delivery by the German automaker at the 'Autostadt' in Wolfsburg, Germany, on Sept. 11, 2020. (Annegret Hilse/Reuters)

Deliveries of Volkswagen electric vehicles dropped by almost a quarter in Europe as the region saw an overall decline in EV sales, with governments in Germany and the United Kingdom ending subsidies.

The Volkswagen Group reported on April 10 that EV deliveries fell 24.3 percent in Europe during the first quarter of 2024 compared to the year-ago period. The company’s deliveries in the United States dipped 16.2 percent. Overall, worldwide electric vehicle deliveries declined 3.3 percent during this period. Meanwhile, deliveries of combustion engine vehicles ticked up globally by 4 percent.

According to a January press release from the European Automobile Manufacturers’ Association (ACEA), the sales of new EVs “declined for the first time since April 2020” in December 2023, dropping by 16.9 percent.

A key factor behind the drop was attributed to a “significant downturn” in Germany, the largest market for EVs in Europe, where sales tanked 47.6 percent that month. In December, the German government ended its subsidy program for electric vehicles, a year earlier than expected.

In the United Kingdom, EV car registrations only grew by 3.8 percent in March 2024 compared to the same month last year, a far slower increase than the overall car registrations that jumped 10.4 percent, according to data from the Society of Motor Manufacturers and Traders (SMMT).

Registrations of petrol cars increased by 9.2 percent last month. The data suggests UK customers may increasingly be moving away from EV cars, opting for the petrol variants instead.

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The share of electric cars in the total car market dipped to 15.2 percent in March 2024 as against 16.2 percent in March 2023.

Moreover, the growth of EV car registrations in the United Kingdom was largely driven by businesses. Private consumers made up 40.4 percent of total EV buyers last month, down from 48.4 percent.

Looking at the entire first quarter of 2024, while EV market share has largely remained stable, numbers show that the portion of private consumers among electric car buyers dipped during this period as well.

UK EV Decline

The decline in EV demand in the United Kingdom could be attributed to many factors, including the ending of government incentives.

In 2020 and 2021, the UK government offered £3,000 (approximately $3,742) as an incentive under a purchase scheme if a person bought a zero-emission car. In 2022, this incentive was halved. A year later in 2023, the government ended the program.

In addition, UK Prime Minister Rishi Sunak delayed a proposed ban on the sale of new petrol and diesel vehicles in the United Kingdom. Earlier, the deadline was set for 2030. The prime minister pushed it back by five years to 2035.

According to a Jan. 9 post by business consultancy Green Economy, EVs made 16.5 percent of new vehicles sold in the United Kingdom in 2023, a slight drop from 16.6 percent in 2022.

This made 2023 the first year in which EVs failed to gain market share since 2018.

“Just one in 11 private consumers last year chose an EV,” said Mike Hawes, head of the Society of Motor Manufacturers and Traders (SMMT).

“When it comes to market share, we have fallen behind partly because there aren’t incentives for the private buyers that other countries have.”

Green Economy pointed out that the upfront cost of an EV is around 30–40 percent higher than their petrol or diesel counterparts, which is “deterring many first-time buyers from making the switch.”

US Sluggish Demand

A poll published by Gallup on April 8 found that the percentage of Americans “seriously considering” buying an EV has fallen from 12 percent in 2023 to 9 percent this year.

During this period, Americans who “might consider” buying an EV in the future dipped from 43 percent to 35. Meanwhile, those who said they “would not buy” an EV rose from 41 percent to 48 percent.

In a Nov. 13 post, the World Economic Forum (WEF) cited a report by Ernst & Young to state that “even with subsidies, cost is still one of the biggest barriers to mass market adoption” of EVs.

“While range anxiety may not be as worrisome to buyers due to improved battery technology, the lag in building out charging infrastructure continues to affect the market,” it said.

While speaking to The Epoch Times, James Haas, used-car manager at Berge Toyota in Mesa, Arizona, also agreed that EVs continue to be costly to manufacture and maintain.

At an average price tag of $40,000, most people cannot afford to buy these vehicles, he said, adding that EVs do not hold their value like gasoline vehicles.

A January survey published by KPMG that polled 1,000 auto executives from 30 nations found that confidence in electric vehicles among automakers in the United States and other countries had dipped as many were concerned that their large bets on EVs may take longer to pay off.

The share of executives saying they were “extremely confident” about profitability dropped to 43 percent in 2023 from 48 percent in 2022 in the United States. The same metric fell by seven percentage points in Western Europe and a massive 22 points in Japan.

“Just a year ago, executives were excited about the prospects for transforming the industry with new kinds of cars. Now, they remain optimistic, but they are more sober about how difficult it will be to manage the transition and preserve or increase profits,” the report stated.