European car sales dip in January, combustion engine decline offsets EV growth

European new car sales declined by 2.1% in January based on ACEA statistics that confirmed an electric and hybrid vehicle registration increase could not offset the major decrease in petrol and diesel car purchases. The major European markets of France, Italy, Germany and UK demonstrated reduced overall sales statistics throughout the year. Spain emerged as unique because it happened to register higher market volume than every other significant region.

The European automotive sector faces a grave situation right now because Chinese manufacturers create stiff competition and potential U.S. trade restrictions loom over the industry. The EU executive will present its automobile sector blueprint to the public on March 5th after exchanging ideas with various industry representatives.

Also Read | EU's tariffs on Chinese electric vehicles ignite tensions with Beijing

European automobile manufacturers plead with the European Commission for emission penalty exemption regarding the January-started CO2 emission targets. Manufacturers who hike gasoline engine costs to boost EV market penetration might lose all interest from potential buyers due to this approach.

Electric transport interests reject any weakening of targets because it would obstruct EV infrastructure development and reduce EU industrial leadership.

The numbers for automobile sales in January throughout the EU, UK, and European Free Trade Area (EFTA) space dropped under 1 million units for the first time since the month of August. Volkswagen and Renault achieved modest growth but Stellantis suffered a major 16% decrease in sales performance.

Within the EU, battery electric vehicle (BEV) and hybrid electric vehicle (HEV) registrations rose by 34% and 18.4% respectively. The sales numbers for plug-in hybrid (PHEV) vehicles fell by 8.5% during this period. Pasenger car registrations of electrified vehicles increased to 57.2% in this year compared to 47.4% last year.

Major EU markets exposed inconsistent sales results to each other. The total car market in Spain grew by 5.3% yet France together with Italy and Germany recorded falling numbers. The UK recorded decreased sales numbers during the period.

The European automotive industry faces a challenging landscape, balancing the transition to electric vehicles with economic pressures and geopolitical uncertainties, including potential tariffs from the United States.