European Passenger Car registrations in 2020: historical global decline but with a huge increase of electrified cars
Paris, 12th of February 2021
For obvious reasons, 2020 was not a good year for new car registrations in Europe: plants, dealerships and service workshops forced to close due to lockdowns and other restrictions throughout the year led to an unprecedented yearly drop in passenger car demand which fell by 24.3 % in Europe (EU + EFTA + UK) according to the European Automobile Manufacturers' Association (ACEA).
In France, the market felt by 25.5 % recording the lowest annual volume since 1975!
All the European markets (except Norway) recorded double-digit declines. The Spanish market experiencing the highest decrease of 32.3 %; UK a decrease of 29.4 %, with Italy registering a drop of 27.9% and Germany 19.1 %.
It is interesting to note that Norway registered a decline of just 0.7 %, with electric car sales representing 54.3 % of market share. Thanks to tax exemptions for electric vehicles and strong taxes on ICE vehicles targeting the end of petrol and diesel cars sales by 2025.
2020 saw a continuing trend across Europe of increasing electrification; indeed sales of BEV’s increased by 107% and PHEV’s by 210%.
Incentives, designed to accelerate the adoption of electrified vehicles, have already been implemented in many European countries. However, because of the covid 19 pandemics impact on car sales, Governments introduced additional stimulus packages to encourage the demand . Dependant on the country we have seen subsidies introduced for low emission ICE vehicles and / or increases in existing subsidies that are focused on electrified vehicles (PHEV or BEV).
The beginning of 2021 sees additional issues, one of which is a global shortage of semiconductors, which disrupts automotive production resulting in a delay in the recovery of new vehicles sales. Some manufacturers have already announced the temporary closure of production sites. This shortage is expected to cut global output in the first quarter by more than 670,000 vehicles according to IHS Markit.
Indeed, semiconductors play an important role in the automotive industry, which will continue to increase as demand for connectivity and electronics grow, electric cars being an important user.
Overcoming this shortage will be one of the major challenges that manufacturers will face this year. But not the only one.
European countries are conscious of the risk of dependency on production from Asia, and are already considering solutions. But will Europe be able to relocate sufficient production?