The Latest Trends in the European New Car Market
The most recent data collected by JATO Dynamics reveals fascinating insights into the European new car market. In April, there was a significant surge in demand for pure electric cars, accounting for 22 percent of the market share. The only month with a higher market share was December 2022, which reached 25 percent. Astonishingly, more than one in five newly registered cars in Europe were purely electric. This remarkable increase can largely be attributed to the impact of Tesla, despite its limited and relatively outdated range. The American brand is effectively capitalizing on the growing interest in electric vehicles amongst consumers. In August 2023 alone, Tesla registered an impressive 33,809 cars in Europe, marking a 240 percent increase compared to the same month the previous year. As a result, Tesla surpassed major mainstream European brands such as Opel, Citroën, and Fiat, and came in as a close runner up to Ford by only 3,600 units.
Tesla’s Unparalleled Success
Tesla’s continued success can be largely attributed to two of their models: the Model Y and Model 3. The former consistently ranks as the best-selling model in Europe and is expected to maintain this position until the end of the year. This puts the European car market in an interesting predicament, as a foreign car has garnered more popularity than any vehicle produced in Europe. To date, Tesla has reported over 169,000 units of the Model Y, a remarkable increase of 216 percent. As for the Model 3, Tesla has implemented price reductions to expand its customer base and steal sales from other segments, such as the C-segment. Further growth is expected once the updated version hits the market. Notably, Tesla, along with two major Chinese companies, Geely and SAIC, has consistently gained market share over the years, reinforcing their position as industry leaders. These accomplishments are the direct result of strategic actions taken by Tesla, including the gradual introduction of the Model 3, the expansion of sales points across Europe, and the introduction of the Model Y. To sustain their momentum, Tesla has also implemented price cuts.
The MG Phenomenon
Another prominent player in the transition from petrol/diesel cars to pure electric is MG. This brand, positioned as British but entirely designed, developed, and produced in China, is truly changing the game. MG’s latest introduction in Europe, the MG 4, continues to captivate consumers with its competitive pricing and favorable reviews. In August, MG made its way into the European top 20 with nearly 14,900 units sold. This surpasses the numbers recorded by Suzuki, Mini, Mazda, and Jeep. Impressively, electric models accounted for 59 percent of MG’s sales volume, placing the brand in seventh place among the best-selling Battery Electric Vehicle (BEV) brands. They even outperformed major brands such as Opel, Audi, Skoda, Peugeot, and Renault.
The Implications for Traditional Brands
Unfortunately, the rise of Tesla and MG has come at the expense of reduced market share for some traditional automakers. Volkswagen, Ford, Citroën, Peugeot, and Hyundai experienced the largest market share losses during the month. While these brands do offer electric vehicles, they are simply not able to compete with the dominance of Tesla and MG. The main challenge for traditional brands lies in the fact that while Tesla makes price cuts, their models encroach into the lower segments of the market. At the same time, MG presents a formidable threat from below with their highly competitive products.
Felipe Munoz, the author of this article, is an Automotive Industry Specialist at JATO Dynamics.
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