🔍 The EU car market is in decline! 🚗
August 2024 brought worrying signs for the European automotive industry. New car registrations have fallen by 18,3 % across the major markets. This reflects not only short-term problems, but also long-term changes that could fundamentally affect investment in the EU automotive industry. 📉
📊 Electric cars at a crossroads? ⚡️
The biggest decline was seen in the pure electric vehicle (BEV) segment , where sales fell by dramatic 43,9 % compared to last year. While in 2023, electric vehicles accounted for 21 % of the market, this year it is only 14,4 %.
This raises a question for me about the future of electromobility, which has long been considered "gold rush" of the automotive industry. However, this trend also suggests that the market is stabilising and is entering a phase where more innovation, support and adaptation to changing conditions will be needed. 🚀
🔄 Hybrids on the offensive 🔋
On the other hand, hybrid electric vehicles (HEVs)are performing well beyond expectations. Their sales are up by 6,6 % and now account for over 31 % of the total car market.
Hybrid technology offers a solution for customers who are not ready to switch fully to electric vehicles but are looking for greener alternatives. This segment may be the key to the transition period before full electric mobility. 🌍
⛽️ The end of traditional fuels?
Petrol and diesel cars continue to lose ground. Sales of petrol cars have fallen by 17,1 %, while diesel cars saw a decline of 26,4 %. The market share of diesel cars fell to just 11,2 %. This decline signals that the market is increasingly moving away from traditional fuels.
🛑 What about regulation?
European Automobile Manufacturers' Association (ACEA) has expressed concern over the fourth consecutive monthly decline in EV sales. Manufacturers are calling for urgent action from the EU to prevent further declines, especially in light of new CO₂ emission standards coming into force in 2025. Regulatory changes are expected to have a huge impact on the entire market - including supply chains and EV infrastructure.
🚀 The future of the automotive market is full of change and so far it doesn't look good for European carmakers. Volkswagen $VOW3.DE is one of the first to announce massive layoffs and factory closures. In fact, with these "classic" car companies don't look good at all, let's see how it all plays out. I'm not so worried about the premium brands ($MBG.DE, $RACE, $P911.DE), they can always find their customers. However, another issue is competition from China, which can provide EVs at unbeatable prices.
What is your opinion of the automotive industry in Europe?
The problem is not whether combustion or EV (EV is simply much better both in terms of production and user) but further development of production technology. While Europe is running a classic Ford line only supplemented by single purpose robots. Tesla closely followed by China has switched to Gigapress production, unboxing, and it will all be controlled by universal robots. Moreover, China has wisely let its competitors sink a lot of money into the technologically obsolete factories it has allowed them to build while itself learning from Tesla. These Chinese capabilities of European manufacturers are now uncompetitive, as are their parent companies, purely because of the cost of production. The tragedy of VW was that when Dies explained to them a few years ago that it was impossible to produce a car in several times Tesla's time and pushed for efficiency, the union pressured the owners to get rid of him. Well they ended up closing factories instead of radically upgrading them with this approach. Which is the only thing that would help them. So now they're leaning out production and trying to bridge the technology gap by working with "startups" Rivian, QS. And the familly trust Porsche Piech also separated Porsche under its control. Probably to save some of what their ancestors built. 🤷♂️
I'm staying out of it now. I'd rather focus on US or Chinese car companies now.
Admittedly, it's really bad now. Big problems with $VOW3.DE. I have $P911.DE stock in my portfolio and it's down a lot too, but I hope that in some time the company will start doing well again.
It's not looking good right now. I think the biggest problem is $VOW3.DE and the rest of it doesn't seem to be doing too badly.
I also think and hope that those premium brands like $RACE and $P911.DE won't have such a problem.
Subsidies have ended and the market has become saturated. Many cars have been sold in recent years, and not just electric ones. Even the traditional car companies are in trouble.
I don't invest in this sector, but the Chinese car companies will have a huge advantage and a head start, so it's not worth investing in the European ones.