JATO has published its report on car sales in the EEA markets for Q1 2021. It is full of surprises. The Tesla Model 3 became the fourth best-selling European car, and the volume of new registrations was the second worst since 1986. Sales of diesel and gasoline engines are in significant decline.  

Compared to last year, the market is growing, but it is still a miserable situation 

In the European Economic Area, 1,374,313 passenger cars were newly registered in the first quarter. Compared to March 2020, this is a significant increase of 63% and yet it was the second worst first quarter since 1986. The decline of the car market to 35-year-old levels is painful for dealers as well as manufacturers. But not all of them. The radical declines in sales, together with emission regulations on cars with internal combustion engines means the time is ripe for electric cars.  

Electric cars are on the rise while diesel and gasoline are slowly losing popularity 

Electric car sales are skyrocketing. While in 2019 they accounted for only 4% of sales, a year later it was already 10%, and this year even 16%. In the context of total volumes, however, it is not so much growth as the collapse of the market. Nevertheless, taking a view of share of cars sold by type of drivetrain is interesting. Over two years, diesels fell from 32% to 24%, while gasoline fell from 64% to 58%. Electric cars thus ate more into the share of diesel cars, which is partially due to hybrids, which, after all, are more often combined with gasoline engines (even Volvo, who initially tried to combine diesel with electric).  

Tesla Model 3 is the 4th best-selling car in Europe 

What is worth mentioning is the rapid increase of Model 3 sales in Europe. With 23,755 new registrations, it placed in-between the Opel/Vauxhall Corsa and the Toyota Yaris. Only 2510 more registrations and it would have beat the Golf. It can also be assumed that those sales figures were not achieved due to lack of demand, but rather lack of Tesla production capacity. Year-on-year, Model 3 registrations increased by 52%, while the Golf saw a 43% decrease. Apart from the Model 3, the sales of only one car in the top 10 grew. This was the Peugeot 2008 with a 12% increase.  

The Model 3 has become the best-selling model in the United Kingdom, France, Norway, Italy, Austria, Sweden, Switzerland, The Netherlands, Denmark, Portugal, Poland, Greece, Croatia, and, not surprisingly, Germany. However, in many of these countries there are incentives to buy an electric car as well as some other benefits such as free parking, toll exemptions, or free entry to city centers. 

However, plug-in hybrids are also supported in some countries. It is therefore not surprising that all models in the top ten best-selling PHEVs enjoyed rapid growth in sales. BMW recorded the largest increases for the X1 (585% growth) and the 3-series (454% growth), followed by Volvo with the XC60 (427% growth), and the XC40 (402% growth).  

European electric cars are playing second fiddle, at least for now 

The rapid growth was also experienced by fully electric cars. It just wasn’t as strong. The Hyundai Kona (+228%), Peugeot 208 (+189%), and the Volkswagen Up (+187%) recorded the highest year-on-year growth. However, as much as the sales of European electric cars are growing, it is nowhere near enough to catch the competition. The American Model 3 sold more cars in Q1 in Europe than the Renault Zoe (3rd place), Volkswagen’s ID.3 (4th place), ID.4 (5th place), and Up (7th place), and Peugeot 208 (9th place) combined.  

The electric offensive from the largest European and second largest global carmaker, Volkswagen, could hardly compete with another non-European player, Korean Hyundai/Kia. Within Europe’s best-selling electric cars, Hyundai/Kia have two participants – Hyundai Kona (5650 registrations and 2nd place) and the Kia Niro (4037 registrations and 8th place). In addition, another non-European carmaker, Nissan, with the Leaf (4503 registrations) made it into the top 10.  

European carmakers have long lagged behind in electromobility. The only exception was Renault in cooperation with Nissan. On the other hand, the Volkswagen ID.3 and ID.4 bring significant innovation and their sales are not bad at all. It will therefore be interesting to see if and how quickly European carmakers regain dominance of the European market. The European-American Stellantis might make a splash. It holds only the last two places in the top 10 with the Peugeot 208 and the new electric Fiat 500. But more news is coming, and the ultra-compact Citroën Ami could gain traction very quickly in many cities and the island regions. After all, at home in France, you can buy it for as little as 3 408 € + 19,99 € monthly or for 7 390 €!