On January 14th, Volkswagen Group announced its overall performance for 2024, stating that last year, they sold a total of 9.03 million vehicles in the global market. Despite challenging conditions, they reported that electric vehicle sales in Europe notably increased by 18% in the fourth quarter. Last year, Volkswagen Group introduced over 30 new models, including pure electric vehicles, and they plan to launch 30 new models across all brands this year. The photo includes some passenger car models released last year, provided by Volkswagen Group Korea.
In January, electric vehicle sales in Europe showed a significant increase. The effect is attributed to global automakers releasing new electric models in response to the European Union (EU)’s strengthened carbon dioxide (CO2) emission regulations. The improved performance in Europe, one of the world’s largest car markets, has caught industry attention as it could either help electric vehicles escape the “chasm” phase (a temporary demand stagnation) or just be a short-term surge.
According to the European Automobile Manufacturers Association (ACEA), 166,065 new electric vehicles were registered in 31 European countries (including the 27 EU member states, the UK, Iceland, Norway, and Switzerland) in January this year, which is a 37.3% increase compared to the same period last year (120,966). Germany, the EU’s largest market with 34,498 units, recorded a massive 53.5% increase, followed by Belgium (13,712) and the Netherlands (11,157) with increases of 37.2% and 28.2%, respectively.
The recent tightening of European environmental regulations is cited as a background for this growth that undermines the chasm. From January this year, a regulation is in place in Europe which stipulates that the average CO2 emissions of new cars must not exceed 93.6 grams per kilometer. German carmakers like Mercedes-Benz, BMW, and Volkswagen have even stricter standards to meet, with limits set at 90 grams per kilometer.
Automakers that exceed the emission standards must pay fines of 95 euros (approximately 140,000 won) per gram. To avoid penalties due to these environmental regulations, budget-friendly electric vehicle launches and price reductions for electric cars have been ongoing since last year in Europe. Renault revived the small hatchback “Renault 5” as an electric vehicle last year, and Stellantis’s Citroën released the “e-C3,” an electric vehicle in the same segment. Volkswagen reduced the price of the small electric car “ID.3” to below 30,000 euros (about 45 million won) in Germany late last year.
Hyundai and Kia are also targeting the European market with their new electric vehicles. Hyundai released the compact electric vehicle Casper Electric (locally known as Instar), and Kia released the small electric vehicle EV3 in the second half of last year in Europe. An industry insider stated, “Given the significant global uncertainties, it’s too early to conclude it’s a reversal in trend, but since the era of electric vehicle popularization is clear, we are thoroughly preparing for it.”