Car sales in Europe have seen a surge for the tenth consecutive month in May, primarily driven by a high demand for electric vehicles (EVs). Registrations of new cars increased by 18% to 1.12 million vehicles, with sales of battery-electric vehicles jumping 66% last month. EV sales were boosted due to improved supply of components, although some pockets of shortages still exist. Tesla Inc. has led the EV advance, with sales doubling during the first five months of 2021, thanks to aggressive price cuts, according to analysts at forecaster Jato Dynamics. Other EV models, such as SAIC Motor Corp.’s MG brand, are also becoming popular with buyers.
Before this ten-month growth spurt, sales had reduced for 13 consecutive months, primarily due to long-standing supply-chain problems. In recent months, car manufacturers have finally started to ease the supply-chain issues which led to their production lines slowing down. However, there are growing concerns that increased living costs, including soaring energy prices, may lead to consumers cutting back on big-ticket purchases like cars.
While Germany's economy shrunk during the winter months and household spending dipped on food, beverages, and apparel, more recent economic data highlights cooling growth. Chemical output in Europe's largest economy is still 20% lower than historical levels. Nevertheless, the auto industry in Europe remains upbeat, with almost 14% of new cars registered in the first five months of 2021 being EVs, with sales surging over 40% to just over 730,000 units. Tesla has pulled ahead of the Nissan and Volvo brands, with 138,294 EVs registered.
Renault SA is among the top performers among Europe's largest car manufacturers, with sales increasing 31% to 515,340 units, trailing just behind Volkswagen AG and Stellantis NV. This is an improvement for the French carmaker, which had slipped behind Hyundai Motor Group in the first five months of 2020. In May, Italy and Germany led the overall sales rise of all types of vehicles, with gains of 23% and 19%, respectively.