The many lockdowns across Europe and the rest of the world to curb the coronavirus pandemic has drastically changed how we move around from place to place. Work-from-home restrictions, furlough schemes and job losses left millions of cars gathering dust in driveways. It is not surprising then that the demand for new cars across Europe plummeted in fact in Germany a country that is Europe’s largest car market, new car registrations in the first half of 2020 declined by 35% compared to the same period in 2019 and a similar trend was seen across all the other European countries and in the UK. However, one sector of the car market is still growing. Electric vehicle sales, both fully battery electric vehicles and plug-in-hybrid electric vehicles have increased, not only in terms of their market share, but also in absolute terms. In Germany, electric vehicle sales from January to June doubled which is incredible given the current economic and public health situation. Similar trends are being seen across Europe with France, for example, seeing an even greater shift to electric vehicles this year.
The overall decline in car sales during COVID-19 is clearly linked to financial constraints for many consumers as a result of the pandemic. But there are also other factors at play. For example, during the height of restrictions many car-owning households would not have replaced their cars as normal. During this period, the demand for car services – most of which involves getting to work and dropping off the kids – disappeared. And any passengers wanting to take a prospective purchase for a test drive would have run up against social distancing issues. There are also health factors to consider as the COVID-19 pandemic has led to a fear of using public transport and a shift to non-public forms of transport, including cars. Many of these factors may partially revert once the vaccine roll out is complete and governments across the world get control of the virus.
As the variety of electric vehicles that are affordable and available has increased, and as each new model appears more and more in tune with the driving needs of the typical family in terms of range, charging and size, economic factors are likely to be playing a role in the large shift to electric vehicles along with the increasing desire to be aware of climate change and how our driving behaviour contributes to this.