Electric vehicles drive European car market growth for fifth consecutive month, with shares of Volkswagen, BYD Company Limited, and others rising.

In the month of November, new car registrations in Europe increased for the fifth consecutive month, driven by the growth in electric car sales, and the region is expected to achieve growth for the fourth consecutive year. The European Automobile Manufacturers' Association stated on Tuesday that new car registrations in November increased by 2.4% compared to the same period last year, reaching 1.08 million units. Spain and Germany saw the largest increases in their markets, while sales in Italy remained stagnant. Sales in France and the UK slightly declined. Sales of pure electric cars surged by 37%, surpassing the 34% increase in plug-in hybrid cars, marking the first time this has happened since March. Lower-priced new models of pure electric cars like the Citroen -C3 and Renault R5 E-Tech are boosting market demand. These increases offset the decline in the registration of gasoline-powered cars in the region. The European Commission has proposed to lift the actual ban on the sale of new internal combustion engine cars from 2035 onwards, which is changing the long-term sales prospects of electric cars in Europe. However, the plan still faces many obstacles before finalizing new carbon dioxide emission reduction targets. Some EU member states have expressed intentions to push for more reforms, especially regarding the treatment and compliance mechanisms of plug-in hybrid cars. Analysts from Jefferies, including Philippe Houchois, pointed out in a report last week that the market share of electric cars from manufacturers like Volkswagen, BYD Company Limited, and Renault is increasing, while competitors like Tesla, BMW, and Mercedes are seeing a decrease in their share. These major manufacturers are expanding their product lines of affordable models. Following the popular R5 E-Tech city car, Renault will start selling an electric version of the Twingo next year, with a retail price below 20,000 euros (approximately $23,499). Next year, the stimulus measures for electric car sales planned by the German and Spanish governments are expected to have a positive impact. Houchois stated, "The growth rate of pure electric cars in Europe may be at the forefront worldwide." There are also some bright spots in the region's economy, as consumers are expected to drive economic growth amid global trade tensions. Last week, European Central Bank officials raised their economic growth expectations for the next two years. While this is good news for the automotive industry, demand across Europe has not yet recovered to pre-pandemic levels due to rising prices and increased cost of living leading buyers to postpone purchases. Marc Gall, a consultant specializing in the automotive industry at Ernst & Young, said, "High new car prices, a weak economy, and various political, social, and economic crises are having an impact on Germany - the largest automotive market in the region, with both individuals and companies reluctant to make investment decisions." With the possibility of the EU easing restrictions on the sale of internal combustion engine cars after 2035, consumers will have more purchasing options in the future. Car manufacturers like Volkswagen and BMW are considering gradually increasing the inclusion of small-range fuel engines in electric cars.