Oil prices soaring, accelerating the wave of electrification! European car sales have increased for four consecutive months.

With consumers purchasing more affordable electric and hybrid car models, the market demand continues to improve, with European car sales increasing for the fourth consecutive month. Data released on Tuesday by the European Automobile Manufacturers Association (ACEA) showed that new car registrations in Europe grew by 3.6% in May, reaching 1.15 million units. Major markets such as France and the United Kingdom saw sales growth, with the increase in deliveries of electric and hybrid cars offsetting the decline in sales of fuel vehicles. Europe's car sales rose by 3.6% in May Due to disruptions in global oil supply caused by conflicts in the Middle East, high oil prices are driving the demand for electric cars. As fuel costs rise, consumers are increasingly concerned about the long-term impact of the Middle East war on future prices. This month, the European Central Bank raised interest rates for the first time since 2023, after the inflation rate accelerated to 3.2%, higher than its 2% target level. Rising inflation is starting to put pressure on car demand. Last week, BMW became one of the first companies to explicitly state that the Middle East conflict is undermining global consumer confidence. Oxcap Analytics analysts suggest that this decrease in demand could put pressure on mass market car manufacturers including Renault and Stellantis. Nevertheless, the growth in sales is providing some breathing space for European car manufacturers. They are currently facing multiple challenges, including slowing sales in the Chinese market and factors such as US tariffs. With manufacturers like Volkswagen, Stellantis introducing more competitively priced models, and Chinese brands like BYD Company Limited continuing to expand, electric cars are becoming increasingly accepted by consumers. In Germany, the largest car market in Europe, electric car sales surged by 39% due to the implementation of new subsidy policies, offsetting the weak demand for fuel vehicles. Across the entire European region, the percentage of registrations for pure electric cars and plug-in hybrid cars as a proportion of total sales has risen to 34%. Meanwhile, gasoline and diesel car sales declined by 19%, further indicating a structural shift in the automotive market. Major European car manufacturers' performance in May Chinese brands are continuously expanding their influence in the European market, not only through selling their own brand of cars but also through collaborations with European car manufacturers, utilizing local idle production capacity. According to Bloomberg Intelligence analyst Gillian Davis, Chinese brands accounted for 16.3% of new car registrations in the UK in May. Among them, the Jaecoo 7 Sport SUV under CHERY AUTO became the fourth best-selling model in the UK. In other European markets, Chinese car manufacturers are also making breakthroughs. CHERY AUTO saw sales triple; BYD Company Limited saw sales double; and SAIC Motor Corporation's former British brand MG saw an increase in sales. Although the overall sales volume is still relatively small, the growing demand for these Chinese brands drove the overall increase in new car registrations in Europe in May. In the German market, BYD Company Limited saw a threefold increase in new car registrations compared to the previous year, with a market share of 2.6%. According to data from the German Federal Motor Transport Authority (KBA), the BYD Company Limited Atto 2 became the best-selling plug-in hybrid model in Germany last month.