What’s Driving EV Sales Slump?

Thu 4th Aug 2022

In a market where excessive petrol prices should surely be encouraging more and more drivers to turn to electric vehicles, latest industry analysis throws-up a puzzling conundrum, why has sales of EVs and Plug-In Hybrids suffered their ‘biggest fall on record’?

The news comes from data published by JATO Dynamics this week, which reflects a decline in zero-emissions vehicles for the fourth month in succession. The eight per cent slump, from 233,000 units in June 2021, to 215,000 in June 2022 was the biggest fall of EV and PHEV sales outside of pandemic conditions. Perhaps more worryingly the overall market declined by 17 per cent from 1,268,508 in June 21 to 1,054,807 in June 2022, the lowest total sales for June since 1993.

“The operating environment is becoming increasingly difficult, and worryingly the few safe havens that previously existed across the industry are now starting to show signs of decline too,” said JATO Dynamics analyst Felipe Munoz.

“While Tesla was mainly affected by the halt of production at its plant in China, the brands from Volkswagen Group were forced to stop producing a number of electric and plug-in hybrid vehicles due to supply issues arising from the Russia-Ukraine conflict.”

Despite the negative European figures, the British market is showing some signs of recovery according to Mike Hawes, CEO of the Society of Motor Manufacturers and Traders.

Output in the UK market saw a 5.6 per cent uplift and Hawes is confident that the market will continue to grow.

“Car manufacturers have been suffering from a ‘long COVID’ for much of 2022, as global component shortages undermine production and put supply chains under extreme pressure,” Hawes said.

“Key model changeovers and the closure of a major plant last year have also impacted output, but there are grounds for optimism with rising output over the last two months.”