Europe Car Sales Extend Growth Streak to Almost a Full Year

(Bloomberg) -- Auto sales in Europe rose in June as growing demand for electric cars and improved parts supply helped fuel an 11th consecutive month of growth.

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New-car registrations increased 19% to 1.27 million vehicles, the European Automobile Manufacturers’ Association said Wednesday. Sales of battery-electric vehicles surged 55%, while deliveries of diesel cars declined 10%.

Carmakers are still working down order books as longstanding shortages of critical components like semiconductors have eased. The outlook, though, is clouded by prospects that supply-chain logjams could return amid surging demand for EVs, and consumers may cut back spending due to higher costs of living and slowing global growth.

Read more: Stellantis Sees Risk of New Chip Shortage on Demand Surge

At the same time, competition for EV-related investments is heating up. The UK, which has seen its car industry shrink in recent years, landed a significant win Wednesday when Tata Group announced plans to build a £4 billion ($5.2 billion) battery plant in Britain to supply EVs made by Jaguar Land Rover Automotive Plc.

For the first time, EV sales outpaced those of diesel-fueled cars in the European Union. The bloc registered 158,252 EVs — a market share of about 15% — while 139,595 diesel cars were shipped, representing about 13% of sales.

Read more: Jaguar Owner Tata Picks Britain for £4 Billion Battery Plant

Buyers in Germany registered 52,988 fully electric cars in June, the most in Europe and a 64% increase from the same month last year. France also contributed to EV growth with 33,280 sales, while the Netherlands added 13,892 battery-powered cars.

Including all fuel types, Volkswagen AG sold the most passenger cars in the region, logging 325,612 deliveries, a 27% increase from last year. Stellantis NV’s sales declined 2.5% to 210,495 — still enough to come in second overall.

Tesla Inc., which plans to expand production capacity at its factory in Germany, sold 47,606 vehicles, pulling ahead of local brands Fiat and Citroën and more than doubling registrations from a year ago.

(Updates with EVs overtaking diesels in EU in fifth paragraph.)