Europe's gasoline, diesel car sales lose majority market share to EVs for first time

The market share of gasoline and diesel cars in Europe during the fourth quarter of 2022 slipped below 50% of sales for the first time, according to new data, as the growing appeal of hybrid and fully electric vehicles continues to displace conventional road fuel demand.

The combined market share of gasoline and diesel cars in Europe made up 45.2% of new cars sold in the fourth quarter, according to the European Automobile Manufacturers Association, or ACEA, down from 50.5% of total sales in the year-ago period.

Sales of diesel cars continued to suffer in the quarter, the data shows, with European sales down 0.8% year on year, and Belgium, France, Ireland and Sweden recording the biggest falls. As a result, registrations of new diesel cars made up just 12.6% of the market from 15% a year earlier.

Although sales of gasoline-fueled cars in the quarter rose 5% year on year, gasoline car sales in the region made up 33% of the market, down from 36% in the 2021 period, the data shows.

At the same time, sales of fully battery electric cars (BEVs) showed the biggest increase in the quarter, surging 36% to make up 19% of total sales compared with 16% in Q4 2021, according to the ACEA data. Germany and the UK continue to lead European BEV sales in terms of absolute volumes

while Norway and Germany led in terms of market share at 82% and 25% of overall sales, respectively.

The loss of majority market share by conventional gasoline and diesel cars in Europe comes amid a fast-growing appetite for battery-powered mobility which accelerated after the COVID-19 pandemic despite overall falling cars sales.

Vehicle sales have since recovered and total passenger car sales in the fourth quarter rebounded by 15% year on year, the data shows.

Oil displacement

With BEV car sales showing the strongest growth of all fuel types in the quarter, their gap narrowed to sales of hybrid-electric cars, which are currently the second most popular powertrain option in Europe behind gasoline at 22.6% of the market, the ACEA data shows.

Overall in 2022, the market share of BEVs expanded to 12.1%, an increase of three percentage points year on year.

Last year the EU effectively banned sales of new gasoline and diesel cars from 2035 as part of a major policy package to achieve net-zero emissions by 2050. The EU move requires a 55% cut in CO2 emissions for new cars sold from 2030 versus 2021 levels, much higher than the existing target of a 37.5% reduction by 2030. The UK has already banned sales of new conventional cars from 2030.

S&P Global estimates that plug-in electric vehicles will displace about 1.4 million b/d of gasoline and diesel demand in Western Europe by 2035, rising to around 2.1 million b/d in 2040. Globally, S&P Global estimates that all alternatively fuelled vehicles will displace around 2.75 million b/d of gasoline over the 2030-2040 period.

Automaker Toyota recently reported that it achieved record new car sales in the UK in 2022, noting that alternative fuel vehicles, which include hybrid electric, plug-in hybrid electric, fuel cell electric, and battery electric vehicles, accounted for 75% of all new car sales.

S&P Global Mobility projects that the share of battery electric vehicles, plug-in hybrid electric vehicles and fuel-cell electric vehicles in new light vehicle sales in Europe, mainland China and the US will rise to 70%, 49%, and 47% in 2030, respectively, from an estimated 19%, 18% and 8% in 2022.