Finnish Car Market Sees Overall Decline, But Electric Vehicle Registrations Surge to Nearly One-Third Share
Key Insights
New car registrations in Finland decreased by 3.8 percent from January to July compared to the previous year, despite a slight increase in July.
The overall market slump is attributed to ongoing consumer caution, higher borrowing costs, and extended vehicle delivery times.
Fully electric vehicles now constitute almost one-third of all new passenger car registrations, a significant rise from 4 percent in 2020.
Growth in EV sales is supported by government incentives, expanding charging infrastructure, and increasing model availability.
New car registrations in Finland experienced a 3.8 percent decline between January and July of the current year compared to the same period in 2024, despite a modest 4.4 percent increase in July, which saw 5,419 new passenger cars registered. This cumulative downturn indicates persistent market caution and broader economic uncertainties affecting automotive sales across Europe.
Tero Lausala, Chief Executive of the Finnish Central Organisation for Motor Trades and Repairs, noted, "The number of new registrations is still lagging behind last year, even though registrations in 2024 were already at a historically low level." This subdued market performance is attributed to a confluence of factors, including elevated borrowing costs, diminished consumer confidence, and extended vehicle delivery times.
In stark contrast to the overall market contraction, the fully electric vehicle (EV) segment continues its rapid expansion. EVs now account for nearly one-third of all new passenger car registrations in Finland. This represents a substantial surge from just four percent in 2020, demonstrating a profound and sustained shift in consumer preference and the efficacy of public policy incentives.
The accelerating adoption of electric vehicles is primarily fueled by a combination of government subsidies, significant expansion of the national charging infrastructure, and a wider availability of EV models across various price points. Domestic buyers are increasingly motivated by the lower operating costs associated with electric vehicles and the mounting regulatory pressure on internal combustion engine (ICE) vehicles.
While industry analysts do not foresee a major rebound in overall new car registrations for the remainder of the year, the trajectory for electric vehicle adoption is projected to maintain its current pace. The substantial growth in Finland's charging infrastructure over the past two years has played a critical role in mitigating range anxiety among prospective buyers and facilitating broader market access for EVs. Automotive retailers are strategically reorienting their focus towards capitalizing on the escalating demand for battery-powered and hybrid electric models, acknowledging their pivotal role in the evolving automotive landscape.