BrazilEuropean countries risk missing out on the electric vehicle drive
A new study shows that the market share development for electric and hybrid vehicles continues to be positive for most mature countries. However, underprepared European manufacturers risk missing the ride.
The electric vehicles (both Battery Electric Vehicle – “BEV” and Plugin Hybrid Electric Vehicle – “PHEV”; collectively referred to as “EV” ) are gaining popularity. The number of electric vehicles in stock exceeded a total of 2 million in 2016, having been almost non-existent 10 years ago; and the battery-powered vehicles numbered just hundreds globally in 2005, surpassing the 1 million milestone in 2015.
The rise of electrical mobility is though highly concentrated – globally, 95% of electric car sales are taking place in just ten countries: China, the United States, Japan, Canada and the six leading European countries of Norway, the UK, France, Germany, the Netherlands and Sweden. According to analysis by consulting firm BearingPoint, Norway is the dominant leader when it comes to electric vehicle (EV) and hybrid electric vehicle (HEV) market share: 29.5% of vehicles purchased in Norway in 2016 were either electric or hybrid electric. The Nordic nation were followed by Japan with an EV/HEV market share of 21%, and the Netherlands with 13%. Europe’s top three EV/HEV-producing countries, France (3.3%), Italy (1.8%) and Germany (1.3%), are meanwhile far behind the other leaders when it comes to market penetration of EV/HEVs.
“Europe’s main car producing countries are way behind regarding market share,” said Matthias Loebich, Global Leader Automotive at BearingPoint. “They clearly need to shift gears and energies towards electric drive.”
A recent examination of the progress of the European manufacturers further illustrates this. The research showed that European manufacturers have not yet been able to expand their sales of electrified vehicles. Renault-Nissan is the most active player in the sustainable cars segments, followed by BMW which has benefitted from a strong green focus over the past twelve months. Overall, there is only a slight upward trend across European producers, with German giants Daimler and VW, and French rival PSA showing little movement in the performance vis a vis the previous year.
When asked how electrification can be accelerated, Loebich said government incentives, such as taxation breaks or subsidies, play a role. “What really helped in countries like Norway or China to push the electric market share were government incentives to make companies and private people decide for electric cars.”
The role of the government
The BearingPoint study highlights that government incentives are a big driver of EV/HEV sales, with significant increases seen in countries having the highest incentives or subsidies, and decreased demand in countries where such subsidy schemes diminished in value. Incentives are a main factor why the total volume of electric and hybrid electric vehicles delivered in Europe jumped 32% in H1 2017 when compared with same period in 2016. It is expected that by the end of 2017, the total volume of electric and hybrid electric vehicles delivered in Europe will exceed 300,000. However, the bad news is that the market remains concentrated in just a few countries, making it difficult for manufacturers to prioritise EVs, even with localised subsidies to incentivise them.
Another factor is access to electrical power. The power charging units are extremely important in the purchase decision for an electric vehicle; by far the majority of such charging units are “normal power charging”, whilst only little over 10% are high power charging units in Europe. However the trend in this respect is encouraging, as the total number of publicly available charge units grew from 3,200 units in 2010 to almost 120,000 units in 2017. In the UK, this considerable infrastructural issue saw the Highways Agency committing to a £15 million programme designed to ensure that drivers are never more than 20 miles from a charging point on the UK’s A roads.
Production of EV’s
When it comes to production, China became the global leader of electric cars sold in 2016, surpassing the US for the first time. The country’s “electric-friendly” policies make China account for more than 40% of electric cars sold worldwide, partially driven by the national government’s need to address deteriorating air quality in its major cities. This mirrors previous analysis by Roland Berger, which found that China is by far the leader when it comes to the projected absolute production of EVs and PHEVs through to 2019.
Countries that have seen their production of EV’s grow rapidly are Turkey, Italy, Portugal and Swden, all booking 9% growth rates, trailing just China which booked growth of 14%. According to further analysis conducted by AlixPartners, meanwhile, at the current rate of 168 % expansion over the past two years, the share of EV vehicles in the overall automotive sales of Europe is expected to surpass 40% by 2030.
