Article Type: News

The green transition of electric trucks and buses

As electric vehicles (EVs) begin to make serious inroads into the passenger-car market, a green transition is also underway for heavy-duty trucks and buses. Przemek Kolasa, data manager for commercial vehicles at EV-volumes.com, examines the progress.

As a large contributor to global greenhouse gas levels, the commercial-vehicle sector is looking towards zero-emission possibilities. The development of battery-electric trucks and buses will lead to significantly cleaner mobility within logistics and passenger transport.

China leads heavy-duty electric-truck market

Currently, OEMs from China lead the way when it comes to the green transition of heavy-duty trucks, with a dominant share of the global market. However, the country has lost some of this share since 2021 as other markets have grown, with domestic OEMs building up their fleets.

In 2021, Chinese OEMs held a 96% share of the global market, while other countries only took a combined share of 4%. The slow shift to a more generalised market began in 2022, with China’s share dropping to 92%. Between January and September 2023, the country held 89%, with the other 11% shared between other regions.

Therefore, Chinese OEMs have seen their market share fall by seven percentage points in two years. This is the result of the green transition picking up in regions such as Europe and the US. As the number of Chinese OEMs in these markets is still relatively small, domestic manufacturers have not been impacted, allowing them to take advantage of their already well-established presence to appeal to regional customers.

Europe’s household names

Figures from the third quarter of 2023 show Volkswagen (VW) Group’s Traton division, led the European electric-truck market with a 37% share. It was followed by AB Volvo (29%) and Daimler Trucks (17%). Together, these three companies accounted for 83% of registrations, with the final 17% made up of all other manufacturers.

From January to September, Traton division, AB Volvo and Daimler Trucks significantly increased their registrations, growing 231%, 342% and 541% respectively year on year. Therefore, while the electric-truck segment is expanding rapidly in Europe, it is doing so without the need for Chinese manufacturers.

A more diverse electric-bus sector

The bus sector’s green transition started much earlier than that of trucks, meaning the market is more developed and diverse.

China does still lead the way, but its share dropped further than in the truck market. While in 2021 the country held a 95% market share, this fell to 90% in 2022. From January to September, the country held 81%. Other markets have eaten into the Chinese advantage, moving from a 5% holding in 2021 to a 19% share in the first three quarters of 2023.

A serious alternative

Unlike the electric-truck market, Chinese penetration in other countries has occurred. Focusing on Europe, domestic manufacturers are starting to offer a serious alternative to established China-based businesses, while the market is more spread out due to the development of green technology in the sector.

In the third quarter of 2023, BYD held a 12% share. However, VW Group, through its Traton division, closed rapidly, ending the period with 11% of the market. Close behind was CAF, which had a 9% market share across the three months.

However, the Traton division has experienced stunning growth in the electric-bus market over the first three quarters of 2023. The company increased its registrations by 242% in the nine-month period, while BYD only improved deliveries by 33%. CAF was also able to close in on BYD, with a 55% registration increase, but far from Traton’s impressive figures.

More to come

There is still a long way to go in the green transition of trucks and buses, as more manufacturers bring their products to market, and further technological developments play a part.

Markets are still in the early stages of a zero-emission push. This means that trends are very much dependent on a number of factors, such as battery development, hydrogen fuel cells for long distances, the market economy, and incentive packages.

All of these elements will play a crucial role in electric-truck and electric-bus uptake, helping propel the green transition of these vehicles further.

BYD fills top spots behind Tesla in global EV market in October

Electric vehicles (EVs) made up 17% of global new-car sales in October, as BYD filled the top spots behind Tesla in the model ranking. José Pontes, data director at EV-volumes.com, explores the leading models, brands and manufacturers.

Global EV registrations, made up of battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs), continued to rise in October. A total of 1,279,831 new plug-in vehicles took to roads around the world.

This meant EVs made up 17% of the global new-car market in the month, with BEVs alone taking a 12% share. However, the total electric-vehicle figure narrowly missed September’s record result. As the internal-combustion engine (ICE) market continues its recovery to pre-COVID-19 levels, the EV share is experiencing ongoing pressure.

BEV registrations increased 33% year on year, accounting for 68% of October’s global EV market. This put the year-to-date rise at 70%. PHEV registrations jumped 46% compared with October 2022. This was largely thanks to new range-extended models, with battery capacities over 40kWh, appearing in China. Removing the Chinese market from the tally reveals that PHEV registrations only grew 11% year on year.

Tesla tops BYD batch

The Tesla Model Y remained high above its competitors in October, achieving its best-ever first month in a quarter with 78,250 registrations. This could result in a new record for the crossover come December, with Tesla’s usual quarterly delivery strategy resulting in higher quarterly registrations.

Behind the Model Y, BYD occupied the next five top-ranking spots. The BYD Song took second place with 64,990 registrations, while the Atto 3 ended the month in third with 47,134 units. The Chinese carmaker is leaning further into BEVs, with the Song, Atto 3, Dolphin and Seagull all achieving new records in October with strong all-electric results.

In eighth, the GAC Aion Y continued its record-breaking streak with 27,140 registrations. It was the best-selling non-Tesla, non-BYD model on the table. But this position might be challenged soon, as the now ninth-place Wuling Bingo delivered a record 23,744 units.

In 13^th, the Volkswagen (VW) ID.3 had its best result in years, hitting 15,731 units. This was mostly thanks to price reductions in China, which allowed the compact hatchback to reach record registrations. The VW ID.3 and ID.4 were the only models made by legacy manufacturers in October’s top 20, highlighting the disruption caused by the electric vehicle revolution.

Elsewhere, Geely’s Panda Mini hit a new high score of 13,052 units, putting it in 16^th. Li Auto’s line-up also performed well, with the 17^th-place L9 standing out. The model achieved its third record result in a row with 12,756 registrations.

Largest to smallest

Reviewing the largest to smallest models outside of the top-20, the Huawei-backed Aito M7 SUV hit 11,593 registrations. FAW’s Hongqi E-QM5 sedan broke the five-digit barrier with 10,021 registrations. The Zeekr 001 and Denza D9 also posted solid results, reaching 8,518 and 10,063 registrations respectively.

In the midsize category, the Xpeng G6 reached another record score with 8,741 units, while the Lynk & Co 08 PHEV hit 8,038 registrations in only its third month on the market. The midsize crossover features a 40kWh battery, a capacity which appears to have become the minimum requirement for PHEVs in China.

Other respectable results came from the BMW i4 (7,204 units), the Geely Galaxy L7 (9,336 units), the Leapmotor C11 (8,772 registrations), and the Hyundai Ioniq 5 (8,970 registrations). As for the compact category, the MG4 scored 10,026 registrations in October. Great Wall’s Ora Good Cat managed 9,241 registrations, thanks largely to exports.

In the compact crossover category, the Audi Q4 e-Tron (11,352 units) and the Skoda Enyaq (8,570 units) hit record scores. Meanwhile, the Volvo XC40 (7,905 units) performed respectably ahead of the EX30’s arrival. Most notably in the city EV category, Chery’s QQ Ice Cream registered 7,111 units.

Results set in stone

In the year-to-date table, the full-year results appeared set in stone. The Tesla Model Y posted almost twice the sales of the BYD Song. The Chinese model profited from a sizable 80,000-unit advantage over the third-place Tesla Model 3, which managed a 47,000 unit lead over the BYD Qin Plus in fourth.

Therefore, 2023’s headline results will likely mirror those from 2022. The Tesla Model Y will take its second title in a row, followed by the BYD Song with its second silver medal, and then the Tesla Model 3 in third for the second consecutive time.

Further down the table, seventh place is another point of interest during the last quarter of 2023. The GAC Aion S had a slow October, allowing its rivals to draw closer. Its sibling, the GAC Aion Y, jumped two positions to eighth, while the ninth-place Wuling Mini EV and the 10^th-place BYD Han could also benefit.

Not far behind, the BYD Seagull swooped into 11^th. The city model is poised to join November’s top 10 and could even reach seventh place by the end of the year.

The Wuling Bingo climbed a spot to 14^th. While not experiencing the same level of success as its BYD competitors, the Dolphin and the Seagull, Wuling’s supermini is a welcome addition to the EV market and shows great potential as an export.

BYD’s record streak

Considering brands, BYD posted its sixth consecutive registration record in October, with 289,588 units. Tesla delivered 115,055 units, a standard result for the brand in the first month of a quarter. The SGMW joint venture between SAIC and GM-Wuling, took third with 54,921 registrations. The brand is banking on its Wuling Mini EV and Bingo models performing well in the rest of the year.

Seventh-place Li Auto saw its seventh record month in a row. The carmaker achieved 40,424 registrations thanks to positive results across its line-up. In eighth, Changan also managed an excellent month thanks to the success of the Lumin and the Deepal S7 SUV.

Another best-performance in the month was Geely in ninth with 38,665 units. This was thanks to strong results across the board, including the Panda Mini’s record results as well as the Galaxy L7’s 9,336 units. Meanwhile, 14^th-place Volvo had a more muted month with just 21,332 registrations.

Audi achieved a new best for 2023, with 25,577 registrations. However, BMW scored an extra 18,000 units in the same period, placing it in fifth. The reason for this difference between the two German marques is volume.

While Audi has the Q4 e-Tron and Q8 e-Tron as its volume models, BMW offers twice the number of vehicles. This includes the iX1, iX3, i4, iX, and the i3. Even without a star player like the Q4 e-Tron, BMW’s combination of models is enough to outsell Audi. In order to offer stronger competition, the VW Group brand needs to roll out the A6 e-Tron and Q6 e-Tron soon.

Xpeng took 15^th following its best-ever result of 20,002 registrations. The company saw the G6 shine, while the bigger G9 also performed well. The Chinese startup will be hoping to post more consistent results soon. Leapmotor also continued its high-score streak thanks to the success of its C11 SUV. The brand scored its third record score in a row with 18,269 units registered.

Race for third

In the year-to-date brand table, BYD remained well ahead of Tesla. The two makes together were responsible for more than a third of the global EV market. Below, there could be an interesting race for third, with GAC Aion reporting a slower October.

This allowed BMW to gain ground, with only 13,000 units now separating the two. While the German brand will be hoping this trend continues, third is still a tall order, with its last podium presence achieved back in 2016.

In seventh, Mercedes-Benz could be pressured in December by a rising Li Auto. The Chinese startup has broken its records every single month of the year, so it could end up passing the German brand towards the very end of 2023. Elsewhere, Kia surpassed its stablemate Hyundai to take 13^th, and Nio climbed to 17^th, surpassing Ford.

VW Group faces Geely-Volvo

Looking at registrations with brands gathered under manufacturing groups, BYD took hold of 22.1% of the global EV market. Meanwhile, Tesla managed a 13.4% share. Third place went to VW Group (7.3%), which kept a good distance ahead of Geely–Volvo (6.7%) in fourth.

The Chinese conglomerate is unlikely to take third from the German OEM this close to the end of the year. However, 2024 is likely to feature an exciting race between the two companies as they try to line up behind Tesla and BYD.

In fifth, SAIC (5.5%) saw a reversal of fortunes from previously falling shares. But this was not the case for Stellantis, which sat in sixth as its share shrank to 4.4%. In seventh, BMW Group (4.1%) held its position, even gaining ground over GAC (4%) in eighth and Hyundai Motor Group (3.9%) in ninth.

Tesla trumps BEV table

Looking just at BEVs, Tesla remained in front with a 19.3% share across the first 10 months of the year. The US carmaker still has a comfortable lead over BYD (16.3%), making it unlikely that the Chinese company will take the lead in the final stages of the race.

This looks set to change next year, however, as BYD’s crowning becomes simply a matter of time. This is unlikely to happen in the first quarter, as China’s market will slow due to the festive period, resulting in fewer sales for BYD. Instead, the second quarter will likely see the Chinese carmaker surpass Tesla.

In third, VW Group (7.8%) maintained space between itself and SAIC (7.6%). An entertaining race can be expected between the two across the remainder of the year. In fifth, Geely-Volvo’s share surged (6.2%) thanks to strong results

EVs Forecast to Account for Two Thirds of Global Light-Vehicle Sales in 2035

We forecast that global EV sales, comprising battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs), will reach 14.1 million units in 2023. This equates to EV sales growth of 34% compared with 2022.

Meanwhile, the entire light-vehicle market, which includes passenger cars and light-commercial vehicles, is only predicted to rise by 9%. EVs are therefore expected to take a higher 16% share of the global light-vehicle market this year.

This market penetration rate is slightly lower than predictions made earlier in the year, especially as the 2023 EV share in China is now forecast to be 33%, down from 35% previously. However, over 300,000 additional EV sales are now expected globally in 2023, largely thanks to a stronger outlook for total light-vehicle sales in China.

EV uptake has weakened in North America, while recent subsidy cuts in European markets like Germany, Sweden and the UK have damaged demand, particularly for PHEVs. Accordingly, the global EV share is predicted to be lower throughout the decade than previously forecast, reaching 23.5% in 2025, then 45.3% in 2030, and 68.4% in 2035.

The unit volume of global EV sales is set to triple from 10.5 million in 2022 to over 31 million in 2027. It is expected to more than double to over 74.5 million units in 2035.

The number of EVs in operation will rise rapidly. But with 1.33 billion light vehicles currently on the road, EV-volumes forecasts that by the end of 2030, electric vehicles will only account for 15% of the global parc, assuming normal scrappage rates.

This will increase to nearly 30% by the end of 2035, with EVs only accounting for half of all operational light vehicles by 2042.

Tesla to take the EV lead from BYD

Once again, China is the main driver for global volume and growth. However, it is also the main source of forecast uncertainties, with economic headwinds hanging over the automotive sector alongside potential policy changes that could disrupt EV uptake.

Buoyed by the Chinese market and an increased PHEV offering, BYD overtook Tesla to become the world’s biggest EV manufacturer in 2022. For 2023, BYD is expected to deliver over three million EVs, compared to 1.8 million units for Tesla.

However, Tesla remains the largest BEV player globally. With the rollout of the refreshed Model 3 and the Cybertruck, as well as an anticipated compact crossover and hatchback in 2024 and 2026 respectively, it is forecast to be the leading EV maker globally from 2025.

Meanwhile, Volkswagen (VW) Group is expected to exceed the one million EV mark in 2024, with Hyundai Motor, General Motors (GM), and Stellantis expected to follow suit in 2025.

Lower European expectations

In Europe, better products, higher EV incentives and the 95g/km CO₂ mandate for average fleet emissions stimulated demand and supply beyond expectations in the second half of 2020 and 2021. BEVs and PHEVs accounted for 16.9% of Europe’s new light-vehicle market in 2021, before reaching 20.7% in 2022.

The volume of EV sales increased by 15% in 2022 while Europe’s total light-vehicle market declined 6% year on year. For 2023, European EV sales can be expected to gain a further 15% over 2022, supported by a brisk light-vehicle market recovery of 11.3% year on year.

PHEV numbers are retreating, meaning BEVs are broadly responsible for year-on-year growth. The all-electric powertrain is expected to see another year of 30% volume growth, trending towards a 70% share of the 2023 EV market.

EV-volumes has improved its outlook for total European light-vehicle sales but lowered its EV share and volume expectations. This is because of the lacklustre performance of PHEVs, the end of incentives for non-private buyers in Germany, as well as the UK extension of the new-car internal-combustion engine (ICE) ban from 2030 to 2035.

While new tax rebates in Spain will support higher EV uptake, the net effect will not be enough to balance out the negative influences. Europe’s EV market share is now forecast to reach 21.4% in 2023, climbing to 31.1% in 2025, then 68.6% in 2030, and 94.9% in 2035.

The forecast for 2035 includes some tolerance for timing interpretations of the zero-emission vehicle (ZEV) mandate in the EU and UK. It also allows for exemptions for ICE vehicles that may be deemed unsuitable for full electrification.

The EU zero-emission mandate for 2035 still leaves room for e-fuels, with support mounting in Austria and Germany for example. So, the BEV share forecast has been lowered slightly in the later forecast years.

EVs sourced from China keep gaining ground in Europe, exemplified by surging sales for MG, particularly the MG4. With other Chinese players such as BYD extending their presence in the region, the share of EVs produced in China increased from 11% in 2021 to 16.6% in 2022. However, up to 60% of these EVs are Chinese exports for European brands.

This percentage is forecast to climb to 18.6% this year, before falling from 2024. This is because of Tesla ramping up production in Germany, alongside European carmakers localising production.

Chinese EV expansion

In China, the EV boom continued into the second half of 2022. This brought the EV market share to 26.7% last year versus 13.9% in 2021.

New-energy vehicles (NEVs) – including BEVs, PHEVs and hydrogen fuel-cell electric vehicles (FCEVs) – were given an official government target share of 20% by 2025, meaning the objective was reached three years early.

By 2030, the stated aim is for the NEV share to reach 40%, then at least 50% by 2035, which is an unlikely scenario for the long-term outlook. For 2023, EV-volumes forecasts a 33.4% EV share, with year-on-year volume growth of 35%, reaching 8.35 million units.

While EV-share expectations have been reduced, the resilience of the wider light-vehicle market means plug-in volume assumptions still exceed previous forecasts. This is despite an underwhelming economic recovery, post-COVID-19 restrictions, and an ailing domestic real-estate sector. However, this may also mean consumers are turning their attention back to vehicle purchases.

Our forecast for China is not restricted by target shares or capacity limitations. EVs are expected to account for 46% of light-vehicle sales in 2025, growing to 68% in 2030, and 83% in 2035. Growth rates suggest even faster electrification of the market, but caution remains due to high regulatory and economic uncertainties.

With recent policy reversals emphasising higher priorities, crackdowns on sectors with hyper growth are possible. EV-volumes’ Chinese figures cover retail sales (not wholesales) for both historic and forecast volumes, excluding exported units and inventory build-up.

The Chinese EV market has swung towards PHEVs in recent years. The powertrain accounted for 18% of all EV sales in 2021 and rose to 25% in 2022. This is largely the result of growing sales of BYD PHEVs and range-extended hybrids from Li Auto.

This trend is likely to persist, with PHEVs forecast to make up 31% of the EV mix this year. However, BEVs are likely to gain ground again from 2024 onwards.

A-segment (city car) EVs are particularly exposed to the turbulence in China, whereby their share of the EV market plummeted from 23% in 2021 to 15% in 2022. It is expected to decline further until the economy can overcome the prevailing headwinds.

Three key new models now dominate the segment, namely the Changan Lumin BEV, the Geely Panda Mini BEV, and the Wuling HongGuang Mini BEV. This has compounded the volume woes of OEMs such as BAW, Chery, Dongfeng, Great Wall, JAC, Leapmotor, and SAIC.

The A-segment is also being squeezed by consumers buying new B-segment (small car) EVs in their droves, such as the BYD Dolphin and Seagull, as well as the Wuling Bingo. The A-segment share of the Chinese EV market is forecast to halve this year, falling below 8%. Meanwhile, the B-segment is expected to jump from a share of 1.7% in 2022 to 5.5%.

North American fall

North America, including the US and Canada, saw EV sales increase by 48% year on year in 2022, following 100% growth in 2021. The EV share of light-vehicle sales is forecast to reach 19.5% in 2025, increasing to 45% in 2030 and 77% in 2035.

In terms of the BEV-PHEV mix, all-electric models are expected to account for 80.5% this year, rising to 88.1% in 2025, then 95% in 2030, and 98% in 2035.

The Inflation Reduction Act (IRA) supports further EV growth in the US, even if compliance with upcoming battery and material-sourcing requirements remains unclear for many EV entries. The IRA is assumed to stay effective until 2032.

The incentives for producing vehicles and batteries in the region remain strong but also imply handicaps for imported brands and models. However, there is a loophole whereby imported EVs can qualify if they are leased instead of purchased.

Furthermore, strikes by the Union of Auto Workers (UAW) have highlighted the risk that EVs may pose to domestic OEMs and jobs, which may shift consumer sentiment.

Alongside the comparatively slow growth in EV uptake so far this year, EV-volumes has reduced its growth forecast to 48% for 2023, with 1.64 million units equating to a 9.5% share of light-vehicle sales.

While the overall market recovery is stronger than expected, the EV share and volume forecasts for 2023 to 2025 have been lowered following confirmations of capacity constraints for several popular models.

The medium and long-term forecasts have not changed significantly. EV growth is supported by localised product portfolios and expansion into the popular full-size SUV and pick-up segments. This includes the Ford F-150 Lightning, Chevrolet Silverado, Equinox and Blazer, Jeep Recon and Wagoneer S, Ram 1500, and VW’s Scout brand.

Non-triad rise

The non-triad region includes Asia (excluding China), Eastern Europe, Middle East and Africa, Central and South America. This market saw EV volumes rise sharply for a second consecutive year in 2022, albeit from a low base.

This was thanks to better availability of products, higher EV incentives, and lowered import tariffs in some countries. The strong recovery of the wider light-vehicle market since 2020 has also contributed.

Combined EV sales in the non-triad markets hit 292,000 units in 2021 and reached 554,000 units in 2022, with growth of 90%. The largest contributors were South Korea (over 55,000), Japan (over 51,000), India (over 35,000), and Australia (over 20,000). Other beacons were Hong Kong, Taiwan, and New Zealand, which are all small vehicle markets but have a high EV share.

Nevertheless, the combined EV share sat at just 1.9% in 2022 as large vehicle markets like Japan, Russia, Turkey, Brazil, Argentina, Mexico, and the ASEAN (Association of South East Asian Nations) countries still sell very few electric vehicles relative to their market size. This also pulled down the global average EV share, as the non-triad countries account for over 35% of the world’s light-vehicle sales.

However, the potential in these markets is increasing, as lacklustre economic growth in China is likely to favour many of the non-triad economies. Increasing EV export volumes from China and localisation plans by Western, Chinese, and Japanese OEMs for EV and battery production, provide strong encouragement.

Many developing countries impose high tariffs on vehicle imports. Unless EVs are exempt, these countries will need to develop their own EV industry to catch up with the adoption in mature markets.

For 2023, we expect an EV share of 3.2% in the non-triad countries and just over one million EV sales. The EV share is forecast to hit 6.5% in 2025, reaching 16.6% in 2030 and 41% in 2035, trailing global EV adoption by about six years.

Global EV Sales for 2023 H1

Global EV sales continue strong. A total of 6 million new Battery Electric Vehicles (BEV) and Plug-in Hybrids (PHEV) were delivered during the first half of 2023, an increase of +40 %. 4,27 million were pure electric BEVs and 1,76 million were PHEVs. Preliminary July results show +40 % growth again. The regional growth pattern has shifted: China EV sales increased by +37 % in 2023 H1 y/y, compared to +82 % in 2022 vs 2021. Sales in Western and Central Europe were up +28 % in H1 compared to just +15 % growth in 2022. EV sales in USA and Canada are +50 % higher YTD to June than last year. EV sales outside the aforementioned markets increased by 102 %, albeit from a low base. Overall vehicle markets saw a considerable recovery, with +17 % y/y growth in Europe in H1 but weaker and more volatile in China. The global light vehicle market was 11 % higher in 2023 H1 than in 2022 H1 but still trailed the 2015-2019 average by five million units on an annualized basis.EV shares continued to climb in all markets. BEVs (10 %) and PHEVs (4,1 %) stood for 14,1 % of global light vehicle sales at the close of H1, compared to 11,3 % in 2022 H1. Norway had the highest market share of EVs in H1 (BEVs 75 % + PHEVs 6 %), China had 30,5 %, Europe 19,7 % and USA 8,7 %. The fastest growing markets were Indonesia with 6000 BEV & PHEV units for H1, +886 %, Thailand with 39 500 units, up +370 %, Turkey with 12 300 units, up +326 % and Australia with 47 400 units, up +248 %.

PHEVs stood for 29,6 % in the BEV-PHEV mix in 2023 H1 compared to 27,2 % in 2022. The PHEV volume increase was 891 000 units in H1, most of it (754k) in China. High sales of BYD PHEVs and the renaissance of Range Extender Electric Vehicles (EREVs) are the main reason. Also, mini-EVs like the Wuling Hongguang found fewer buyers in a tougher economic environment. As they are all BEVs their decline is dragging down the BEV share within China’s New Energy Vehicle (NEV) volume.

BYD nearly doubled H1 sales to 1,25 millionb units, making it #1 in the global EV sales ranking, with their 633 000 PHEV sales included. Counting BEVs only, Tesla still leads by a wide margin with 889 000 units delivered in H1.For the full year of 2023, we expect sales of 14 million EVs, growth of +33 % over 2022, with BEVs reaching 10 million units and PHEVs 4 million units. By the end of 2023 we expect 40 million EVs in operation, counting light vehicles, 70 % of which are BEVs and 30 % PHEVs. Sales of Fuel Cell Vehicles (FCEV) in the light vehicle sector have declined by -25 % so far this year and remain below 20 000 units annually. Current sales are from five vehicle models and most sales are in South Korea and USA. We estimate their current population to be about 60 000 units.

EVs gain further share in a broad auto market recovery

Global sales of BEVs and PHEVs have grown by 40 % in H1, supported by a broad recovery of total auto sales, posting a 11 % increase, so far. The 2023 numbers compare to depressed sales during 2022 H1. Meanwhile, the buyers market has returned. Component supply constraints have eased, vehicle inventories are replenished and vehicle prices are coming down, despite high inflation in other sectors. H1 delivery volumes were further supported by pent-up demand and by fulfilling accrued orders. We expect lower y/y volume increases for the remainder of the year. Europe’s EV demand is of CO2 mandates and receives less support from OEMs and by direct subsidies, which were slashed in several countries. Circulation tax incentives are mostly intact, however. The 28 % y/y EV growth is helped by a 17 % increase in overall vehicle sales. China NEVs sales have lost their central subsidy, while the 10 % purchase tax exemption stays until further notice. Regional price wars among EVs and ICEs alike have boosted sales numbers in Q2, more than compensating for the losses in Q1. NEV sales (+37 % y/y) grew 7 times faster than total light vehicle sales (+5,2 % y/y) during H1 and reached a market share of 33 % in June. EV sales in USA and Canada combined were +50 % higher than last year, in a +12 % larger light vehicle market. USA alone had +54 % growth in H1, Canada +16 %. Considering that the 2022 vs 2021 EV sales growth was as high as +50 % in the US, the real impact of the 2023 Inflation Reduction Act (IRA) is yet to be seen. The non-triad markets combined had the highest % gains in EV adoption (+102 %), most of them from a low base. The largest market in this group is South Korea with 82 400 BEV+PHEV sales YTD June and an EV share of 11 %. Next is Japan with 73 700 EV sales YTD, +112 % EV growth and 3,1 % EV share. The EV share in all non-triad countries combined is only 2,8 % in 2023 but growing fast now.

Consolidation in China

At the top, BYD sold nearly twice as many BEVs + PHEVs compared to 2022 H1. BYD is the largest maker of PHEVs and the second largest maker of BEVs. The company currently sells 17 BEV models and 8 PHEV models. Tesla leads global sales of BEVs by a large margin, with a share of 20,8 % in all BEVs sold worldwide. With a H1 growth of +57 %, Tesla gained EV sector share again, as did BYD. Some EV OEMs prioritize volume and market share growth, like BYD, Tesla, GAC (Aion) and Li Auto. Or they protect the tight margins they may have on EVs, like VW, Stellantis, Hyundai, BMW, NIO and Volvo. Insufficient battery supply hold back Ford and GM. Many others face dire straits, neither growing volumes, nor breaking even, with no profitable ICE sales to back them up. The H1 results for volumes and growth indicate distress for several Chinese OEM in the top-25 ranking. The “Other OEM” portion contains a further 25 companies with decreasing and unsustainably low sales volumes. 11 % of China’s NEV production, 428 000 units Passenger Cars and LCVs, were exported during 2023 H1, mostly BEVs. 2/3rd of these exports were Non-Chinese brands, with Tesla (166k), Volvo-Polestar (49k) and Renault (Dacia, 27k) leading. Chinese brands stood for 149 000 NEV exports during the first half of this year, nearly 3 times the volume of 2022 H1. The strongest exporters are SAIC (MG, Maxus, 80k), BYD (42k) and Geely, if 18k Lynk & Co are included.

Tesla and Chinese brands dominate the Top-10

The Tesla Model-Y leads the global EV sales ranking by a significant margin. It is now also the world’s best selling vehicle of all categories, including ICEs. The Model-Y is produced in USA (Fremont, CA and Austin, TX) in China (Shanghai) and in Berlin (Germany). The Model-3 recovered from the initial cannibalism by the Model-Y in 2022 and starts growing again. In the sedan category, only Toyota’s Camry and Corolla had higher sales in H1, at significantly lower retail prices than for the Model-3. BYD has four models in the top-10, two mid-size PHEVs and two compact BEVs, introduced in 2022. The Yuan Plus is BYDs leading export model, with 37 100 units sold outside China. The compact cross-over is known as the Atto-3 in most export markets. GM-Wuling’s Mini EV sales saw a significant decline, as the A00 segment stagnates and new players have entered it. GAC (Guangzhou Automobile, state owned) has entered the top-10 with two models of it’s Aion brand. The Aion-S is a mid-size BEV sedan, the Aion-Y is a compact BEV cross-over. The VW ID.4 is the best selling model from a European brand. Sales include the ID.4 X and ID.4 Crozz made by VW’s joint ventures with SAIC and FAW in China.

Outlook for 2023

We expect global sales of 14 million BEV and PHEV for the full year of 2023. The EV market share reaches 16 % in a total light vehicle market of 87,5 million units. EVs grow by 33 % in a total market up 7,5 %. In China, our forecast is 8,1 million NEVs (BEVs & PHEVs) for a share of 34,7 % in Light vehicle sales. The current sales trend would suggest an even higher number but we remain cautious about the China economy. Recent news and data are not suggesting a broad post-covid recovery, rather the opposite. For Northern America (USA & Canada) we expect 1,7 million units and 55 % growth over 2022. The EV incentives from the Inflation Reduction Act (IRA) should boost sales further but domestic OEM (except Tesla) are slow to seize the market opportunities, plagued by inhouse battery supply shortages and/or highly unprofitable EV sales. Imports do not receive the IRA grants. Europe’s EV adoption is ahead of CO2 mandates and there is little inducement for legacy OEMs to push EV sales with small or negative margins. Direct EV incentives are being reduced but tax savings still are intact in most countries. We expect 19 % EV growth to 3,2 million units sales and a market share of 22,5 %. The main growth drivers so far are Tesla, Chinese imports, Volvo-Polestar the VW brand and the strong recovery of total vehicle sales in H1. We expect the effect of the latter to wane in H2. Many of the Non-Triad countries have entered a high growth trajectory, supported by EV exports from China, mostly by Tesla. EV sales in Indonesia, Thailand, Turkey, Australia and Brazil, all large vehicle markets, have grown by +200 % and more in H1-2023, starting from very low levels. Inhibitors for catching up with the Triad regions are high import duties and the absence of a domestic EV industry.

40 Million EVs On The Road at 2023 Year End

Adding this year’s 14 million BEVs and PHEVs to the existing stock gets the number of EVs in operation to nearly 40 million, word-wide, counting Light Vehicles. With ca 1,3 billion light vehicles in operation, this is still just 3 %. Counting BEVs only it is 2,1 % of the global fleet. The number of vehicle on the road worldwide is increasing by 40 million cars and light trucks every year. This year, 10 million of this increase (25 %) are BEVs. The other 30 million vehicles entering the fleet (75 %) are still burning petrol or Diesel. In a scenario towards 100 % zero-emission in global new vehicle sales in 2045 (as an example for the math), the total number of vehicle in operation reaches 1,8 billion in 2045. By then, 40-45 % of this stock are BEVs, but the sobering truth is also that, with current scrapping rates, the majority of the worlds Light Vehicles still need to burn fuels in 2045. The full transition to BEVs needs to accelerate, because the positive impact on CO2 emissions comes with a considerable delay. Fast EV adoption is a prerequisite for sustainable personal mobility.

Tesla models lead Europe’s EV market in first half of 2023

Europe’s electric vehicle (EV) market is continuing to grow rapidly with impressive figures in June. José Pontes, data director at EV-volumes.com, considers the numbers.

Europe saw over 311,000 EV registrations in June, up 42% on the same month in 2022. But the overall market also grew quickly, up 19% year on year.

Electric vehicles made up 25% of all new-car registrations in Europe (encompassing the EU, UK and EFTA markets). Battery-electric vehicles (BEVs) alone held a 17% share after the number of newly registered units increased 57% year on year.

Meanwhile, plug-in hybrids (PHEVs) recorded their highest rate of growth this year at 17%, ending the month with close to 100,000 units. This meant BEVs accounted for the vast majority of EV sales in June at 68%, while PHEVs made up the remaining 32%.

Tesla in first and second

For the eighth month in a row, the Tesla Model Y was the best-selling EV in Europe. In June, the midsize model recorded 33,523 registrations. It benefitted from competitive pricing and a balanced ratio of supply and demand, meaning quick deliveries.

The crossover can be expected to continue posting similar results in the coming quarters in Europe. However, this is unlikely to significantly exceed current volumes, as the Model Y may have already reached the market’s natural limit.

The Model Y’s biggest European markets in June included Germany (6,098 units), France (4,335), Norway (3,127), the UK (5,500 units), Sweden (2,408 units), Denmark (2,164), and the Netherlands (1,778 units), while Belgium also had a high number of deliveries at 1,300 units.

The Tesla Model 3 finished the month in second with 14,163 registrations. Sales can be expected to rebound once the brand’s refreshed version lands. However, how much volume this might add is up for debate.

The distribution of deliveries was more irregular than for the Model Y, with bigger markets like France (3,966 units), the UK (1,962 units), Germany (1,668 units), and Italy (1,010) taking the largest chunk of sales.

In third, the Volkswagen (VW) ID.4 recorded 10,252 registrations in June. Increased production availability is the result of localised output in the US and the start of manufacturing in Germany. The ID.4 now has enough momentum to compete for second place in 2023, hoping to move up from third place in 2022. The ID.4’s main market in June was Germany (3,754 registrations), followed by Norway (1,176 units), the UK (1,016 registrations), and Sweden (972 registrations).

Without reaching the sales levels of previous months, the Fiat 500e made it to fourth, with the new Abarth hot hatch version likely helping with this uptake. At 7,954 sales, the best-selling city car is currently in recovery mode after a slow start to the year.

Germany was its largest market, with 3,004 registrations, followed by France (2,781 registrations) and then Italy (452 registrations). This last result might seem a little low, given Itay’s love for domestic brands and small cars, but this probably has more to do with the country’s slower EV transition.

The MG4 earned another top-five spot in June with 7,799 registrations, cementing a new record for the model. With a purposeful look, good handling, and reasonable interior materials, the hatchback has been performing well since its launch, offering a budget option to EV motoring.

The model’s main markets were the UK (2,213 registrations) and France (2,511 registrations), two big hatchback locations. The remaining countries ended some distance behind, such as Germany with 928 registrations.

Other highlights in June included the sixth-place Skoda Enyaq, which celebrated a record performance of 7,119 registrations. The Renault Megane EV had a positive result, ending in 10^th with 5,032 registrations, making it the best-selling French model in this table.

The second half of the table also witnessed notable performances, like the BMW iX1 scoring its second-record result in a row with 4,158 registrations, placing it in 16^th. The Kia EV6 achieved a best-ever result of 3,892 units, making it the best-selling Korean model on the table.

Below the top 20, there were several other positive performances, such as the MG ZS EV hitting 3,032 units, its best result in two years. Meanwhile, VW Group had two wins in the full-size category. The Audi Q8 e-Tron took the highest podium position in the category with 2,875 registrations, the model’s best score since its name changed, then the Porsche Taycan came in second, with 2,473 registrations.

Stellantis recorded several solid results from the Opel Corsa EV (3,072 units), the Opel Mokka EV (3,587 registrations), and the Peugeot e-2008 EV (2,688). But the highlight was the Jeep brand, with the Avenger EV scoring 1,206 deliveries in its second month on the market. The model is due to start knocking at the door of the top 20 in a few months.

Three times the deliveries

In the first half of 2023, the Tesla Model Y recorded three times as many deliveries as the second-place Model 3. But the Tesla sedan will likely have a hard time holding onto this position, as both the Volvo XC40 and the VW ID.4 were fewer than 2,000 units behind. While the Volvo may start suffering from comparisons with the new EX30 soon, the German crossover will surely be a tough adversary.

Elsewhere, the Fiat 500e rose to sixth, putting distance between itself and the 10^th-place Dacia Spring, its direct competitor in the city car category. Renault’s Twingo EV and Zoe are showing their age, the Megane EV is trying to fend off its competitors, and the Nissan Ariya is selling below expectations (under 1,000 units a month). This means the Renault–Nissan alliance needs a sales champion to avoid an over-reliance on the Dacia Spring.

In this context, Renault’s decision to end the production of the Zoe by next March appears strange. This is because its successor, the Renault 5, is reportedly set to hit the market by the end of 2024, assuming there are no delays.

In the second half of the table, the Polestar 2 jumped two places up to 18^th, with hopes of reaching the 16^th-place BMW i4 by the end of the year. In the midsize category, the Kia EV6 rejoined the table in 20^th, replacing the Lynk & Co 01 PHEV. This means there are now only two PHEVs in the top 20, the 12^th-place Ford Kuga PHEV and the 14^th-place Volvo XC60 PHEV.

While the Tesla Model 3 has three direct competitors on the table (BMW i4, Polestar 2, and Kia EV6), the Tesla Model Y has effectively dried out its direct competitors. The only other midsize crossover/SUV in the top 20 is the Volvo XC60 PHEV, which appeals to a different demographic.

Unlike the Model 3, the Model Y does not have direct competition coming from local heavyweights. For example, Audi is yet to release the Q6 e-Tron and the Mercedes-Benz EQC is four years old. The only model that could approach the Model Y in Europe (and North America) is the Ford Mustang Mach-E. But Ford’s current production constraints and high pricing are preventing the model from pushing past its current volumes.

Out in front

In the brand ranking, Tesla was comfortably out in front in June with a 13.1% share, up 0.7% compared to May. VW took the runner-up spot with an 8.5% share, up 0.2% compared to the previous month.

Third-place BMW (7.9%) gained an advantage over Mercedes-Benz (7.4%, down from 7.7%), but with only a slim margin separating the two, a lot could still happen. Finally, Volvo (6.2%, down from 6.5%) was comfortable in fifth, with sixth-place Audi (5.3%) and seventh-place Peugeot (4.7%) some distance behind.

Arranging things by automotive groups, bringing individual brands together under their parent company, VW Group’s share was up to 19.9%, keeping a comfortable lead over new runner-up Stellantis (14.3%, up 0.4% from May). Tesla jumped from 12.4% to 13.1% and can be expected to go after second place in the latter half of 2023.

In fourth, BMW Group was stable at 9.5%, while in fifth, Geely–Volvo suffered from poor performances from Volvo and Lynk & Co, dropping to a share of 8.7%. In sixth, Mercedes-Benz was some distance off (8.3%, down from 8.6%) and seventh-place Hyundai–Kia was stable at 8.2%, meaning Geely should remain in fifth during the next few months.

Global EV Sales for 2022

Global EV sales continued strong. A total of 10,5 million new BEVs and PHEVs were delivered during 2022, an increase of +55 % compared to 2021. The regional growth pattern is shifting, though. Following 2 years of steep sales increases in Europe, EVs gained only +15 % over 2021 there. Weak overall vehicle markets and persistent component shortages have taken their toll, exacerbated by the war in Ukraine. EV sales in USA and Canada increased by 48 % year-on-year, despite a weak overall light vehicle market which plunged by 8 % during 2022 y/y. The 2nd half of 2022 saw a cautious recovery of auto markets as numbers compared to the low results of 2021 H1. Global light vehicle sales for 2022, 81 million units, were still -0,5 % lower than in 2021 and -15 % below pre-2020 levels.

China NEV sales defied all headwinds the country faced otherwise (real estate crisis, Covid outbreaks and lock-downs) and increased by another +82 % year-on-year. BYD more than tripled sales to 1,85 million units, making it the #1 in the global sales ranking, if their 944 500 PHEV sales are included. Counting BEVs only, Tesla still leads by a wide margin with 1,31 million units delivered in 2022.

PHEVs stood for 27 % of global Plug-in sales in 2022 compared to 29 % in 2021. While their sales volumes still increased, their share in the PEV mix is in decline, facing headwinds from incentive cuts and improving BEV offers. Sales growth is increasingly depending on the degree of electrification. While BEVs grew by +59 % and PHEVs by +46 %, non-chargeable Full Hybrids grew by +15 % and Mild Hybrids by +1 % y-o-y. Global sales of vehicles which can be charged from the grid (10,5 m) were higher than for non-chargeable vehicles (8,4 m) for the first time in 2022. ICE-only vehicle sales declined by -7 %; their share in global light vehicle sales is 76,8 %, compared to 82,2 % in 2021. FCEV remain irrelevant for the electrification of light vehicles; their deliveries stagnated at 15 400 units in 2022, which is 0,02 % of the global, annual light vehicle volume.

Rapid EV adoption in weak auto markets has boosted EV shares further. BEVs (9,5 %) and PHEVs (3,5 %) stood for 13 % of global light vehicle sales in 2022, compared to 8,3 % in 2021. Norway had the highest market share of EVs in H1 (BEV 71 % + PHEV 8 %), China had 27 %, Europe 20,8 % and USA 7,2 %. The fastest growing markets were Indonesia (from 1k to 10k), India with +223 % to 50k, nearly all BEVs, New Zealand +151 % to 23k for 20 % market share. EV supply and adoption is now spreading rapidly into the global south. November and December of 2022 saw demand distortions by coming reductions of EV grants in Europe and China and the IRA in the US for 2023. Demand for EVs and ICEs alike were pulled into 2022 or pushed into 2023. We expect irregular EV sales and shares in several countries for Q1 of 2023. For the full year of 2023, we expect sales of 14,3 million EVs, a growth of 36 % over 2022, with BEVs reaching 8 million units and PHEVs 2,6 million units. By the end of 2023 we expect nearly 40 million EVs in operation, counting light vehicles, 73 % are BEVs and 27 % PHEVs.

EVs Resilient to Market Declines

Most mature auto markets experienced double-dips in sales during the 2020 through 2022 period. Following the Covid crunch of 2020 and a +5 % recovery in 2021, 2022 sales dipped again, by 0,5 % vs 2021, with mature economies losing 5-10 % of auto sales. Meanwhile, most developing economies, notably India and the ASEAN countries continuing a their strong recovery.

EV sales were resilient to weak auto markets: They over-performed by 21 % in Europe, by 87 % in China, by 55 % in Northern America and by 78 % in the Non-Triad markets. While global light vehicle sales lost -0,5 % y/y, BEVs and PHEVs increased by +55 %. The relative weakness in Europe’s EV growth relates to the EV boom in 2020 / 2021 and the repercussion from the war in Ukraine.

China is, by far the largest EV market, with 59 % of global EV sales in 2022. Their role as the largest EV production base is even stronger, with 6,7 million units, 64 % of global volume, made in China. Nearly 580 000 EVs were exported from China, most of them (407k) by Western brands. The largest exporters were Tesla, SAIC, Dacia, Polestar, Volvo, Lynk & Co, BMW and BYD. All others exported below 10 000 units each.

OEM Ranking for BEV & PHEV Deliveries

Robust increases of EV sales enabled nearly all OEMs to grow their sales in 2022. Global EV deliveries increased by +55 % y/y in total; OEMs with higher growth have increased their share in the EV sector.

BYD sold over 3 times as many BEVs+PHEVs compared to 2021, by boosting sales of existing models, successfully introducing new models and by entirely focusing production and sales on BEVs and PHEVs. Non-chargeable variants were phased out, ending in April 2022. BYD is now the largest maker of PHEVs and moved from rank #3 in 2021 to #1 for BEVs & PHEVs combined.

Tesla leads global sales of BEVs by a large margin, with a share of 17 % in all BEVs sold worldwide. Year-on-year growth was +40 %, less than for the sector, but from a high base.

The VW Group increased EV sales by just +10 %, staying flat in Europe compared to last year; BEVs gained, while PHEVs lost. Growth in China was +44 % y/y and +18 % in North America. The most popular EVs from the group were the VW ID.4, the ID.3, the Skoda Enyaq and the Audi Q4 e-tron, all of them BEVs and all MEB based.

The Wuling Mini EV has reached it’s sales peak; GM gained only +13 % for that reason. Excluding the Mini EVs, GM’s combined growth for EVs was +68 %.

Stellantis gained EV sector share in Europe and USA but with a small presence in China, Stellantis could not participate in the high growth there. The +34 % volume gain is still better than for many other western OEM.

Top-10 Dominated by Tesla and Chinese Models

Tesla has a new best-seller, the Model Y, not only in the EV sector, but within all SUVs and Cross-Overs in this category, including ICEs. Household nameplates like the Toyota Highlander, Ford Explorer, BMW X3, Mercedes GLC, BYD Song, etc. usually sell 300-400 000 units per year globally. The Model Y reached 771 000 units in 2022, far more than any other ICE vehicle in this size and price bracket. The Model-3 took a beating, though, as Tesla prioritized production of the more sought after and more profitable Model Y. Still, the Model-3 outsold the Wuling Mini-EV last year for the first time.

GM-Wuling’s Mini EV sales stagnated as it faces more competition from similar concepts like the Chery QQ and other ultra-cheap mini commuters.

BYD had 6 models in the global top-10, with the Song, Qin, Han and Tang as the world’s four best selling PHEVs; a legacy from their regular ICE business which BYD abandoned in April last year. The Song PHEV is a mid-size SUV of 470cm length / 168cm height, the starting price was 153 000 RMB in 2022, less than half of a Tesla Model Y. There is a Song BEV variant with 71 kWh battery capacity for 180 000 RMB, which sold 67 000 units in 2022. The newcomers Dolphin and Yuan Plus had a flying start and are exported in larger numbers now.

The VW ID.4 is the best selling model from a European brand. Sales include the ID.4 X and ID.4 Crozz made by VW’s joint ventures with SAIC and FAW in China.

Outlook for 2023

Elevated fuel prices, concerns about climate change and energy security continue to support higher EV demand. Supply is catching up with demand now and waiting times are coming down. OEMs are reducing prices where margins allow, which improves affordability as a further catalyst for higher sales. We expect 14,3 million EV sales in 2023 with a market share of 17 % in global light vehicle sales. EV sales grow by +36 % in a global light vehicle market increasing +5 %.

For China we expect an NEV share of 35 % with volume growth of 30 % y/y to 8 million units BEVs & PHEVs, which is in line with e.g. CPCA expectations. The central NEV grant was dropped for 2023, but the purchase tax exemption stays for NEVs. Other stimuli for more private consumption could follow, if the economy develops below growth targets. The real NEV incentive is still the favorable allotment of number plates, which is restricted for ICEs in metropolitan areas.

For USA and Canada combined we expect BEV & PHEV sales to grow by +71 %, for a share of 11,5 % in total light vehicle sales. The IRA will stimulate EV growth in USA, favoring EVs produced in the North American region. The compliance with coming battery and material sourcing requirements is still unclear for many EV entries, however. BEVs and PHEVs assembled in USA, Canada and Mexico stood for ca 77 % total PEV sales in the US last year, up from 73 % in 2021.

Subsidy cuts and achieved CO2 compliance dampen the volume and share growth for EVs in Europe compared to the 2020 and 2021 boom. For 2023 we still expect Europe EV sales to increase 26 % over 2022 as EV tax incentives vs ICE vehicles stay intact in most counties. Over 60 new BEV and PHEV entries are expected for 2023, offering more choice and value improvements. Pure-play EV makers will see high growth as many legacy OEM prioritize margins instead of maximizing sales.

Fast but not fast enough

The number of EVs in operation world-wide reached nearly 27 million at the end of 2022, counting light vehicles. With ca 1,5 billion light vehicles in operation, this is still just 1,8 % of the global fleet and 1,3 % counting BEVs only. At the end of 2023 the BEV share reaches 2,5 % of light vehicles in operation.

The number of light vehicle on the road worldwide increases by 40 million units on average every year, as many as the entire current vehicle population of the UK. Last year, 8 million of this increase (20 %) were BEVs. The other 32 million newcomers (80 %) are still burning petrol or Diesel.

In a scenario towards 100 % zero-emission global light vehicle sales in 2045 (as an example for the math), the total number of BEVs in operation reaches 1,1 billion, while the total number of vehicles in operation reaches 2 billion in 2045. By then, over 55 % of the stock are BEVs but the sobering truth is also that, with current scrapping rates, over 40 % of vehicles in operation still need to burn fuels.

The full transition to BEVs needs to accelerate, because the positive impact on CO2 emissions comes with a considerable delay. Fast EV adoption is a prerequisite for sustainable personal mobility.

Will phase-out of incentives threaten EV uptake in Germany?

Germany is phasing out electric-vehicle (EV) incentives. Autovista24 senior data journalist Neil King considers the implications for total cost of ownership (TCO) and market electrification.

Germany ended government incentives for plug-in hybrids (PHEVs) on 31 December 2022 and is reducing subsidies for battery-electric vehicles (BEV) between 2023 and 2025. Incentives will only remain available for private buyers from 1 September 2023.

The registration date of a vehicle also determines its eligibility for the subsidies, and this is where current supply-chain disruptions and semiconductor shortages come into play. Delivery times for new vehicles have increased and a waiting period of a year has become the norm rather than the exception.

The TCO impact depends on the models in question, the age-mileage scenario, as well as fuel and electricity costs. The effect on depreciation and leasing rates can be significant too.

This would suggest that the electrification of the German new-car market will decelerate, however, the withdrawal of the Plug-in Car Grant (PiCG) has not slowed EV uptake in the UK. Furthermore, tax benefits remain in place for company-car buyers in Germany and more EV models are coming to the market.

TCO analysis

Comparing the Mercedes-Benz EQA BEV against the PHEV, diesel, and petrol variants of its GLA sibling, the TCO of the EQA and the GLA PHEV was about €5,000 lower than for the diesel in 2022 over 36 months and 60,000km. Compared to the petrol GLA, the savings amounted to more than €8,000.

TCO comparison: Mercedes-Benz EQA versus GLA PHEV, diesel and petrol variants (including 2022 incentives)

*Source: Autovista Group Car Cost Expert*

On 1 January 2023, the government incentive for the EQA reduced from €5,000 to €3,000 and the GLA PHEV is no longer eligible. Furthermore, manufacturers are only obliged to grant 50% of the government part for BEVs and €0 for PHEVs. So, the EQA and GLA PHEV are entitled to incentives amounting to €4,500 and €0 in 2023 respectively in this analysis. Consequently, the EQA now has a TCO advantage of almost €4,000 over the GLA PHEV, but the advantage over the diesel and petrol versions is reduced to only €1,000 and less than €5,000 respectively.

A key caveat is that utilisation costs are increasingly becoming a focal point for TCO due to rising fuel and energy costs. High electricity prices threaten to derail the attractiveness of BEVs and PHEVs but, conversely, rising fuel prices have the potential to negatively impact the TCO of internal-combustion engine (ICE) models.

TCO comparison: Mercedes-Benz EQA versus GLA PHEV, diesel and petrol variants (including 2023 incentives)

This TCO analysis does not factor in discounting, which could lower the TCO of the diesel and petrol variants of the GLA to below that of the EQA.

‘We expect that OEMs will be hesitant to decrease list prices to compensate for the loss of cost advantage because list-price increases are risky, and it will be not so easy to raise prices again if circumstances should change. Rather, we expect more hidden discounts such as cheap leasing and financing offers to boost sales,’ explained Andreas Eggerth, senior market analyst at Autovista Group.

No discernible impact in UK

In June 2022, the UK government pulled the plug on the PiCG, which offered up to £1,500 (€1,740) off the cost of a new BEV. Transport Minister Trudy Harrison claimed the country’s electric-car market has been successfully kick-started and signalled the need to send funds elsewhere.

The UK’s Society of Motor Manufacturers and Traders (SMMT) underlined the poor timing of the decision. With rising fuel prices and supply shortages exacerbated by the war in Ukraine, more consumers were considering an electric vehicle.

The BEV incentive offered in the UK was significantly lower than in Germany but the £1,500 price increase aligns with the €3,000 hike for the Mercedes-Benz EQA since 1 January 2023. Conducting the same TCO analysis in the UK shows that the EQA has a higher TCO than the PHEV and ICE versions of the GLA.

TCO comparison: Mercedes-Benz EQA versus GLA PHEV, diesel and petrol variants

However, this disadvantageous TCO did not restrain the electrification of the UK new-car market in 2022. According to the SMMT, BEVs ‘comprised 16.6% of registrations, surpassing diesel for the first time to become the second most popular powertrain after petrol.’

PHEVs saw their share fall to 6.3% in full-year 2022, replicating the downward trend across Europe. Nevertheless, EVs accounted for 22.9% of new cars registered in the UK last year, up from 17.6% in 2021.

The penetration of fully-electric cars is far greater in the crucial fleet sector, which is responsible for about 50% of all new cars registered in the UK. ‘BEVs already dominate the order books of our sector, and could meet the 2030 phase-out early. BEVs have overtaken petrol among British Vehicle Rental and Leasing Association (BVRLA) members, and this will remain, assuming the government does not need to apply the handbrake, such as a change to the Benefit in Kind (BiK),’ said Gerry Keaney, chief executive of the BVRLA, at the association’s Fleets in Charge conference on 7 July 2022.

With fleets deriving demand for EVs, the SMMT forecasts 353,000 BEV and 130,000 PHEV registrations in 2023. Based on their prediction of 1.808 million new-car registrations, this gives respective market-share forecasts of 19.5% and 7.2%. The combined EV share is thus forecast to rise to 26.7% this year.

This forecast aligns with EV-Volumes.com, which forecasts that EVs will gain a 27.1% share of the UK new-car market in 2023, climbing further to 33.8% in 2024 and 42.4% in 2025.

Divergence in Germany

Considering the potential impact of the phase-out of incentives in Germany, Eggerth highlighted the need to ‘differentiate between PHEVs and BEVs as the situation is different for these fuel types.’

‘The PHEV market is driven by fleet sales. The withdrawal of the incentives is not expected to have a significant impact on PHEV sales. We still have very advantageous taxation for company cars, which is a more important influence and will help support sales figures for PHEVs. Private sales are more important for BEVs than PHEVs. With the end of incentives, there will be more pressure in the market and it will become harder to keep up sales figures,’ Eggerth explained.

The German new-car market ended 2022 on a high note, driven by a record number of electric-vehicle registrations. EVs made up 31.4% of all new-car registrations during 2022 – the equivalent of around 833,000 units. Among these, 470,600 were BEVs and 362,100 were PHEVs.

Combined registrations of BEVs and PHEVs amounted to 174,000 units in December alone – the first time more than half of newly registered cars were EVs. It is also noteworthy that more than 100,000 BEVs were registered in the month.

Given the pull-forward effect of EV registrations into 2022, along with the impact of lower incentives on new-car prices and TCO, Reinhard Zirpel, president of the association of international motor vehicle manufacturers (VDIK), is cautious about the potential for EVs in 2023.

‘At the end of the year, manufacturers, dealers, transporters, and registration offices created the conditions that enabled many EV customers to still secure the higher subsidy. In the coming year, the momentum will slow down considerably. We expect only about 800,000 new electric vehicles in 2023,’ he said.

However, Roland Irle, managing director of EV-Volumes.com, points to more positive influences on the electrification of the German market.

‘Many factors support a further increase in Germany, like the Tesla ramp-up combined with the recent price reductions of 4% to 17% depending on the model, to meet the price caps for grants. We see 55 new BEV and five new PHEV models entering the European market in 2023 and Germany usually gets them first. There will be value improvements en masse in them, with prices more civilised than during 2021/22, and there are still lots of unfulfilled orders too,’ he explained.

Taking these positive elements into consideration, Irle forecasts 975,000 EV registrations in Germany in 2023, equating to a market share of 34.3%. The EV share is forecast to rise further to 38.8% in 2024 and 45% in 2025.

Taxation, supply, and charging infrastructure

The upshot is that a proliferation of new EV models and attractive tax benefits for company-car drivers will continue to support electrification as governments seek to phase out incentives.

This is crucial for both governments and carmakers to achieve climate targets. Conversely, the share of new ICE cars is in sharp decline. Although this benefits the environment, it presents a financial problem as tax breaks for EVs mean revenues generated by the automotive sector are in retreat. Accordingly, Switzerland plans to tax EVs to plug the funding gap created by diminishing returns from fossil-fuel cars, and changes to vehicle-tax regimes across Europe will inevitably follow.

‘Governments and manufacturers now have a hard decision in front of them, because the charging infrastructure is also not prepared to manage high demand. In some countries, the infrastructure is suffering a lot because demand is higher than expected,’ said Alberto Jimenez, product manager, RV and TCO, at Autovista Group.

Finally, Eggerth cautioned that supply continues to dictate the volume of new EV registrations. ‘The further development also depends on when production will return to normal. With the new COVID outbreaks in China, the supply-chain crisis and semiconductor shortages are still a factor of uncertainty, making it difficult for OEMs to plan for the future and make long-term decisions,’ he concluded.

‘Overlooked’ manganese of growing importance as EV battery material

Manganese is not the first metal that springs to mind when thinking of electric-vehicle (EV) batteries. But the raw material is in high demand among car manufacturers, with automotive giant Stellantis recently signing a deal to secure access to the metal.

As part of the five-year agreement, Australian miner Element 25 will supply battery-grade, high-purity manganese sulphate monohydrate to Stellantis to be used in battery packs. Shipments will begin in 2026, including a total volume of 45 kilotons, with options to extend the supply term and volumes.

The deal is another example of how carmakers are ramping up efforts to ensure long-term supplies of critical raw materials needed to build electric vehicles. After all, global EV demand is expected to surge this decade as manufacturers, especially in Europe, prepare themselves for mass adoption.

Decarbonised EV battery materials

Stellantis expects 100% of its passenger-car sales in Europe to be battery-electric vehicles (BEV) by 2030. Meanwhile in the US, the company aims for 50% of its passenger-car and light-duty truck sales to be BEVs in that same timeframe.

The carmaker has been scouring the EV battery scene for suitable partners that can help it fulfil its electrification goals. Last year, it inked a deal with GME Resources, which will provide battery-grade nickel and cobalt sulphate to bolster the automotive manufacturer’s supply chain for EV battery production.

Stellantis, which ranks among the top three carmakers worldwide, also secured a supply of lithium by bagging a deal closer to home with German-Australian Vulcan Energy – a supplier promising to deliver ‘green lithium’ sourced in Europe.

The carmaker is eager to work with companies that provide decarbonised and low-emission battery raw materials. Australia-based Element 25 is the latest firm to join forces with Stellantis in this regard. The miner will source manganese from its Butcherbird project in Western Australia, with plans to build a processing facility in the US.

Element 25 managing director, Justin Brown, said the project in Australia would deliver more sustainable battery-grade manganese to the electric-vehicle industry. In Europe, the EU is eager to make EV batteries safer and more circular, as carmakers face the looming 2035 phase-out of new internal-combustion engine car sales.

Last month, the Council and the European Parliament struck a provisional agreement to introduce sustainability requirements for batteries from 2024. This will cover the carbon footprint, recycled content, performance, and durability of EV battery packs.

Stellantis’ deal with Element 25 will aid its efforts in this area. Last year, Element 25 partnered with supply chain traceability provider Circulor to make the supply network of manganese more transparent.

The cooperation aims to create full manganese traceability and tracking of CO₂, as well as environmental, social and governance (ESG) standards for products from the Butcherbird project. It will also play an important role in Element 25’s strategy to produce zero-carbon manganese – which is element 25 on the periodic table, explaining the company’s brand name.

‘This is an important step in the delivery of our first production module which will combine Element 25’s innovative processing flowsheet and the high quality, ethically sourced manganese concentrate from our 100%-owned Butcherbird Project in Western Australia,’ Brown added.

Manganese ‘very promising’

While cobalt and lithium are among the metals commonly associated with EV battery packs, manganese is emerging as an increasingly vital material to the future of the EV industry.

Some go as far as describing it as the ‘mineral of the decade’ as it can be sourced more ethically compared to other metals. It is also cheaper to acquire than materials like cobalt. Additionally, the raw material is critical when it comes to ensuring EV battery safety.

Manganese is a stabilising component in the cathodes of nickel-manganese-cobalt lithium-ion batteries used in electric vehicles. The material increases energy density and hence improves driving range. At the same time, it decreases the combustibility of an EV battery pack.

The mineral is the 12th most abundant element, sourced primarily from South Africa, China, Australia, Brazil, India, and Gabon. It is commonly used in the steel industry, with materials and recycling company Umicore saying that around 90% of manganese is used for iron and stainless-steel production.

Umicore sees manganese-rich battery technologies as very promising, something the company made clear at its capital market day last year. Management board member, Ralf Kiessling, who is responsible for rechargeable battery materials at the company, spoke of an ‘emerging’ technology. He added that manganese-rich technologies have really gained attraction, with the company now cooperating with OEMs and cell makers.

Battery alternatives?

According to BloombergNEF, demand for manganese from the battery sector is expected to increase ninefold by 2030. Manufacturers are taking an interest in manganese because it is more affordable and could help lower battery costs.

At an event last year, Tesla CEO Elon Musk reiterated the potential for manganese-based batteries. Volkswagen has also hinted at the fact that manganese could play a more significant role in future battery cells.

Canada-based Manganese X Energy Corp believes the metal could disrupt the lithium-ion battery market as a viable alternative. Several research projects are in the works, exploring the potential to develop a manganese-based battery that could offer benefits such as higher energy density.

A shift to high manganese cathodes could help vehicle manufacturers meet EV volume production targets in the coming years. Making the most of manganese as an EV battery material seems to be on the agenda for many carmakers these days.

For Stellantis, securing a supply of the metal was not enough. The car giant will also make an equity investment in Element 25, a venture that it hopes will pay off in the long term.

Global EV Sales for 2022 H1

Global EV sales continue strong. A total of 4,3 million new BEVs and PHEVs were delivered during the first half of 2022, an increase of +62 % compared to 2021 H1. The regional growth pattern is shifting, though. Following 2 years of steep sales increases in Europe, EVs gained only +9 % over 2021 H1 there. Weak overall vehicle markets and persistent component shortages have taken their toll, exacerbated by the war in Ukraine. EV sales in USA and Canada increased by 49 % for H1 year-on-year, despite a weak overall light vehicle market which plunged by 17 % during H1 y/y.

China NEV sales defied all challenges the country is facing otherwise (real estate crisis, Covid lock-downs) and increased by a staggering 113 % for H1. BYD more than quadrupled sales to 641 000 units, making it the #1 in the global sales ranking, if their 315 000 PHEV sales are included. Counting BEVs only, Tesla still leads by a wide margin with 565 000 units delivered in H1.

PHEVs stood for 27 % of global Plug-in sales in 2022 H1 compared to 29 % in 2021. While their sales volumes still increase, their share in the PEV mix is in decline, facing headwinds from incentive cuts and improving BEV offers. Sales growth is increasingly depending on the degree of electrification. While BEVs grew by +75 % and PHEVs by +37 %, non-chargeable Full Hybrids grew by +14 % and Mild Hybrids backed by -7 % y-o-y H1. ICE-only vehicle sales declined by -16 %. Total global light vehicle sales were down 8 % y/y for H1-2022.

Rapid EV adoption in weak auto markets has boosted EV shares further. BEVs (8,2 %) and PHEVs (3,1 %) stood for 11,3 % of global light vehicle sales at H1 close, compared to 6,3 % in 2021 H1. Norway had the highest market share of EVs in H1 (BEV 69 % + PHEV 8 %), China had 21 %, Europe 18 % and USA 6,5 %. The fastest growing markets were India with 20 700 units BEV & PHEV for H1, +273 % and New Zealand with 8 300 units, +260 %.
For the full year of 2022, we expect sales of 10,6 million EVs, a growth of 57 % over 2021, with BEVs reaching 8 million units and PHEVs 2,6 million units. By the end of 2022 we expect nearly 27 million EVs in operation, counting light vehicles, 70 % are BEVs and 30 % PHEVs. Sales of Fuel Cell Vehicles (FCEV) in the light vehicle sector have declined by -9 % so far and are below 20 000 units annually. Current sales are from 5 vehicle models and most sales are in South Korea and USA. We estimate their current population to ca 55 000 units.

High EV Growth in Weak Vehicle Markets

Global light vehicle markets are contracting again. Following a brief recovery in 2020 H2 and 2021 H1, 2022 H1 sales were 8,1 % lower than last year. We expect small gains for H2 as numbers compare to the depressed sales of 2021 H2. 2022 auto sales in most mature markets stayed 20-30 % below the 2015 – 2019 average, so far.

China is among the few exceptions, but with extreme volatility: a +24 % increase y/y in February was followed by a -45 % crash during the April lock-downs and a +30 % boom in June and July, amid swift Government support.
Western auto sales are facing a double dip, post-Covid, with supply constraints soon to be joined by demand constraints as central banks try to combat inflation by interest rate hikes. The result is, much likely, a further delay in market recovery.

EV sales held up well in this environment: while global light vehicle sales lost -8,1 %, BEVs and PHEVs increased by +62 % for H1. The relative weakness in Europe’s EV growth relates to the EV boom in 2020 / 2021 and the repercussion from the war in Ukraine.

New all-time-highs in EV sales will be common also during the 2nd half, but growth rates will be somewhat lower as the low-base-effect diminishes.

BYD Leads – Including Plug-in Hybrids

Robust increases of EV sales enabled nearly all OEM to grow their sales in 2022-H1. Global EV deliveries increased by +62 % y/y in total; OEMs with higher growth have increased their share in the EV sector.

BYD sold over 4 times as many BEVs+PHEVs compared to 2021 H1, by boosting sales of existing models, successfully introducing new models and by entirely focusing production and sales on BEVs and PHEVs. Non-chargeable variants were phased out, ending in April this year. BYD is now the largest maker of PHEVs and moved from rank #3 in 2021 to #1 for BEVs & PHEVs combined.

Tesla leads global sales of BEVs by a large margin, with a share of 18 % in all BEVs sold worldwide. H1 growth was 46 %, less than for the sector, but from a high base.

The VW Group stayed flat compared to last year; with all its brand following this pattern we can assume production related issues. BEVs gained, while PHEVs lost.

GM increased by just 15 % as the Wuling Mini-EV is facing more competition and most future, high volume EV entries still are in the pipeline.

Hyundai and Kia launched at least 9 new and revised EVs during the last 18 months, among them the Ioniq 5, the Kia EV6, the Kia Niro and 3 EVs from Genesis. Their global growth outperforms the sector and is the more impressive as the companies EV presence in China is fading.

Increases of Stellantis were below the global EV sector growth, with high exposure to slow growing Europe and low sales in the strongest market, China. Excluding China, their sector share has risen from 11 % in H1-2021 to 12,7 % this year.

Other OEMs of European and/or Japanese origin did not keep up with the sector growth as they were held back by disturbed supply chains and/or underestimated EV demand during weakening auto markets. Toyota and Jaguar Land Rover delivered fewer EVs compared to last year.

Most Chinese brands show triple digit growth of NEV sales in their booming home-market. Exports accounted for only 3,6 % of their global volume, not including China exports by e.g Tesla, Polestar, BMW iX3 and other transplants. Including these, exports accounted for 8,4 % of China NEV production in H1 this year.

Tesla and BYD Models Dominate the Top-10

Tesla has a new best-seller, the Model Y, not only in the EV sector, but within all SUVs and Cross-Overs in this category, including ICEs. Household nameplates like Toyota Highlander, Ford Explorer, BMW X3, Mercedes GLC and the likes usually sell 300-400 000 units per year globally. The Model Y can comfortably reach 700k this year with current selling rates. The Model-3 took a beating, though, as Tesla prioritized production of the more sought after and more profitable Model Y.

BYD has 5 models in the top-10, with 2 PHEVs as their best-sellers; a legacy from their regular ICE business which BYD abandoned in April this year. The newcomers Dolphin and Yuan Plus had a flying start.

GM-Wuling’s Mini EV sales increased further with additional battery variants but it now faces more competition from similar concepts like the Chery QQ and other ultra-cheap mini commuters.

The BYD Han is a large sedan for a base price of 230 000 RMB. It carries BYDs new LFP Blade Batteries. With its generous size-feature-price ratio it has a unique position in the market. There is also a PHEV version selling ca 1/2 of the Han BEV volume.

The VW ID.4 is the best selling model from a European brand. Sales include the ID.4 X and ID.4 Crozz made by VW’s joint ventures with SAIC and FAW in China.

The Li Xiang One is a large SUV with range extender technology and a 40,6 kWh battery. It became an instant hit and outsells established rivals like the BYD Tang PHEV, Audi e-tron Quattro and BMW X5 PHEV by a wide margin. China sales only, so far.

10,6 Million BEVs & PHEVs Expected for 2022

Global EV sales for 2019 and 2020 stayed below trend. In Europe, the WLTP introduction forced many high-selling PHEV models into the shop for e-range upgrades. In China, regulators cracked down on products with substandard safety and range. Dozens of models had their sales halted and several combatants went out of business. In 2020, the first wave of Covid-19 led to an unprecedented slump in car sales but also to higher subsidies for EVs. In both years, EV sales would have been higher, in a business as usual situation.

2021 was not business as usual either, but EV sales were back on track. 2022 H1 deliveries increased by another 1,65 million units compared to 2021 H1, in a global light vehicle market that lost 3,8 million units during the period. We expect similar gains for EVs in H2, while total vehicle markets return to growth compared to a low base in 2021 H2. Consumption stimuli will boost China volumes, interest rate hikes in USA and Europe will further delay the auto market recovery there.

10,6 million EV sales (at 13,4 % share) in 2022 are still a safe bet, well supported by sales trends, order backlogs, more desirable products and higher public awareness. The downside is in persisting component shortages and events in China and/or Russia leading to further deteriorating business conditions.

Nearly 27 Million EVs On The Road at 2022 Year End

Adding this year’s 10,6 million BEVs and PHEVs to the existing stock gets the number of EVs in operation to nearly 27 million, word-wide, counting light vehicles. With ca 1,5 billion light vehicles in operation, this is still just 1,8 %, counting BEVs only it is less than 1,3 % of the global fleet. The number of vehicle on the road worldwide is increasing by 40 million cars and light trucks every year, as many as the entire current vehicle population of the UK. This year, 8 million of this increase (20 %) are BEVs. The other 32 million newcomers (80 %) are still burning petrol or Diesel. In a scenario towards 100 % zero-emission global vehicle sales in 2040 (as an example for the math), the total number of vehicle in operation reaches 2 billion in 2040. By then, Over 40 % of this stock are BEVs but the sobering truth is also that, with current scrapping rates, over 50 % of vehicles still need to burn fuels. The full transition to BEVs needs to accelerate, because the positive impact on CO2 emissions comes with a considerable delay. Fast EV adoption is a prerequisite for sustainable personal mobility.

Global EV Sales for 2021

Global EV sales reached 6,75 million units in 2021, 108 % more than in 2020. This volume includes passenger vehicles, light trucks and light commercial vehicles. The global share of EVs (BEV & PHEV) in global light vehicle sales was 8,3 % compared to 4,2 % in 2020. BEVs stood for 71 % of total EV sales, PHEVs for 29 %. The Global auto market improved by only 4,7 % over the crisis year of 2020. As in 2020, EVs again were resilient to set-backs in auto demand and supply.

The remarkable growth rate of 108 % y/y needs to be seen relative to the low base volume of 2020. Caused by regulations and Covid-19, global EV sales of 2019 and 2020 were below the long-term trajectory and in 2021 they returned back to trend. While the y/y growth looks extreme, the 2021 volume is still fair.

Tesla had its share in it, leading the OEM EV ranking with 936 000 deliveries, 436k more than 2020. The Model-3 reached 501 000 units and became the 2nd most sold midsize nameplate after the Toyota Camry. The Volkswagen Group stayed on rank 2 and BYD climbed 4 positions to #3. BYD delivered nearly 600 000 units (w/o buses), over 400 000 more than in 2020.

Following the headwinds in 2019 and 2020, global EV sales were back on track in 2021. For this year we expect EV sales to return to more normal growth and reach around 9,5 million units, higher if remaining issues in supply and logistics are resolved.

Highest Annual Growth since 2012

China NEVs sales emerged stronger than ever from the steel bath during 2019 and 2020. Sales jumped by more than 2 million units, more than the combined volume increase of all other regions combined. Growth in Europe stayed lower as it compares to the boom in 2020 H2. Northern America sales benefited from the roll-out of attractive, new offerings by nearly all OEM and from better availability of Tesla Model 3 & Y. Consistent, high growth also among the remaining countries: South Korea increased by 64 200 units to 114 500 EV sales. Israel, Australia, India, Japan contributed with additional sales of more than 10 000 units each. Many smaller EV markets e.g. Brazil, New Zealand, Saudi Arabia, Singapore increased EV sales by over 200 %. Most OEMs have noticeably enhanced their EV offers beyond Europe, China and North America.

Doubling from a Modest Base

With total light vehicle sales recovering by only 4,6 % from the crisis year of 2020, the 108 % growth of EVs means doubling their market share. Variations between the market regions are strong, though: In Europe the EV share increased from 10 % to 17 %, with a 26 % peak in December, in a persistently weak total market. In Northern America EVs had 4,4 % share (2,3 % in 2020), in China their share increased from 5,5 % to 13,3 %. For the remaining 70 markets we are tracking, the combined EV share was 1,5 %. BEVs increased by 1 % in the EV mix with most of the gains occurring in the 2nd half of 2021. Their volume increased to 4,80 million units, PHEVs sold 1,94 million units and FCEVs 15 400 units.

Back on Track

The 108 % growth from 2020 to 2021 looks extreme, but it follows 2 years of restrained increments. Growth from 2018 to 2019 was hampered by the crack-down on the China NEV industry by tougher regulation. In Europe, many high-volume PHEVs were halted for battery upgrades to reach the 50g CO2 WLTP standards. 2020 saw 138 % y/y growth in Europe with the 95g CO2 mandate and a broad increase of EV incentives. EV sales in China and North America stayed flat again, heavily affected by the pandemic. In 2021, the increases normalized in Europe to +66 %, while the other regions made up for 2 years of stagnation. The trendline shows the likely historic development without these events. 2021 sales returned to the historic trendline, with extra momentum from booming sales of mini-EVs (A00 category) in China. They increased by another 500 000 units with strong inflow from the former Low-Speed-Vehicle category.

Made in China Counts

The Model-3 was the worlds best selling EV since 2018 and 2021 was no different. It ranked #2 among all mid-size car nameplates, ICEs included. Only Toyota’s Camry sold more units. Among the 501 000 global Model-3 deliveries 270 000 were made in China and 120 000 were exported from China. The #2, the Wuling Hongguang Mini EV went to the market at the right time to replace countless, third-rate Low Speed Vehicles which are banned from further sales. It trades for equivalent 4000 to 5000 USD. The Tesla Model-Y came in as #3 despite still being ramped up in China and not delivered in Europe before August 2021. We expect it to move into 1st place in 2022. On #4 the VW ID.4 with 122 000 sales worldwide; its Chinese siblings ID.4 X and ID.4 Crozz contributed with 49 400 units. 17 300 units went to USA and Canada, still from Europe production. BYD has 3 models in the top-10, the Qin Plus PHEV, the Han BEV and the Song Pro PHEV. All 3 are available as BEV and PHEV. Adding the other EV variant would change Qin plus sales to 167 500 units, total Han sales to 117 400 units and Song Pro sales to 108 300 units. Among EVs, the BYD Han is now the best selling large sedan, worldwide. The best selling large EV SUV is the Li Xiang One from CHJ Automotive with 90 500 sales in China only. It marks the renaissance of the Range Extender EV, a concept which has been introduced in a number of Chinese SUVs recently. The instant success of upmarket EVs from Chinese OEM, including many start-ups, has become a notable trend in the vast Chinese EV market. The Renault Zoe has aged fast and faces fierce competition from newer sub-compact cars and SUVs in Europe. Sub-compacts (Car-B) are a very Europe-centric category and the Zoe is the only EV in this list without a China production base.

Only Winners – More or Less

The hyper-growth in China’s EV sales created higher %-gains for the Chinese than for the America, European, Japanese and Korean players. The big winner was BYD which, after 2 years of declining sales, returned with exceptional gains for existing and new EV entries. Many of the 2021 launches did not have a full year of sales and we expect further, rapid sales increases for BYD. Among the international OEMs Ford, GM and Stellantis grew fastest. Ford with the new Mustang Mach-E; GM with booming Mini-EV sales from their partner Wuling and Stellantis by a large number of product launches which had their first full year of sales in 2021. For most others, growth stayed below 100 %. Volume gains were still massive for EVs, while the decline for ICE-only variants accelerated. Tesla remains on top, BEV only, and the distance to the Volkswagen Group, has increased by 100k. 2021 saw some notable changes in the OEM ranking: BYD climed from #7 to #3, Stellantis climbed from #9 to #5, the Renault-Nissan-Mitsubishi Alliance dropped from #3 to #8, Daimler down from #8 to #9, SAIC passed Volvo for #10. Positions for VW and GM are unchanged. Apart from ever advancing SAIC, the China NEV sector expansion supported even other State Owned Enterprises in the EV business like BAIC, Changan, Dongfeng, FAW and GAC, Many of them were in contraction mode between 2018 and 2020, with vast portfolios of hit and miss products. BAIC’s decline from the #1 maker of BEVs in China to an also-ran is a sobering tale. Better news from the Chinese EV start-ups: CHJ (Li Xiang), NIO, XPeng, Hozon, WM Motor and Leap Motor have not reached the 100 000 unit mark yet, but most of them now look back on 4 years of steady growth in volume and share. CHJ stands out, reaching 90 500 sales after 2 years with just one product, a luxury SUV, and in just one market, China. The combined 2021 volume of the aforementioned 6 start-ups is comparable with that of Stellantis.

Global EV Sales for 2021 H1

EV sales are back on track. A total of 2,65 million new EVs found new owners during the first half of 2021, an increase of +168 % compared to 2020. The recent increases speak hyper-growth but need to be seen relative to the low base of 2020 H1. During the 1st wave of the pandemic, global sales of EVs stayed -14 % below 2019 H1 volumes as vehicle markets declined by -28 % during 2020 H1. The market recovery shaped up in 2020 H2 with rapid gains in volumes and shares for EV, esp. in Europe, driven by attractive products, extensive green recovery funds and the 95g CO2 mandate.

For 2021, all regions and most countries witness strong increases in EV sales, with growth rates 3 to 8 times higher than for total light vehicle markets. The share of BEV+PHEV in global light vehicle sales increased from 3 % in 2020 H1 to 6,3 % this year. Europe (EU+EFTA+UK) leads with 14 % EV share for the first 6 months combined, up from 7 % a year ago. A caveat is that half of Europe’s EV sales are PHEVs, compared to 80 % pure electric outside Europe. The tailpipe emissions of PHEVs are completely depending on the charging and driving habits of their users, whatever the catalog value says. To their benefit it can be said that countries with high PHEV market shares usually have high BEV market shares as well.

Tesla leads global EV sales with 386 000 units (all BEV) delivered during H1, followed by the Volkswagen Group with 332 000 units, thereof 172 700 BEVs and 159 400 PHEVs. GM comes in 3rd with 227 000 units (221k were BEV), including over 180k of Mini-EVs from their SGMW joint venture in China. Growth was robust in all product segments except for sportscars. In the product segment mix, the trend is from sedans and compacts into SUVs. Most striking, though, is the re-bound of mini-EVs in China, now at ultra-affordable prices of 30-60 000 RMB. Read Wuling Hongguang Mini EV, Great Wall Ora R1, Chery eQ, SAIC Roewe Clever, Baojun and others. Around 300 000 units of them were sold during H1, a quarter of all NEV sales in China. They offer a long due improvement over countless, dodgy Low-Speed Vehicles from the earlier days, which are now banned by regulators. The new breed is exempted from some M1 vehicle requirements, often receives no subsidies but is, nevertheless, counted in the Chinese NEV tally. Including these, we expect sales of 6,4 million EVs in 2021, a growth of 98 % over 2020, with BEVs reaching 4 million units and PHEVs 2,4 million units. Growth rates will come down from the +168 % seen in H1, as volumes compare to a higher base during the 2020 H2 recovery. By the end of 2021 we expect over 16 million EVs in operation, counting light vehicles, 2/3 BEVs and 1/3 PHEV.

Rapid growth in all regions

Global light vehicle markets have partly recovered from the -28 % slump in 2020 H1 and increased by +28 % combined (which is still 8 % lower compared to 2019 H1). The recovery is uneven, though. Western Europe auto sales, which were hit hardest during the pandemic (-40 % y/y in H1-2020), rebounded by +29 % this year but are still 20 % below the 2015-2019 average.

EV sales held up better during the crisis, lost only -14 % during 2020 H1 and for this year their growth rates are 3 to 8 times higher than for the underlying vehicle markets.

Because of the low-base-effect, growth rates were extraordinary during the first 6 months of 2021, reaching 157 % in Europe, 197 % in China, 166 % in USA and 95 % in the remaining markets. The recent uptake is impressive and it is broad based: Except for Japan, all major markets posted new records in EV sales and share during the first half of the year.

New all-time-highs will be common also during the 2nd half, but growth rates will be significantly lower as the low-base-effect diminishes.

EV sales trending towards 6,4 million for 2021

Global EV sales for 2019 and 2020 stayed below trend. In 2019 when “regulatory storms” in Europe and China reduced demand and supply of popular offers. In Europe, the WLTP introduction forced many high-selling PHEV models into the shop for e-range upgrades. In China, regulators cracked down on products with substandard safety and range. Dozens of models had their sales halted and several combatants went out of business. In 2020, the first wave of Covid-19 caused and unprecedented slump in car sales but also increasing support by policy makers. In both years, EV sales would have been higher, in a business as usual situation.

2021 is far from business as usual, but EV sales are back on track. January to June deliveries have increased by 1,66 million units compared to 2020, in a global light vehicle market that gained 9,17 million units. We expect a similar volume gain for EVs in H2.

6,4 million in 2021 and 98 % growth y/y seems a lot, yet the trend in volumes/shares of the last 12 months, more choice of better, affordable products, solid policy support and higher public awareness all underpin this forecast. The YTD SAAR would support an even higher number. The downside is in component shortage and events in China relating to sudden changes in regulation or business conditions.

The Top-10 best selling EVs are all BEVs now

For the first time, this picture shows only BEVs in the global top-10. The first PHEV ranks #16, the Volvo XC40. On #11 you would find the Li Xiang One which is, technically, a Range Extender EV like the Chevy Volt and the BMW i3 Rex. With H1 sales of 30 000 units in China only, it is poised to become the best selling large SUV in 2021, counting plug-ins. Probably a hint where PHEVs need to go for staying future-proof.

Tesla maintained the first spot with the Model-3 adding another 102k over 2020 H1, with increases in all sales regions. The Model-Y is fully available in USA/Cda, had the China ramp-up in Q1 and is not available in Europe yet. The full year potential is higher than 138k indicate.

The Mini-EV by GM-Wuling was mentioned earlier. The BYD Han is available since late 2019 and pioneered an new type of large capacity LFP battery, called “Blade Battery”. There is a PHEV version selling ca 1/3rd of the Han BEV volume.

The VW ID.4 is still being ramped up. June sales were 12 300 units globally, indicating higher potential. The 38k include the China made ID.4 Cross (FAW) and ID.4 X (SAIC). High-volume deliveries of the ID.3 started in September 2020. After a swift roll-out in Europe and 57k registrations in 2020 (28k in December alone), sales in 2021 have continued at a more leisurely pace.

Renault Zoe sales had to give way to the onslaught of six new B-Segment entries from three Stellantis brands, which were all in ramp-up during 2020 H1 and have full sales now. Great Walls Ora brand charms China’s youth with retro inspired minis since 2019. The R1 is their most popular model aka “Black Cat” in China.

Tesla leads, VW Group catching up – including PHEVs

Consistent, steep increases of EV sales in all regions enabled nearly all OEM to grow their sales over 2020 H1. Global EV deliveries increased by 168 % y/y in total; OEMs with higher growth have increase their share in the EV sector.

Tesla has more than doubled deliveries compared to last year and stays on top. More sales of Model-3, the Model-Y intro and higher production/sales in China were the main drivers. VW is closing in, esp. by more sales in Europe; their growth in PHEVs was somewhat higher than in BEVs, even with the ID.3 and ID.4 launches.

Despite absence in Europe, GM posted huge gains from their joint ventures for mini EVs with Wuling and SAIC, also sold more Bolt EVs in USA. The few PHEVs are from Buick in China. Stellantis is rapidly expanding their EV portfolio across multiple brands on common architectures, including a large array of new light commercial vehicles, which has not ramped up to full potential, yet. BMW needs more BEVs to grow faster. The i4 and iX are still some months off. The Renault-Nissan-Mitsubishi Alliance lost ground in all regions and most product categories.

BYD, like many other Chinese OEM, are recovering from the slump in 2019 H2 and 2020 H1. For BYD, Geely, BAIC, JAC, FAW, JMC, volumes have returned to the level of 2019 H1, not more. The Chinese start-ups Nio, X-Peng, Hozon, Li Xiang (CHJ), Leap Motor are gaining sector share from low volume bases. SAIC is the EV export leader among China based OEMs. Within their 95k volume for H1, 22k were exported, mostly to Europe. Tesla (25k) and Volvo (26k) exported slightly more from China.

Among Europe OEM, Porsche and Volvo have the highest share of EVs (BEV+PHEV) in their sales; over 30 % for Porsche and 20 % for Volvo. Japanese OEM are growing from low bases and have BEV+PHEV shares of 1 % or less in their sales. This compares to a 6,3 % market average.

16,4 million EVs in operation by the end of 2021

Adding 6,4 million BEVs and PHEVs in this year gets the number of EVs in operation to 16,4 million, counting light vehicles. With ca 1,5 billion light vehicles in operation, this is still just 1,1 %.

The number of vehicle on the road worldwide is increasing by 40 million cars and light trucks every year, the entire current vehicle population of the UK. 85 % of this additional fleet is still using petrol or Diesel this year. In a scenario towards 100 % zero-emission global vehicle sales in 2040 (as an example for the math), the total number of vehicle in operation reaches 2 billion, over 40 % are BEVs, but over 50 % of them still need to burn fuels.

The full transition to BEVs needs to accelerate, because the full impact on CO2 emissions comes with a considerable delay. Restricting the use of fossil fuels for the remaining ICE fleet is not a desirable solution. Fast EV adoption is a prerequisite for personal mobility.

Global Plug-in Vehicle Sales Reached over 3,2 Million in 2020

2020 became a great year for plug-in vehicles, in the end. With only a few details still to be reported we are expecting global BEV+PHEV sales of 3,24 million, compared to 2,26 million for the year previous. What started with an unprecedented economic downturn during the 1st COVID-19 wave became a success story for EVs in Europe. Nearly 1,4 million BEVs and PHEVs were registered in Europe during 2020, 137 % more than in 2019, in a vehicle market that was down by 20 % year-on-year. It was the combination of new attractive models, incentive boosts by green recovery funds, the 95g CO2 mandate, much improved availability and intense promotion of EVs.

Europe has superseded China as the motor of EV growth. For the first time since 2015, EV sales in Europe have outpaced NEV sales in China. Europe is further ahead in terms of EV share: BEVs+PHEVs increased from 3,3 % 2019 to 10,2 % in 2020, counting the EU and EFTA countries, including UK. The NEV share in China increased from 5,1 % to 5,5 % during this period.

Outside Europe growth of EVs was slower, but still significant. China NEV sales recovered strongly during the 2nd half and were up by 12 % for the year. EV sales in USA increased by a meager 4 %, despite the sales start of the Tesla Model-Y. Fortunes varied in other markets, with declines in Japan, Canada and Australia, while increases in South Korea, Taiwan, India, Israel, UAE and Hong Kong outweighed these losses.

We think that these good news deserve an early reporting, even if the final numbers could see very minor changes below 0,5 %. We will enhance this post and follow up with more regional analysis as the results solidify. Stay tuned.

Europe Leads EV Up-take

In most countries, BEVs and PHEVs were more resilient to the Corona crisis than the auto markets in general. In volume terms, global BEVs+PHEVs deliveries increased by 43 % year-on-year, while the the global light vehicle market decreased by 14 %. Their global market share increased from 2,5 % in 2019 to 4,2 % in 2020. Europe passed China in EV sales with a 137 % increase in a disturbed auto market, which had suffered volume losses up to 80 % during the 2nd quarter. The real EV boom in Europe started in June and July and reached its peak in December with nearly 285 000 sales, +260 % y/y growth and a market share of 20 %. All OEM did their very best to reach their CO2 emission targets. Also China NEV sales recovered in the 2nd half, with an average +80 % volume growth y/y from July to December. As these volumes compare to the weak results of 2019 H2, they were back to normal at best.

EV sales in USA (+4 % y/y) outperformed the auto-market (-15 % y/y) mostly from the introduction of the Model-Y. Tesla extended its sector domination, with 62 % of all Plug-in Vehicle sales and 79 % of all BEV sales in the US coming from Tesla.

The losses in Japan continued, with broad based decreases, especially among domestic brands.

“Other” markets include Canada (47k sales, -7 %), South Korea (52k sales, +55 %), Taiwan 7k, +308 %) and many smaller EV markets around the world, some of them growing very fast in spite of adverse conditions.

Germany becomes the 2nd largest EV Market after China

Plug-in sales in Germany increased by 254 % over 2019, 191 % for BEVs and 351 % for PHEVs, witnessing the high representation of German OEM in PHEV variants. PHEVs stood for half of German plug-in vehicles sales; the global average for 2020 was 31 % PHEVs and 69 % BEVs. One out of eight global plug-in sales were in Germany last year.

Many European markets have doubled or tripled their EV sales vs 2019 and Europe captured 43 % of global EV sales in 2020 vs 26 % in 2019. The US fell further behind, volumes hinging on the capacity of Tesla and the commitments of the ZEV Alliance states. China NEV sales returned to normal in the 2nd half of 2020, reaching 240k units in December alone. The total for 2020 reflects the weak sales during the 1st half.

The overall picture is that global EV sales have returned to the S-Curve in terms of volume and are somewhat above trend in terms of share. For the ongoing year, we expect 4,6 million plug-in sales with higher growth in North America and China. Europe is not likely to repeat the 137 % increase of last year, but 2 million sales are within reach.

PHEV Renaissance

Since they appeared 10 years ago, 2019 was the first year that PHEVs decreased in sales. The reasons were the transition form the lenient NEDC test cycle to the tougher WLTP in Europe. Consequently, the CO2 emissions of most PHEVs exceeded the 50g limit for incentives in many European markets. Sales were paused for many PHEV variants during the 2019 model-year to install larger batteries for more E-range. For 2020 they came back, updated, meeting pend-up demand and more generous purchase grants.

This put an end to ever higher BEV shares in the plug-in mix. Not that BEV sales (2250k for 2020) suffered much from this; they still increased by 33 % or 560k units over 2019, with 386k contributed from Europe. 990 000 PHEVs were sold worldwide, 410k, or 71 % more than 2019.

PHEVs ease the transition to real ZE transport for OEMs and car buyers alike, but the 2020 trend reversal will be short lived. PHEVs are only as green as their users and their charging habits. The debate has started and PHEVs are likely to see reduced incentives in some European markets, starting this year. Long term, the cost, design and emission advantages of BEVs speak for more growth in BEVs than in PHEVs, anyway.

Global BEV and PHEV Volumes for 2020 H1

The 1st half of 2020 was overshadowed by the COVID-19 lockdowns, causing unprecedented declines in monthly vehicle sales from February onwards. For the first 6 months of 2020 the volume loss was 28 % for the total light vehicle market, compared to H1 of 2019. EVs held up better and posted a loss of 14 % year-on-year for H1, globally. The regional developments were very diverse, though: In China, where the 2020 numbers compare to the still healthy sales of 2019 H1, NEVs lost 42 % y/y in a car market that was down 20 %. Lower subsidies and more stringent technical requirements are the main reasons. In USA, the sales of EVs followed the overall market trend.

Europe is the beacon of EV sales in 2020 with 57 % growth for H1, in a vehicle market which declined by 37 %. The rapid increases of EV sales started in September 2019 and gained further momentum this year. The WLTP introduction, together with changes in national vehicle taxation and grants created more awareness and demand for EVs. The industry geared up to meet the 95 gCO2/km target for 2020/2021. Over 30 new and improved BEV & PHEV models were introduced in the 2nd half of 2019 and production ramped up to high volume, despite a 1-2 month industry halt.
Six European countries have introduced additional green recovery incentives to promote higher EV sales, starting in June and July. Preliminary results for July give an indication for the effect on EV adoption in H2: The top-10 EV markets in Europe increased sales by over 200 % combined. We expect very strong uptake for the remainder of the year, with sales passing the 1 million mark and monthly market shares of 7-10 %. The global BEV & PHEV share for 2020 H1 is 3 %, so far, based on sales of 989 000 units. The smaller car markets continue to lead EV adoption. The share leader is Norway, as usual, where 68 % of new car sales were BEVs & PHEVs in 2020 H1. Iceland came 2nd with 49 % and Sweden 3rd with 26 %. Among the larger economies, France leads with 9,1 %, followed by UK with 7,7 %. Germany posted 7,6 %, China 4,4 % %, Canada 3,3 %, Spain 3,2 %. All other car markets with over 1 million total sales showed 3 % or less for 2020 H1.

Our expectation for 2020 is around 2,9 million world-wide BEV & PHEV sales, unless a broad resurge in COVID-19 forces important EV markets into severe lock-downs again. The global EV fleet will reach 10,5 million by the end of 2020, counting light vehicles. Medium and heavy commercial vehicles add another 800 000 units to the global stock of plug-ins.

As usual, feel free to publish diagrams and text for you own purposes, mentioning us as the source.

Europe Bucks the Trend

Supported by generous incentives and better supply of new and improved EVs, Europe became the clear winner of 2020 H1 and is much likely to lead the growth during the entire 2020. The impact of COVID-19 on vehicle markets was most severe in Europe, but EV sales grew by 57 %, reaching 6,7 % light vehicle share, or 7,5 % when counting EU+EFTA markets only. This compares to 2,9 % market share for 2019 H1, a formidable increase. Europe’s share in global BEV & PHEV sales increased from 23 % to 42 % within a year. More EVs were sold in Europe than in China, for the first time since 2015. The largest volume growth contributors were Germany, France and the UK. Except for Norway (-6 %), all larger European EV markets posted gains this year.

China’s decline of NEV sales and shares started in July 2019 and continued through H1 of 2020, amplified by the market slump during February and March. For H1, the 2020 numbers compare to the 2019 period before subsidy reductions and further technical requirements strangled demand and supply. The losses amount to a dismal -42 % on that basis. China stood for 39 % of global BEV & PHEV volumes in H1, down from 57 % in 2019 H1. Preliminary July results indicate a recovery of NEV sales, with ca 40 % increase over July 2019.

The losses in Japan continued, with broad based decreases, especially among importers.

USA volumes were held back by a 7 week shut-down of Tesla from end of March until mid-May and there were few news from other OEM. The new Tesla Model Y contributed with 12 800 units in H1. Imports from Europe posted high volume declines as European OEM prioritise deliveries to Europe where they are more badly needed. The highlights for H2 volumes in North America will be the new Ford Mach-E and high-volume deliveries of the Tesla Model-Y.
“Other” markets include Canada (21k sales, -19 %), South Korea (27k sales, +40 %) and many fast growing, smaller EV markets around the world

Miles Ahead

The lead of the Model-3 is impressive, with over 100 000 more sales than the #2, Renault Zoe. World-wide, one out of seven EV sold was a Tesla Model-3. While sales took a beating in Europe and North America, it gained by local production in China, where it has become the best selling NEV model by a large margin. Global sales are now close to the leading ICE competitor models’.

With the sharp decline of China NEV sales, many Chinese entries have disappeared from the top-10. Remaining are the BYD Qin Pro and the GAC Aion S, both are long range BEV sedans, popular among private buyers, company pools and ride hailers.

The Renault Zoe was re-designed for MY2020, Europe deliveries started in Q4-2019 and sales where 48 % higher than for the predecessor. The Nissan Leaf lost another 32 % compared to last year, with losses in all regions, showing that Nissan is less and less committed to the Leaf. It is in good company: BMW i3 sales were 51 % lower than last year, it will not have a successor and is left to fade away.

On the contrary, the soon to be dropped e-Golf is still going strong (+35 % y/y), as VW pushed production and sales in the advent of the new ID.3. The Hyundai Kona is now made in the Czech Republic for Europe sales, which will improve availability in H2 of 2020

The first PHEV in the top-10 is the venerable Mitsubishi Outlander, introduced 2013, face-lifted 2 times and still one of the few PHEVs which can use DC fast-chargers. Sales in H1 were 31 % lower y/y and a successor model is uncertain at this time.
The Audi e-tron quattro has become the leader in the large SUV category, a position firmly held by the Tesla Model X since 2017. The global sales roll-out began in Q4 of 2018 and sales have doubled compared to 2019 H1. The VW Passat GTE volume is from, both, the Europe version (56 %, mostly Station Wagon) and the China made version (44 %, all Sedans).

China in Reverse

COVID-19 has affected the entire industry, yet, the common features for EV growth and decline are the combinations of products, policies and market presence. EV sales of European OEM were favoured by new, attractive BEVs and PHEVs launched into an environment with stringent CO2 targets, looming ICE bans and increasing financial incentives. In China, the 99 % home market exposure, combined with high dependence on subsidies, became the nemesis of many Chinese OEM, while Tesla and many foreign OEM thrived with better products from local plants. The top-5 are now all global players; operating from proprietary platforms with local adaptions.

A broad consolidation of China’s NEV industry seems inevitable as the sales slump has left many smaller players in a distressed state. NIO and GAC are exceptions, but they already co-operate on R&D and production. For many others the future is uncertain. The larger Chinese OEMs created vast NEV portfolios in recent years, but many of these new entries are short-lived or sell in tiny numbers when they do not meet changing technical requirements and discerning consumer taste. There is still room for innovative, distinct brands like the Li Xiang One, the first entry by CHJ Automotive. This large SUV, the first range extender EV in the segment, made it into the top-10 in China after just 6 months, despite an unestablished brand, up-market pricing and adverse market conditions.

Our Expectation for 2020

EV sales lost 14 % in the first half of 2020, compared to a 28 % decline in vehicle markets. This relative success can be attributed to rapid growth in Europe and many fast growing EV markets outside the China-USA-Europe triad: Mexico, South Korea, Australia, Hong Kong, Taiwan, Israel, to name the largest contributors. The recovery started in May and July saw car sales in many countries overshooting relative to normal seasonality. High EV growth in H2 is warranted by an unprecedented availability of attractive models, combined with green recovery funds in many countries, particularly in Europe.

For Europe we expect 1,1 million BEV and PHEV sales (+85 %), for China 1,2-1,3 million, (+7 %), for USA 360k (+14 %) and 200k in all other markets combined (+28 %). 2,9 million globally is our baseline forecast. The possibility for a broader re-surge on COVID-19 increases the forecast uncertainty. Further nationwide lock-downs are unlikely, but local outbreaks at OEM or suppliers could lead to undersupply and delays in important launches of new EV entries. In the worst case, the 2020 result could be 15-20 % below the base case, shifting most of the lost volume into the next year.

Global BEV & PHEV Sales for 2019

Global plug-in vehicle deliveries 2019 reached 2264 400 units, 9 % higher than for 2018. This is a clear departure from the growth rates of the previous 6 years, which were between 46% and 69 %. The reasons are in the developments in the two largest markets, China and USA, where sales stagnated in the 2nd half of 2019 and stayed significantly below the sales boom in 2018 H2. In USA, sales of most plug-in models decreased compared to the boom in 2018 H2. In China, further slashing of subsidies, paired with more stringent technical regulation caused a crash in NEV demand and supply, starting in July.

Europe became the beacon of 2019 EV sales with 44 % growth, accelerating towards the end of the year. The WLTP introduction, together with changes in national vehicle taxation and grants created more awareness and demand for EVs. The industry geared up to meet the 95 gCO2/km target for 2020/2021. Over 30 new and improved BEV/PHEV models were introduced in 2019, many of them in Q4, which will push EV sales in this year and the next.
The global BEV&PHEV share for 2019 was 2,5 % and the smaller car markets continue to lead EV adoption. The share leader is Norway, as usual, where 56 % of new car sales were Plug-ins in 2019. Iceland came 2nd with 24,5 % and the Netherlands 3rd with 15 %. Among the larger economies, China lead with a plug-in share of 5,2 %, UK posted 3,2 %, Germany 2,9 %, France 2,8 %, Canada 2,7 %. All other car markets with over 1 million total sales showed 2 % or less for 2019.

At the end of 2019 the global fleet of plug-ins was 7,5 million, counting light vehicles. Medium and heavy commercial vehicles add another 700 000 units to the global stock of plug-ins. Their global deliveries were 100 000 units in 2019, thereof 95 % in China and mostly as large buses.

Amid COVID-19, the outlook for 2020 global EV sales becomes more difficult. We expect high growth in Europe throughout the year, high growth in USA and other markets in H2, but China could become another disappointment. The preliminary EV sales data for January and February is very positive in Europe, encouraging in USA, but dismal in China, where the total vehicle market was down 80 % in February. If quarantines and factory closures continue into Q2, insufficient parts supply affects the global car industry during a longer period and the lost volumes are unlikely to be recovered during this year. In China, this gets another dimension when dealers remain closed and buyers have to stay at home.

As usual, feel free to publish diagrams and text for you own purposes, mentioning us as the source.

Europe gears up

China’s NEV sales still showed 3 % small increase in 2019, despite the crash in H1. Growth was a brisk 70 % for H1 until the 2nd round of subsidy reductions and further technical requirements strangled demand and supply. In H2, when usually 70 % of NEVs are delivered, sales contracted by 31 % versus 2018. The total car market was down 12 % y/y during H1 and 4 % y/y during H2. China still stood for 53 % of global BEV&PHEV, down from 56 % in 2018.

Europe became the winner of 2019 with 44 % volume growth y/y. Europes share in global BEV&PHEV sales increase from 20 % to 26 % within a year. The largest volume growth contributors were Germany and the Netherlands. Nearly all European markets posted gains last year.

The losses in Japan continued, with the 3 leading domestic entries all in decline. Only Tesla and BMW increased their Plug-in sales in 2019.
USA posted an unexpected loss of 12 % versus 2018. The next section gives more details about the developments. Others include Canada (51k sales, +19 %), South Korea (34k sales, +7 %) and many fast growing, smaller EV markets around the world.

More details for USA and China

The upper chart compares the quarterly USA plug-in sales of 2019 compared to 2018. The 12 % decline, from 359k to 318k was caused by a number of factors: Tesla Model-3 sales of H2-2019 compare to the 2018 period when Tesla delivered on all the pre-orders since 2016, while H2 of 2019 more reflected running demand in the US. Also, Tesla skipped the 75 kWh battery version for Model S&X in Q1, increasing the starting price for the remaining 100 kWh version by $3000 on the S and by $6000 for the X, in exchange for improved range, notwithstanding. The market did not buy it all and S&X were down 35 % (by 17 600 units) for the year. US sales of the Model-3 increased from 140k in 2018 to 145k in 2019.

USA sales of OEMs other than Tesla show a combined decrease of -17 %, vs -6 % for Tesla. US and Japanese brands stood for most of the decline, while European and Korean OEM gained from new model introductions, like the Audi e-tron Quattro and the Hyundai Kona.

The lower diagram shows the share development NEVs in China. Monthly demand anticipated the 2 steps of subsidy cuts, becoming effective in April and July, with many deliveries pulled ahead into March and June. After that, the crash became a fact, hitting especially the price-sensitive segments and most domestic EV makers. Some of the smaller Chinese companies have only sold a few hundreds of cars during H2. How and when they can return to normal business is still uncertain.

December deliveries indicated a partial market recovery, but 2020 started with a February shut-down of most car manufacturing after the COVID-19 outbreak. January, with fewer working days than last year, had a 50 % slump of NEV sales. February and March will reflect “state of emergency”, with 80 % declines in February, hopefully less in March. Imports most likely gain in this situation.

Over half of the global volume is still in China

This shows the top-10 markets for plug-ins, underlining the significance of China in the development of the sector. 4,7 % NEV share in the worlds largest car market of 25,4 million light vehicles generated 1,2 million of volume in 2019. Business is kept local: Few units (4700 according to our records) were exported from China and NEV imports accounted for just 56 500 units, over 80 % from Tesla. Imported plug-ins are burdened by the usual import duties and do not receive NEV subsidies. The only way to sell at equal terms is to produce EVs (incl. their batteries) in China and recent efforts start to pay off: For 2019, we have counted 196 000 units China made NEVs, which were sold under foreign brand names, more than double the volume of 2018. GM leads (63k units) with the Baojun mini-EV from their SAIC J/V, followed by the VW Group (47k) and BMW (32k). Tesla started late in December.

USA remains a distant #2 despite the Tesla success story. Germany (111k) passed Norway as Europe’s largest EV market. The triad of China, Europe and USA stood for 93 % of global BEV&PHEV sales in 2019. The trend-line indicates that the weak 2019 results contains a good measure of “pay-back” to 2018, when an over-heated China NEV market coincided with high volume production of the long-awaited Tesla Model-3.

Tesla accelerates

Tesla completed the roll-out of the Model-3 which is now available in 48 countries, the top-3 markets being USA (145k), China (34k, all imported) and the Netherlands (30k). With 368 000 deliveries incl. Model S&X, a 50 % increase over 2018, Tesla commanded 16 % share of global BEV&PHEV volume in 2019, 22% if only BEVs are counted.

The slump in China means that most of China’s previously fast growing NEV makers faced steep declines during the 2nd half of the year. Notable exceptions were Guangzhou Auto (GAC) with their new Aion S Sedan, Great Wall with the Ora mini-EV and FAW. Also the EV start-ups NIO, WM-Motor and Xiaopeng fared well, albeit from small volume bases. The larger Chinese OEMs created vast NEV portfolios in recent years, but saw volumes of many fresh entries crumple when they did not fit revised policies and requirements anymore. Waste at its worst.

Besides Tesla, the winners in terms of volume and growth were the VW-Group and Hyundai-Kia. VW mostly by expansion of local NEV production in China, Hyundai by the success of the Kona EV. BMW defended its #4 position, not more; GM gains from the Baojun J/V with SAIC in China. The Renault-Nissan-Mitsubishi Alliance would be #3 with combined volumes of 201k. One by one, Renault (Zoe) and Mitsubishi (Outlander) were among the winners, while Nissan (Leaf) was not. Toyota started building the Corolla/Levin PHEV siblings in China, adding 15k of sales, the ageing Prius PHEV is in decline. Volvo does with PHEVs only, but in nearly all models and in 58 markets, making the most out of it. JLR had the first full year of sales for the all-electric i-Pace and the Range Rover PHEVs, they now sell in 60 countries around the world.

BEV and Model-3 domination

As expected, the new Tesla became the world’s best selling plug-in, with 300 000 deliveries last year. High volume sales outside USA/Canada started in January 2019 and nearly all the additional volume vs 2018 were from exports. The car sells without advertising or rebates and demand remained strong throughout the year.

Beijing based BAIC landed a real hit with the 2nd generation of the EU 260/400 series, aka EU5. It has become very popular among the cities taxi operators and hide hailers, supported by the plan to convert the taxi fleet to EVs and savings on operating cost.

The Nissan Leaf lost 17k compared to last year, despite the intro of a larger 62 KWh battery variant called e+, at a €6000 price premium. Too much in an environment where battery upgrades are offered every 2nd year without significant price hikes, read BMW i3, which is still going strong.

The BYD e5 gained for similar reasons as the BAIC EU5, but mostly around Shenzhen, where it is built.

The only PHEV in the 2019 top-10 is the venerable Mitsubishi Outlander, introduced 2013, face-lifted 2 times and still one of the few PHEVs which can use DC fast-chargers.

The Renault Zoe got re-designed for MY2020, Europe deliveries started in Q4 and reached 7500 units for 2019. 40k units were from the old model, unit sales unchanged vs the year before.

The Hyundai Kona BEV became an instant success, reasonably priced and with a 64 kWh battery option. A large order back-log indicates that the 44k do not reflect the real demand for this small SUV.

Excluding entries with less than 50 units of sales, 250 individual BEV and PHEV models (nameplates) were available worldwide during 2019. The top-50 models stood for 74 % of the global volume.

Europe BEV and PHEV Sales for Q3-2019 + October

Europe sales of Battery Electric Vehicle (BEV) and Plug-in Hybrids (PHEV) were 400 000 units during Q1-Q3. October added another 51 400 sales. Year-to-date growth stands at 39 % over 2018. The September result was particularly strong when the re-launch of popular PHEV for BMW, Mercedes and VW and Porsche, together with high Tesla Model-3 deliveries, boosted the sector to 4,2 % market share, a new record. The first half of 2019 saw a strong shift towards pure electric vehicles (BEV), 68 % for 2019 H1, compared to 51 % for 2018 H1. The change reflected the introduction of the more stringent WLTP for fuel economy ratings, changes in taxation/grants promoting more BEV uptake and better availability of long-range BEVs, including the Model-3. Many PHEV were not available due to model-changes or battery upgrades for better e-range. Since September, the PHEVs are back and were an important growth contributor.

We expect strong results for the last 2 months: The re-bound for PHEV sales continues, Tesla needs to deliver on the guidance of at least 360 000 global deliveries for the year and the Netherlands increase the benefit in kind for the private use of BEV company cars for 2020. 2019 is likely to end with a total volume around 580 000 plug-ins, which is 42 % more than for 2018. Market share can go as high as 6 % in December and is 3,25 % for the year.
Tesla leads the OEM ranking with 78 200 sales year-to-date October, a sector share of 17 %. The BMW Group came second with 70 000 units. The Tesla Model-3 is the best selling plug-in with 65 600 deliveries, clearly ahead of the Renault Zoe with 39 400 sales.

Germany and the Netherlands were the strongest growth contributors, in terms of volumes. Germany has become the largest market for plug-ins in Europe, displacing Norway to the #2 position. Norway is still the word leader in EV uptake, with a share of 45 % in this year’s light vehicle sales, up 6 %-points compared to last year. Iceland comes second with 22 % so far; within the EU, Sweden leads with 10 % of new car and LCV registrations being BEVs and PHEVs.

Definitely Greener

Despite weak PHEV supplies from their domestic OEM until August, Germany gained the #1 position from Norway this year. The growth, 49 % so far, was based on higher BEV sales: The new Tesla Model-3 contributed with 7900 units, Renault increased sales of the outgoing Zoe by 90 % to 8330 units, BMW doubled sales of the i3 to 8200, its battery capacity was increased to 42 kWh and gone is the Range Extender. The Mitsubishi Outlander PHEV (6700 units, +435 %) filled some of the voids left by Daimler, VW Group and BMW. The new Audi e-tron quattro, the Hyundai Kona EV and the Mercedes E300 PHEV added 3000 to 4000 units each.

The fastest growing markets, in terms of %, are the Netherlands and Ireland, both with focus on BEV sales. The UK and Belgium returned to growth with high Tesla Model-3 sales and the return of popular PHEVs.

Apart from the top-15, most other markets posted gains, too. Iceland, Slovakia and Slovenia being the few exceptions. In total, Europe plug-in sales increased by by 39 % until October.

2019 to end on a high note for Europe

Tesla’s position in Europe is not quite as overwhelming as it it in the US, where 4 out of 5 BEVs bought are from Tesla and the Model-3 stands for nearly half of all plug-in sales. Still, without it, EV adoption would be significantly slower in Europe. Of the 125 400 units sector growth until October, 65 600 came from the Model-3.

Q4 of this year will be special, with high pend-up demand for PHEVs from German brands and BEV sales being pulled ahead in the Netherlands, where the benefit in kind value for the private use of company cars increases from 4 % to 8 % of the list price; PHEVs and ICEs are taxed for 22 % of the list price. On top of that, Tesla needs to reach, or better, beat the guidance for global deliveries in 2019. 360 000 units were the lower end, which requires at least 105 000 global deliveries in Q4, “only” 8000 more than in Q3. December deliveries of Tesla Model-3 may reach 10 000 units in the Netherlands alone.

6 % share possible in December, higher than in China

Plug-in volumes and shares from January to October have been consistently above 2018. YTD, the increase is 39 %, share is 3 %, compared to 2,1 % for the same period of last year. Volume increased by 125 400 units, +128 000 for BEVs and minus 2600 for PHEVs.

Unless supply is constrained in Q4, plug-ins can reach 6 % of the European light vehicle market in December. For the first time since many years, this is higher than what we expect in China. For the European market of Passenger Cars and LCVs, we see only a slight decline of 0,2 % to 17,8 million units, not accounting for Russia, Ukraine, Turkey. Our best estimate for the year is 579 000 units and a plug-in market share of 3,25 %.

Share peaks in March, June, September and December relate to high Tesla deliveries at the end of each quarter.

Europe shines in an otherwise gloomy H2

Except for the 2015 boom and 2016 bust of PHEV sales in the Netherlands, EV adoption in Europe is a story of consistent volume increases. It follows our expectation of a general adoption trend, which is unlikely to follow a straight line, but rather the S-curve.
Weaknesses in PHEV portfolios and supply constraints of some BEVs have delimited plug in growth during the first 3 quarters of 2019. Also, there is this persistent rumour that traditional OEM hold back EV sales in 2019 to count them in 2020 sales for achieving the 2020/21 CO2 limits. We can’t see this in the recent numbers, but the year is not over, yet.

579 000 BEV+PHEV sales beat our expectations from earlier this year and give a year-on-year growth of 42 %, which a lot better than the declines we have seen in other regions during the 2nd half of 2019. China NEV sales are in free fall since July (check the China article for more info) and current US sales compare to the Model-3 boom of 2018 H2. Europe stands between growth and decline of global plug-in sales this year.

China NEV Sales for 2019 Q3 + October

The steep decline in China’s NEV sales continues and it is accelerating. Preliminary results for October indicate 48 % fewer deliveries than in October 2018; even October 2017 was higher. The slump started in July, after the announce subsidy reductions became effective and the recent trend has confounded policy makers and market observers alike. Purchase incentives for NEVs have been cut before, but this time, the usual recovery after 2-3 months did not materialise. The prolonged crash was unlikely a part of the plan. The MIIT, setting the course for the NEV industry, is determined to deflate a sector that showed signs of overheating and is being overcrowded by new-comers with uncertain viability. Apart from subsidy cuts, new barriers for entry have been established, limiting the number of manufacturing subcontractors, demand a minimum of R&D funds and production capacity. Requirements for battery capacity and esp. safety were increased another time. Battery fires and recalls have high public awareness and cause suspicion. The combined effect of measures and events is now broad based. Even the market leaders post big losses in their NEV business and the volume erosion among smaller players with 2-3 years of market presence speaks trouble. The overall Chinese car market has been in decline for 16 consecutive months now, while the sales of NEVs kept growing, at least until June. It is for the strong results from H1 that year-to-date, the balance is still positive. 963 000 NEV passenger cars and LCVs have been delivered from January to October, 19 % more than in the same period last year. The forecast for 2019 has a lot more uncertainty than last year. Our contacts in China do not expect a recovery during the last 2 months of the year. Our outlook for 2019 is a volume of 1,1 to 1,2 million NEVs, (Cars, SUVs, MPVs and LCVs) in a light vehicle market of 25,4 million, 8 % lower than 2018. The best estimate, 1164k, converts to a NEV share of 4,6 % and zero growth over 2018. The fundamentals, like Government targets for EV deployment, ICE restrictions, EV portfolios and charging infrastructure investments speak for further NEV growth, but we do not see the sector returning to the relentless 60-100 % growth rates of previous years. Officials have re-stated the target to produce 2 million NEVs (BEV, PHEV, FCEV) in 2020. This includes 150k-200k of commercial vehicles and buses. With the current conditions and sentiment, these numbers could be hard to reach, but we expect at least an improvement relative to the current situation.

Dwindling Demand and Supply

NEV sales took another dive in September, -25 %, following -12 % in August and – 2 % in July. For October the losses accelerated further, with preliminary data showing a dismal 48 % decline, including estimates for imports and LCVs. For market shares, the reductions are less, as the total car market contracted by 3 % to 7 % y-o-y during these months. The NEV share trend is now approaching the level of 2017, which is far below the 2018 actuals and the trend during 2019 H1.
NEV subsidies were reduced several times in past years. The current trend reflects more than just lower demand from reduced handouts. NEVs may experience their first confidence crisis: The Government now pushes for quality instead of quantity, for competition instead of subsidies, OEMs fall back to more profitable ICE production, consumers lose faith in struggling NEV makers, and over-optimistic vehicle specification claims. Aftermarket support is lagging and there have been battery fires. On top of that, purchase taxes on conventionally powered vehicles have been reduced by some percent in order to stimulate the vehicle market.

Zero Growth this Year

The harshness of the downturn was not expected by policy makers, nor most market observers, including us. At the end of 2018, 2 million in 2019 seemed plausible, in June, most forecasts for the year were still at 1,6 million, reduced to 1,5 million after the July result. We are now expecting 1,1 to 1,2 million light vehicle NEVs for 2019, mid-point this means zero growth this year. In a contracting overall market, down ca 8 % from last year, the NEV share is still growing from 4,2 % to 4,6 %.

It is hard to find a silver lining in this development. One is, hopefully, more reasonable planning, going forward. Another should be fewer bottlenecks in raw materials and battery supply.

The following section analyses how NEV makers sales volumes are affected by the crash.

The Meltdowns Winners and Losers

Year-to-date October, NEV sales still show +19 % versus Jan-Oct 2018, living on the strong first half of 2019. This analysis is for the last 4 months of consecutive decline and how it played out for the largest Chinese OEM, foreign brands and start-ups.

Size is no warrant, as the losses of the largest OEMs of New Energy Vehicle witness. BYD sales were 37 % lower than for July-Oct 2018, BAIC -12 %, Geely -34 %, SAIC -55 %. As the NEV total was down 25 % most of them lost sector share, too. BAIC could avoid this with an upgraded EU-Series Sedan (aka EU5) and GAC gained by their Aion S Sedan, both popular among ride hailers. Great Wall did comparably well with their recently created “Ora” sub-brand, even if the sequential volume trend during 2019 is less impressive.

Losses of Chery, Changan and Dongfeng were substantial and deliveries were slow and erratic on their previous best sellers. JAC acts as production contractor to VW and NIO and seems to have abandoned deliveries of JAC branded models altogether.

The balance for foreign brands looks very positive in this context, as many of them had low sales in 2018. Much of the gains come from localised models in J/Vs with Chinese OEMs. GM’s low-cost mini-EV brand Baojun, made by SAIC, is still selling in high numbers, 25k during the last 4 months. VW increased 5-fold, Hyundai Kia +50 %, BMW +34 %. Tesla, still all imported, was up 275 % from beginning Model-3 deliveries.

Others (Ford, FCA, JLR, Nissan, PSA, Toyota, Honda, Daimler, Volvo) were less successful, with low deliveries from their J/Vs and dwindling sales for H2.
Among start-ups and smaller players, NIO, Hozon, X-Peng, WM, FAW and Hanteng increased sales. The balance looks grim for 15 other, distressed makers. Their combined volume was 63k units for July-Oct last year, down to less than 5k for this term. We want to avoid their exposure here; contact us if you must have more information.

Rigid plans, but high uncertainties

The Chinese NEV fleet (vehicle population) is approaching 3,6 million for December 2019, counting light vehicles, 45 % more than at the end 2018. In addition, there are 600 000 heavy electric vehicle on the road in China, most of them buses in metro areas.

The MIIT has restated the goal of 2 million NEV produced in 2020 and more than 5 million NEVs on the road at the end of 2020. While the 5 million stock target is well within reach, the 2 million production target would mean a return to growth at a rate of over 50 % in 2020. With the prevailing market sentiment, it would mean vast oversupply, unless Chinese makers start to export in much larger quantities than the 3500 units of this year. Further subsidy cuts during 2020, which were considered by officials, should not be expected. Rather the opposite is needed. The next round of cuts is due for 2021 anyway.

The Chinese NEV market remains a hard place to navigate. Expect the unexpected.

USA Plug-in Sales for 2019 YTD October

236 700 plug-in vehicle were delivered in the first 3 quarters of 2019, an increase of just 2 % compared to Q1-Q3 of 2018. Including the October result, 23 200 units, which was 33 % lower than in Oct 2018, the sector is now in reverse for the year. The negative trend is much likely to stay for the remainder of 2019 and the first half of 2020. The bleak picture is caused by a variety of factors. First, the numbers compare to the period H2-2018, when Tesla delivered on all the pend up demand for the Model-3. Sales were in USA and Canada only; exports to other markets did not start before Q1 of 2019.

The second observation is that many OEM sold fewer plug-ins in 2019 that they did last year. Whereas the European importers held the line, plug-in sales by the Big-3 were down 28 %, so far and Japanese brands lost 22 %. American and Japanese brands stand for 44 % rsp 38 % of US light vehicle sales, but have introduced only one new plug-ins this year, the Subaru Crosstrack PHEV. Tesla sales are 9 % up year-to-date and stand for 55 % of the plug-in volume in the US. Counting BEVs only, the Tesla share is 76 %.

Our expectation for the year is a total of 337 ooo units of BEV+PHEV sales, 74 % of them pure electric. The volume decrease compared to 2018 is 6 %. For 2020, manufacturers have announced over 20 new BEV and PHEV entries, most of them PHEVs from European brands. The new big-sellers will be from Tesla and Ford, though. The Model-Y and Mach-E enter the very popular compact/mid-size cross-over segment, being very close in size, price and specification. The given contest in next years’s EV market and with plenty of attention and demand.

More Losses than Gains

The chart compares the quarterly USA plug-in sales of 2019 compared to last year. Q4 of 2019 are our estimates. Tesla sales are down for the 2nd half of 2019 as they compare to the 2018 period when all Model-3 deliveries covered the demand and back-log in North America. Tesla volumes for the year will still be approximately 9 % higher than in 2018. The YTD sales of OEM other than Tesla with last year’s reveal a bleaker picture: a combined decrease of 16 %.

Hyundai-Kia (new Kona EV), Volkswagen (e-Golf, new Audi e-tron quattro), Daimler (Merc. GLC) and Jaguar i-Pace gained, all others posted heavy losses. Nissan Leaf sales remain weak, the new 62 kWh version is overpriced and still without state-of-the-art battery cooling. GM dropped the Volt and reached the 200 000 unit limit in Q2, receiving only half of the $7500 federal EV tax credit in Q4. Ford dropped the slow selling Focus EV and C-Max PHEV and is left with the ageing Fusion PHEV. Toyota offers nothing but the 3 year old Prius PHEV, the Honda Clarity PHEV is in pre-mature decline. BMW still lacks the replacements for 330e and X5 PHEVs in the US.

Boom and Downturn

The USA plug-in sales history had a temporary decline before and, like for 2019, it was supply related: Toyota phased out the 1st generation Prius PHEV without having the successor ready and GM lost volume during the change-over to the 2nd generation Volt.

2018 had exceptional growth and nearly all of it was created by just one new entry, the Tesla Model-3. Achieving the 2017-18 growth for another year is hardly possible. Tesla delivered 140 000 Model-3 in USA last year and exports were to Canada only. This year, Model-3 deliveries in the US will increase by another 15-20 000 units, but they do not compensate for the volume losses of other, ageing and discontinued entries.

The current impression is lack of choice and lack of news, especially from the Big-3 and Japanese OEM, which stand for 82 % of total light vehicle sale this year. The situation will change a lot in 2020, with a broad based increase from new models with high sales potential.

What to expect for next year

Judging by the OEM announcements, 2020 promises to be the year with the highest number of new EV introductions ever, over 20 new entries, 9 of them BEVs. Most of them will be for the 2021 model-year, which means that most of 2020 growth will happen in Q3 and Q4. The announcements include the Tesla Model-Y, Ford Mustang Mach-E, the VW ID.4 (ak ID Crozz), the Porsche Taycan, 2 BEVs from Volvo, PHEV variants for Jeep and more PHEVs from Europe, Japan and Korea. Rivian wants to deliver their first R1T’s by the end of the year.Most significant is be the arrival of more affordable plug-ins for SUV-Crossovers. More than 6 million ICE units were sold in the C/D-SUV category last year, 1,5 million more than in the C/D-car segments. We can look forward to a healthy boost in EV adoption for 2020 and 2021. The introduction timing of the new and upgraded PHEVs from Europe is still uncertain; demand for them is very strong in Europe, following months of hiatus. Sector growth in 2020 will largely depend on the ramp-up of Model-Y and Mustang Mach-E.

Global EV Sales for the 1st Half of 2019

It includes all BEV and PHEV passenger cars sales, light trucks in the Americas and light commercial vehicle in Europe and Asia. Their share in the global light vehicle market was 3,5 % in June and 2,5 % for 2019 H1. 74 % of sales were all-electric (BEV) and 26 % were plug-in hybrids (PHEV), a massive shift of 11 % towards BEVs, compared to the 1st half of 2018. It was driven by the full availability of the Tesla Model-3, revised taxation/subsidy schemes and the Europe introduction of the more stringent WLTP (Worldwide Harmonised Light Vehicle Test Procedure) for CO2 emissions, all leading to higher demand for pure EVs.
Preliminary results for the month of July show significantly slower sector growth than for H1, only 4 % globally. The two main reasons: (1) In July, revised subsidy schemes became fully effective in China, excluding vehicles below 250 km e-range and cutting subsidies into half for BEVs with longer range. NEV sales (New Energy Vehicles) contracted by 2 % in China in July, following 79 % growth in 2018 and 66 % in 2019 H1. We expect a decline for August as well, followed by a gradual recovery to growth rates of 30 % for the remainder of the year. (2) The US market increased by 89 % last year; most of the growth came from the Tesla Model-3 and in the 2nd half of 2018. Once escaping production hell, Model-3 deliveries were as high as they could get, covering the huge order back-log. Last years’ increase can not be expected for 2019, esp. when most brands other than Tesla sell fewer Plug-ins in the US than in 2018.

By its sheer volume, China is still the largest growth contributor, with 257 000 units (+66 %) added to a total of 645 000 units during the first 6 months. Europe growth for H1 was 34 %, +67 000 units, still held back by tight inventories, waiting lists for popular BEVs and the run-out of high-selling PHEVs. Plug-in sales in USA increased by 23 % in H1, +27 500 units, and with the Model-3 increasing by 45 000 units it means declining sales for many others. Among the fastest growing market with over 1000 units sales were Ireland (+183 %), Netherlands (120 %), Denmark (+86 %) and Poland (+81 %). Many markets in Southeast Asia have triple-digit growth.
The share leader is Norway, as usual. Counting passenger cars only, 58 % of new car sales were electrically chargeable this year. Iceland comes 2nd with 18 % and Sweden 3rd with 11 % for 2019 H1. Our Europe story on H1 has more details on this, but please note that shares presented there, include LCVs, which drag the average shares down. Among the larger economies, China leads with a plug-in share of 6 %. Among other car markets with over 1 million total sales, Canada leads with 2,7 %, all others show 2,5 % or less for H1 combined. The best selling plug-in, by a wide margin, was the Tesla Model-3, with ca 128 000 units delivered globally during H1 of 2019. This puts it close to the leading ICE car models in the Mid-Luxury car segment, still carrying the handicap of import duties in the vast Chinese EV market. In the US it outsells the corresponding ICE entries of BMW, Mercedes and Audi by a ratio of two to one.

57 % of H1 Plug-in sales were in China

China has further advanced in the EV industry with 66 % more NEVs sold year-on-year in H1 and stood for 57 % of global plug-in sales. In June, the NEV share in all light vehicles sold was as high as 8,1 %. In contrast to booming NEV sales, the downturn in the overall car market continued. H1 light vehicle sales in China were off over 12 % compared to H1 of last year. ICE-only sales were down 14 %. On an annualised basis, the 2019 ICE volume is lower by 2,5 million units compared to the 2017 market peak, while NEVs gain nearly 1 million compared to 2017.

Losses in Japan are related to the decline of Toyota Prius Plug-in sales and the transition of the Nissan Leaf to the 60 kWh version. Also the #3 in the sales ranking, Mitsubishi Outlander, stayed just flat. Few bright points otherwise.

Europe CO2 test procedures and tax schemes have become tougher on PHEVs in several countries and it shows in the ratios of BEV to PHEVs sold. The BEV share in the mix increased from 51 % to 68 %. Volumes of BEVs increased by 79 %, while PHEVs lost 12 % versus H1 of 2018. The increases for total Europe was 34 %, but could have been higher with better availability of popular models. You find more info on the Europe results here.
Nearly all plug-in growth in USA can be attributed to the Tesla Model-3; many others were in reverse. The summary for the USA results is here. “Others” include Canada (26 900 sales so far, +24 %), South Korea (16 700 sales, +43 %) and many fast growing, smaller EV markets around the world.

Model-3 retains special status

As expected and still impressive, the new Tesla was the world’s best selling plug-in in H1 and by a large margin. Sales volumes approach those of premium competitors selling 300 to 400 000 units per year. Once production is localised in China, global volumes can be on par with the leaders in the mid-luxury segment.

Beneath the #1, the changes in ranking were many, compared to 2018: The BAIC EC-Series sub-compact stumbled over subsidy hurdles, lost over 30 000 sales and is now on place 38. Meanwhile, BAIC revived the EU-Series, a previous also-ran. It raised to #2 like a Phoenix. The Nissan Leaf retained the #3 position despite softening sales. The next 10 contenders all had sales of 20 to 30k for the first half year. Tesla was in that ballpark in H1 of last year, but lost plenty of volume on S & X this year and fell out the top-10. The BYD Yuan EV, a small SUV with 400 km e-range became an instant hit and sold 29 000 units in China since March.

The Mitsubishi Outlander PHEV is still going strong. With its relatively large battery of 12 kWh it stayed under the 50g CO2 limit even in the stricter WLTP. In Europe it was an attractive substitute for all discontinued PHEVs. The BYD e5 and Geely Emgrand BEVs are attractive in the fast growing ride hailing (like DiDi) business and gained further volume. The Renault Zoe climbed 3 ranks, even if it is replaced by the end of the year.

Note that only 2 out the top-10 are now PHEVs and they are both SUVs.

5 times more MHEVs within a year

Outside the Plug-in space a new breed of hybrids has entered the scene: So called Mild Hybrids, aka MHEV. They use an electric motor as engine assist and recuperate some kinetic energy during deceleration. They don’t charge externally and don’t drive all-electric (yet). Fuel savings are typically around 10 % versus a ICE-only car, but the technology has lower cost than for HEVs and is easier to integrate into traditional powertrains. MHEVs have become standard variants in many cases, esp. by German OEM and they sell in high volumes in e.g the Ram pick-up truck by Fiat-Chrysler. Counting passenger vehicles, the entire space of BEV, PHEV, HEV and MHEV had a volume of 3,05 million “xEV” sales in 2019 H1, BEV 820k, PHEV 296k, HEV 1370k and MHEV 564k . The map shows the split into geographies and concepts for the first half of 2019. Compared to 2018 H1 the changes are as follows: BEV +75 %, PHEV +4 %, HEV +16 %, MHEV +550 % and 51 % for all xEV together.

The Japan ties to HEVs remain exceptional: 89 % of all worldwide HEV sales are from Japanese brands, 43 % of all HEV sales reside in Japan and one in four car sales in Japan is a hybrid.

Japan is still slow to adopt plug-ins and MHEVs. The reasons are many: Solid leadership in HEV design and production is one reason. Lack of domestic plug-in choices is another: only 6 domestic models are offered, 3 of them (Leaf EV, Prius PHEV and Outlander PHEV) stand for 90 % of all plug-in sales; imports represent a small niche. Tax savings on eco-cars are similar for PEVs and the best HEVs. Only 5 MHEV variants are available and they appear pointless against over 70 HEV models with better fuel savings.

Plug-in growth is slowing down

Back to plug-ins, the 1st half of 2019 had healthy growth, +46 % y-o-y, even if the market share development has become unsteady. The peaks and valleys partly relate to high end-of quarter deliveries of The Tesla Model-3. The main reason is in China NEV sales, though. Subsidies were removed for EVs below 250 km e-range and cut in half for all other models. The transition period started in April and the new rules became fully effective in July. NEV sales were pulled ahead to March and June in anticipation of the tougher conditions.

Preliminary results for July show the full impact of the new scheme and the run on NEVs in June. For the remainder of the year we expect much slower growth in China. For the global growth trend this means a reduction from the 46 % we had in the first half to 15-20 % for the rest of 2019.

EV population: One in 175

For the entire 2019, we are expecting plug-in sales of 2,5 to 2,7 million units. This is lower than our previous outlook of 3 million and mainly relates to the subsidy cuts in China, which were more severe than announced in earlier policy plans. Also, PEV uptake in the US is abnormally weak for anything other than the Model-3.

In terms of global share it means 2,7 – 2,9 % for 2019, which is still 7 times higher than just 5 years ago. For details about the volume and share trend by region, please refer to our earlier H1 articles about USA and Europe, or contact us directly. Our next article will cover the Chinese market and its intricacies.

By the end of 2019, the plug-in vehicle population will reach nearly 8 million worldwide, an increase of 49 % over December 2018. With a global light vehicle population of around 1,4 billion, this is just 0,57 %, one in 175. Growth is exponential, though, and the overall picture will change much faster than historic sales suggest. Adoption of successful technology follows S-curves, not straight lines.

China NEV Sales for 2019 H1 + July and August

We held off the 2019 H1 summary for a while in order to get a better idea about the impact of sharply reduced NEV subsidies from July onwards. The overall Chinese car market has been in decline for 14 consecutive months now, while the sales of NEVs continued with rapid growth, at least until June. From January to June, ICE-only vehicles lost nearly 2 Million sales (-15%) compared to 2018 H1 and NEVs increased by 260 000 units (+66 %) for the same period.

Since then, the tide has changed for NEVs as well: July NEV sales were off by -2 %, including imports and LCVs; preliminary results for August show a 13 % decline year-on-year. In summary, the changes in Government support were as follows: NEVs with an e-range below 250 km (up from 150 km last year) do not qualify for subsidies anymore, those with longer e-range have subsidies cut by around 50 %. Direct local subsidies expire, in favour of charging infrastructure investments. The new rules became fully effective in July; following a 3 month transition period with partial subsidy cuts. Some OEM have indicated to lower list prices to compensate, still, NEVs above 250 km e-range can become up to 10 % more expensive for buyers. Those under 250 km range, mostly mini- and small cars, will become much less attractive as NEVs.

Ahead of the July cuts, demand was pulled into June, which has 1/3rd higher sales than normal. The weak July and August sales partly reflected the payback for the June rush. In addition, the supply of several low-range BEVs was reduced or halted, either for further battery upgrades, or infinitely. Smaller makers of EVs in the lower price categories we affected the most during H1, but in July and August, losses have also spread among the more resilient players.

The forecast for 2019 has a lot more uncertainty than last year. Year-to date August, plug-in sector sales in China are still up 44 % compared to 2018, but in decline for the first time since 18 months. Makers of cars with less than 250 km e-range must upgrade batteries yet another time to keep them in the market. Above that barrier there is now only little incentive for EV makers to escape subsidy cuts by e-range upgrades. To make things worse, new cases of battery fires (less than 100 incidents, but still) have disturbed the confidence of consumers and legislators. The overall Chinese car market is still in reverse; the rates of decline are lower now, but they compare to the weakening monthly data of 2018 H2.

The fundamentals, like Government targets for EV deployment, ICE restrictions, EV portfolios and charging infrastructure investments speak for further NEV growth, but it will we slower than the 75 % rsp 79 % of the previous two years. Our outlook for 2019 is a volume of 1,5 to 1,6 million NEVs, (Cars, SUVs, MPVs and LCVs) in a light vehicle market of 25,6 million, 7 % lower than 2018. The best estimate, 1540k, converts to a NEV share of 6,0 % and a growth of 33 % over 2018.

Reducing dependence on subsidies

Subsidy reductions in China are not a new thing. The Government has risen the bar for approvals several times to push the EV and battery industry towards longer e-range and more advanced battery technology. The picture shows the stepwise reductions of central subsidies, which were considerable. Until 2018, EV makers have mostly succeeded to avoid cuts by battery upgrades and amazingly fast changes in product portfolios to meet new requirements.

The new regime goes further and enforces targets to consolidate the auto industry to fewer and more competitive players, which are not depending on generous state support. In addition, direct local subsidies from provinces and cities were dropped and replaced by support for the necessary charging infrastructure. Times will get tougher for makers with insufficient capital / development funds and sub-standard models.

Impact on NEV sales by OEM’s so far

Year-to-date, growth in NEV sales is still positive for most OEMs. Among the larger players, SAIC, Chery, Hawtai and JMC lost sales, while others, notably Great Wall (new ORA brand) and VW (new Passat PHEV, Tiguan PHEV and e-Lavida, all China made) multiplied their sales compared to last year. Also Toyota, Nissan and Nissan have introduced locally produced models, which explains their growth from next to nothing last year. None of the EV start-ups (e.g NIO, WM) made it into the top-10, yet.

Until August, overall NEVs were still 60 % higher than Jan-Aug last year, but the slump in July and August has also affected more resilient makers like BYD, BAIC, Geely, Changan and JAC, which posted double digit %-losses in volume compared to July-August sales last year.

On model-level, 2019 sales were highly erratic and can hardly be explained by consumer preferences. Sales of big-sellers like e.g. the BAIC EC series and BYD e5 were on and off and on again, revealing the struggle of Chinese EV makers to adjust portfolios and production to new requirements and restrictions. We expect this turmoil to calm down in Q4, but we do not see the sector returning to the relentless 60-100 % growth rates of previous years.

Recovery in sight

The comparably modest increases in April and May gave a first indication of the impact of the stepwise reductions in EV support. Then, June sales were overshooting by at least 30 %, prior to further subsidy cuts in July. The slump in July and August therefore contains a good portion of “pay-back” and is unlikely to reflect a new, downward trend in NEV sales.We expect a gradual recovery starting in September and increases of 20-30 % over last year for the remaining months. The resulting average NEV share for 2019 is 6 %, which is #5 in the world ranking and two times higher than in any other vehicle market with more than 1 million annual sales. Only Norway, Sweden, Iceland and the Netherlands have higher EV shares, so far.

Spectacular sales and growth history

China is, by far, the largest market for Plug-Ins. 2018 NEV sales reached 1 160 000 units, counting passenger cars and light commercial vehicles. This compared to 410 000 in Europe and 360 000 in USA. In 2019, China stood for 55 % of all 1,45 million global plug-in sales, so far, counting light vehicles. On top of that come 75 000 medium and heavy commercial vehicles, most of them electric metro buses.

Regarding the weak July and August numbers, is the party over? Some math on this: Volume/share growth of successful, new technology is usually along S-curves and progressive until the deflection point. In %-terms, the increases get lower year by year, but deviations from the long term trend are common. By this logic, the 2018 result (+79 %) was over-shooting relative to trend, which translates to lower growth for 2019 to get back to the trend-line. So much for theory.Our best estimate for 2019 is a NEV total of 1,5 to 1,6 million, with a share of 6 % in light vehicle sales.

EV population above targets

The Chinese NEV fleet (vehicle population) is likely to reach 4 million in December 2019, counting light vehicles, 60 % more than at the end 2018. In addition, there are 600 000 heavy electric vehicle on the road in China, most of them buses in metro areas.

5 million NEVs on the road by the end of 2020 is a previously stated target of Chinese authorities. This is for all vehicle types combined, including LCVs, trucks and buses. Even with a slower pace for this this year and the next, this target will be met ahead of time. The drastic subsidy cuts this year can be seen in the light of this: Avoiding a bubble and creating a more competitive EV industry.

USA Plug-in Sales for the First Half of 2019

149 500 plug-in vehicle were delivered in the first half of 2019, an increase of 23 % compared to H1 of 2018. 72 % were pure electric (BEV) and 28 % were plug-in hybrids. The plug-in share of the total light vehicle market was 1,8 % for the 1st half of 2019, compared to 1,4 % in H1 of 2018. Despite the sufficiently lamented Q1 result, Tesla represented 57 % of all plug-in deliveries in the US. Counting BEVs only, Tesla’s share was 78 %. Four out of five Tesla sales in USA were for the Model-3, which remains the best selling plug-in, worldwide.

The Model-3 did not inspire the market towards more plug-in sales in general. Its qualities are in a class of its owns and most other plug-in models posted lower sales than in the previous H1, esp. in the car category, while SUVs faired better. Other inhibitors are the discontinuation of the GM Volt, the change-over to the new BMW X5, BMW 3-Series, Kia Soul and the Sonata/Optima siblings from Hyundai-Kia. Nissan Leaf sales remained sluggish, as battery and charging capabilities are questioned for the current version and sales of the revised 60 kWh version have just started.

For the 2nd half of 2019 we are expecting around 220 000 plug-in sales, for a total of 370 000 units for the year. Even if the increase over the 1st half of 2019 is significant, growth rates y-o-y will be negative, comparing the coming months with the same period of last year, when Tesla filled the huge reservation back-log and had no sales outside USA and Canada.

Back to Trend

The US had exceptional plug-in growth in 2018 and nearly all of it was created by just one new entry, the Tesla Model-3. While 2018 looked like overshooting, 2019 is back to the long term trend.

Achieving the 2017-18 growth for another year is hardly possible this year, simply by the math. Tesla delivered 140 000 Model-3 in USA last year and exports were to Canada only. This year, Model-3 deliveries in the US may increase by another 20 000 units, but there is not enough momentum in the sales from other OEM to generate significant growth.

The situation is likely to improve in Q4, when new, European and Asian import models become visible in the sales statistics. Late in the year, their impact on the overall result will likely be small. For 2019 we are therefore expecting only around 370 000 plug-in sales in total. The uncertainty in this number relates mostly to the extend that Tesla delivers on the 360-400 000 guidance for global 2019 sales. 55 % of global Tesla sales are typically in USA. We are expecting slightly more than 200 000 units to be delivered to US customers.

Tesla quarterly deliveries back on track

Tesla is dominating the US plug-in market and any 2019 outlook has little bearing without a Tesla outlook. The diagram shows the global deliveries of Tesla as reported in the quarterly updates and the Model-3 USA / export volumes as we have collected them from our sources around the world. Q3 and Q4 of 2019 are our estimates based on the guidance of 360 000 – 400 000 Tesla deliveries for the year. We think that 370 000 units from Tesla is a safe, doable volume for the year. That is is the same number as for our USA 2019 plug-in sales outlook is a pure coincidence. There could be additional deliveries of 5-10k Model-3 from the Shanghai plant, which starts production in November or December this year.

A short recap for the last 12 months of sales: Q3 and Q4 of 2018 addressed the huge reservation/order back-log for the Model-3, with sales in USA and Canada only and few build-combinations available. Tesla entered Q1 of 2019 with depleted inventories and had to fill the pipeline for export sales. On top of that handle the intricacies of logistics and paperwork in 20 additional markets. Q1 can be considered an exception and Q2 proofed that neither lack of demand nor supply were persistent issues.

Despite an average sales price of nearly $50 000, the Model-3 has 30 % share in the US mid luxury segment and outsold contenders like the Mercedes C-Class, BMW 3-Series and Audi A4 by a factor of two and more. Tesla reported that order books grew faster than Q2 supply and we are therefore confident that Q3 and Q4 deliveries exceed those of Q2.

Limited growth this year

Comparing the YTD sales of OEM other than Tesla with last year’s reveals a bleak picture: a combined decrease of 19 % for H1. BEVs held up better (+3 %, excl. Tesla) than PHEVs (-28 %), thanks to a boost in e-Golf sales and the new Audi E-tron Quattro. The losses for PHEVs were caused by the demise of the Chevy Volt, the run-out of previous generation 3-Series and X5 and weak sales of the Toyota Prius.

The 2nd half of 2019 will see several new model introductions with decent volume potential, like the new BMW 3-Series PHEV, BMW X5 PHEV, VW Passat PHEV. Hyundai-Kia will bring the Tucson and Sportage PHEVs, JLR could bring the Evoque PHEV and may even introduce their large Range Rovers in the US. We spotted 20 sales in Canada for June. Most of these new entries are imports and will arrive late in the year, if at all.

Nissan Leaf sales suffered from the “rapid gate” and should recover with the new 60 kWh version, available now. The Big-3 and Toyota likely remain in contraction mode for the remainder of 2019. Together, they stand for 58 % of US light vehicle sales, but no news from them in sight for this year. Our optimism for this year is therefore limited. 370 000 plug-ins is our best estimate for now, more than half to come from Tesla.

Heavy losses for PHEVs

H1 of 2019 marks a trend change: PHEV not only lost share in the EV mix, in H1 they also lost volume (-28 % vs H1 of 2018). We have noted this in Europe, too, when WLTP and reduced tax incentives for PHEVs caused the decline. Are the days of PHEVs counted sooner than expected? BEVs are the much likely end-game, with zero emission, design potential and cost reductions all superior to PHEVs. Today, PHEVs ease the transition to electrification for parts of the industry and consumers. They still make sense where duty cycles exceed BEV capabilities or when charging is not ensured.

These arguments become weaker, as new BEVs offer more range, power and versatility at constant or lower prices. GM axed the Volt partly by this reasoning. Many European PHEVs are being upgraded for the 2020 model-year, for longer e-range and lower test cycle emissions. This will recover some of their decline. Mid and long term, our view is that PHEVs will keep loosing share in the EV mix, not at least because of Tesla growth with Model-3 and Model-Y. For volumes they are likely to stay flat, or show small growth at best.

A word on Fuel Cell EVs, not shown in the chart. They represent 0,7 % of this years EV sales, with a mere 1124 units delivered in the first 6 months, down 20 % from H1 of 2018. The Toyota Mirai stands for 85 % of the volume. The other two are the Honda Clarity FCEV and the Hyundai Nexo FCEV.

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Article Type: News

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