5 Dec 19

Why manufacturers aren’t delivering your EV sooner

If you have ordered an existing model in the past months, it's unlikely you will pick it up at the dealer’s before January. If you have put your name down for a model that is yet to be launched, you will probably have to wait until the end of 2020. What’s going on?

Getting electric vehicles to market has always been troublesome for Western OEMs. From the first-gen Renault Zoé to the Tesla Model 3 and the Audi e-tron: they have all arrived on the market later than planned. Somehow, manufacturers have a tendency of promising more than they can deliver, perhaps underestimating the challenges behind developing an EV and getting the supply chain and factories ready to build them.

It seems that the Asian manufacturers have been better at managing this. It should hardly come as a surprise that in the land of affordable EVs with a decent range, it’s the Koreans and Japanese that rule. Hyundai Ioniq and Kona, Kia Niro, Nissan Leaf: they head the electric vehicle sales charts in Europe. They give the nearly pre-historic, totally obsolete VW e-Golf and equally retirement-deserving BMW i3 a run for their money.

Super credits

Whichever mass-production electric model you may have ordered in the past months, chances are you won’t see your EV arrive at the dealer’s before the first months of 2020. The same goes for the premium crossovers that go by the name Audi e-tron, Jaguar I-Pace or Mercedes EQC, incidentally. Is battery supply the issue, or is there more at play?

There are indeed only a handful of suppliers  - mainly Chinese, Korean and Japanese – on the global lithium ion cell market and they are calling the shots. If you want cells as an OEM, you either pay a hefty price, or you wait until prices come down. The longer you wait, the cheaper you can buy, essentially. Guess which option most OEMs choose?

There is another, more important thing obstructing the delivery of EVs: the so-called super credits. Starting in 2020, every vehicle that emits less than 50g/km counts double in the calculation of an OEMs weighted average CO2 emissions. The average target is 95g/km and needs to be reached by 2021. No wonder that OEMs and their importers are postponing the delivery of as many EVs as possible.

It's also the reason why 2020 will see a multitude of new BEV and PHEV models arriving on the market, as demonstrated by the graph below.

Tesla: a different case

There is one exception to the rule: Tesla. The Californian EV maker finds itself in an entirely different situation. It doesn’t need super credits as it only builds zero-emission vehicles. In fact, this particularity is a source of income for Tesla. The European Union allows a “high-CO2 OEM” to pool its vehicles with a “low-CO2 OEM” to lower the former’s average fleet emissions. FCA Group, which in Europe mainly sells small petrol cars and has barely invested in electrification,  is indeed paying Tesla to get its emissions down and thereby avoid hefty fines in 2021.

Tesla has no interest in postponing deliveries. On the contrary. It needs cash desperately and wants to put as many Model 3, S and X on European roads as possible. That is a significant advantage for fleets wanting to go electric as quickly as possible. The entry-level Model 3 still sets you back at least €40,000 excluding VAT, so it doesn’t fit everyone’s budget.

VW ID3: not before the summer of 2020  

A car that should convince more than just pioneering managers is the Volkswagen ID3. If there is one brand that is pulling out all the stops to make e-mobility the new normal, it’s indeed Volkswagen. Their upcoming Golf-sized “EV for the people” was presented at the IAA in Frankfurt last September, but even the earliest of adopters will have to wait patiently until the summer of 2020 to take delivery of their EV.

Clearly, there is something else at play besides super credits. VW said it launched production in Zwickau on November 4 – exactly one month ago – but it is currently putting together just 30 units per day. The ramp-up will take eight months, the German OEM said. First, the factory requires a lot of modifications to accommodate the production of an entirely electric vehicle. Second, the factory will continue producing ICE vehicles until mid-2020. Only when they are discontinued will EV production really pick up speed.

When the conversion is complete, Zwickau can build 1,500 EVs per day, or up to 330,000 units per year. That is more than enough to process the current order book: so far, 30,000 people reserved the so-called 1ST Edition and 5,000 put their name down for a “regular” one. Prices have not been finalised, though.

Is VW trying to buy some time to see what the competition is doing in the next few months? Could that perhaps also be a reason to push back the first deliveries? Getting the market positioning wrong could be disastrous, especially if your survival is at stake. VW itself claims there is a good reason not to “hasten” deliveries: quality control. The first ID3s will be tested by factory workers and VW staff to make sure any issues are solved before customers take delivery of their car.

PSA: first Opel Corsa-e and Peugeot e-208 in February

If VW is not on your supplier list, chances are PSA is. And the French group has also prepared a major e-offensive, with two B-segment hatchbacks and a small premium crossover to woo their Fleet customers. Next year, they will be joined by electric models of the new Peugeot 2008 and Opel Mokka.

It has chosen a different path, though: rather than developing a bespoke platform, it opted – just like Mercedes did for the EQC – for a modular architecture that can accommodate both ICE and electric powertrains. That means PSA can produce Opel Corsas and Mokkas, Peugeots 208s and 2008s, and DS3 Crossbacks in any configuration it likes: diesel, petrol or electric. Well, sort of - there is still the 95g/km target to be reckoned with. In any case, PSA’s electric models don’t look electric. They look like regular cars.

For the fleet customer, this approach means that PSA can deliver its electric models sooner than VW. The automotive group says deliveries of the e-208, DS3 Crossback E-Tense and Corsa-e will commence in February - without specifying how long it takes to honour new orders. PSA's approach also means that the price level of the Opel Corsa-e and the Peugeot e-208 is not lower than that of the VW ID3, even though the latter belongs to the segment above. And that could eventually rain on PSA’s EV parade.

20 new electric models coming in 2020

Next year, the European market will welcome about 20 new all-electric models, from the Audi Q4 e-tron to the Volvo XC40 P8 Recharge, but don’t expect them to be available before the second half of 2020. Factories need to be adapted, battery supply chains need to be established, and the market needs to be cranked up. OEMs can only hope that the European member states will continue incentivising EV adoption - or start doing so on major markets, such as Italy.

This year's total battery-electric vehicle sales are expected to hit 350,000 units in Europe, on a total of about 15 million. That's a market share of just 2.3%. If all OEMs are to reach their CO2 target, this percentage needs to increase considerably. Fortunately, there are also plug-in hybrid models to help them out. By the looks of it, many OEMs are counting on electrified petrol cars, not least makers of big premium cars, such as Audi, BMW, Mercedes and Volvo.

Given the price level of some of the latest electric models, you start wondering whether OEMs actually want you to buy their EVs. For example, Volvo needs you to pull at least €50,000 from your pockets - excluding VAT - for the recently presented XC40 P8 Recharge. By way of comparison: the plug-in hybrid model of the same XC40 is about €12,000 cheaper. And it comes with a year of free charging, too.


Authored by: Dieter Quartier