Europe overtakes China as biggest EV market
Most EU member states have a CO2-based car taxation system in place. And it seams to be working: there is a clear correlation between government incentives for EVs and their market shares.
ACEA reports nearly one in six passenger cars registered in the European Union in the fourth quarter of 2020 was an electrically-chargeable vehicle (16.5%). Stimulus packages introduced by governments to boost demand following the unprecedented impact of COVID-19 on car sales, helped drive demand for low and zero-emission cars.
For the first time since 2015, Europe overtook China in 2020 as the region that registered more electrically-chargeable vehicles. The numbers for 2020: 1.3 million units in Europe, 1.2 million in China. In 2019, those numbers were 465,000 and 1.1 million, according to the International Energy Agency.
It’s quite a feat for Europe to overtake China, it’s even more impressive to do it in such a big leap. Those numbers are confirmed by Dataforce when looking at True Fleet registrations. As a reminder, True Fleet includes all registrations to companies but excluding categories like short-term rentals and demo vehicles.
|2020||% increase over 2019|
Nevertheless, the total number of electric cars on the roads is still low. Today, just 0.4% of all cars on EU roads are either plug-in hybrids (PHEV) or battery-electric (BEV), say ACEA in a recent report. The discrepancies between the markets are impressive, though. In the Netherlands, one in every 45 cars has a plug whereas that's only one in 500 in Spain.
Fleet renewal in general and electrification in particular takes time. It also depends on incentives. In recent years, many large EU countries have adopted a taxation system that promotes low-to-zero emission vehicles and sometimes makes ICE cars less attractive. It is mainly the corporate fleets that take advantage of this incentivisation as their vehicles have a shorter use cycle. Also, their cars are in many cases perk cars, with an above-average sticker price. As such, company car drivers have easier access to BEVs and PHEVs than private consumers.
That access is reflected in Dataforce figures that clearly demonstrate fleets have been more eager to adopt EVs than the general market.
“The numbers clearly show the fleets are welcoming the electrification of their fleet, despite the COVID-19 pandemic. We see in the figures more and more fleets are realising that PHEVs and BEVs can and should be replacing ICE engines where viable while the OEMs themselves are pushing to reach the CAFE targets set by the EU. This has seemingly created a very fertile ground for the heavier adoption of electric vehicles, and we expect this to continue. Fleets are also a feeder market for used cars and their short life cycle will help fuel the private market with more affordable BEVs and PHEVs also further speeding up mass adoption,” clarifies Richard Worrow, International Account Manager at Dataforce GmbH.
By the end of the decade, the EV industry is likely to hit the 2.5 million unit mark (BEVs and PHEVs combined). With emission norms becoming ever more stringent, the number of PHEV models will eventually decrease, whereas BEVs will become the powertrain of choice, according to Frost & Sullivan. According to the 2020 Global Fleet Survey organised by Nexus Communication, corporate fleet managers expect their fleet to be 32% electric by 2025.
“Non-monetary or tax incentives are likely to be more attractive for buyers as countries with the highest EV penetration ratio such as Norway and the Netherlands offer these rather than cash incentives,” said Prajyot Sathe, Automotive and Transportation Industry Manager at Frost & Sullivan.
"Life-cycle incentives would also help with second-owner registrations further ensuring the continued correct usage of the powertrain. We don’t think there is any doubt that BEVs will be the future, but PHEVs will help to get us to that future,” concludes Richard Worrow, International Account Manager at Dataforce GmbH.
Authors: Dieter Quartier & Benjamin Uyttebroeck, with the support of Dataforce