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Europe EV Sales for 2018

by Roland Irle, EV-volumes.com

Plug-in vehicle sales in Europe reached 408 000 units in 2018, 33 % higher than in 2017. These include all Battery Electric Vehicles (BEV) and Plug-in Hybrids (PHEV) in Europe, passenger cars and light commercial vehicles. The plug-in share of the European light vehicle market was 2,3 % for the year and reached 3,5 % in December, the highest ever for a single month. In terms of volume, September and the 4th quarter was affected by the WLTP introduction and the dwindling supply of popular PHEV models.  The new WLTP requires more elaborate testing than the outgoing NEDC and back-logs in variant type approvals were common, not just for PHEVs.

Worse for PHEVs, many of them need battery upgrades to stay below 50g CO2/km in the new WLTP regime. These upgrades are being implemented, but it will take until Q3 of 2019 until all popular PHEVs are back on the market. Consequently, plug-in volumes increased by just 26 % in the 2nd half of 2018, following 43 % y-o-y increase in the 1st half. The 2018 result for plug-ins could have been at least 20k higher without the afore mentioned supply constraints. A positive side-effect was that the portion of BEVs increased to 65 % in Europe, where it was around 50 % during the previous 3 years.

The overall market was shaky during H2: 27 % overshooting in August (vs 2017), when the industry did its best to deliver ICE cars (incl PHEVs) with the outgoing, more favourable NEDC fuel economy certifications. This was followed by -21 % pay back in September, -5 % in October and -6 % in November. The year ended with +0,4 % for light vehicles (by ACEA) and a total of  17 750 000 units in the EU and EFTA markets.

An EV share of 3,5 % in December bodes well for high growth in 2019, with another 35-40 % increase in sales. New entrants will provide great support for higher adoption: The Audi e-tron quattro, Mercedes EQC, Porsche Taycan and the Tesla Model-3 are new for Europe in 2019. BMW brings the Mini in BEV variants, PSA finally enters the scene, Volvo and Land Rover launch PHEV SUVs later in the year. Many of the currently halted PHEVs will return with better batteries. The Nissan Leaf BEV, the current #1 in Europe, gets a 50 % larger battery in May, the #3, BMW i3 got 30 % more e-range for MY19. Both are likely to post further, high gains in 2019.

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Growth close to trend amid supply constraints

Except for a special event, the 2015 boom and 2016 bust of PHEV sales in the Netherlands, EV adoption in Europe is a story of consistent and accelerating volume increases. Growth in 2018 has experienced set-backs since September, but, accounting back-log from insufficient supply, it still follows our expectation of a general adoption trend.  Unlikely a straight line, rather an S-curve. EV volumes have quadrupled within 4 years, but are still a 2,3 % niche in the vehicle market. And EVs still represent only 0,4 % of all 320 million cars and LCVs on European roads.

Consistent, double digit growth rates can change the picture fast, though. Continuing with last years increase of 33 % for the next 10 years, would lead to around 50 % EV share in sales and 10 % share in the European vehicle fleet.

What drives the growth towards mainstream adoption? To make a long story extremely short: (1) more choice of long-range, affordable EVs, (2) levelling of purchase/ownership cost to comparable ICEs, (3) reliable, convenient charging possibilities, (4) restrictions and bans for ICE sales/use, (5) binding mandates for CAFE and emission controls. Number 5 does not directly drive car buyers' choices, but without (5) there is less of (1,2,3).

Progress on these drivers is gradual and uneven. Few European car markets witness their combined force. Current actions and future plans still support a rapid increase in EV adoption throughout the coming decade.

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Enforced shift to BEV

The usual 50:50 split of BEV and PHEVs sales in Europe has come to an end. Enforced by revised taxation schemes and more stringent ICE emission testing (WLTP), demand (and supply) shifts towards BEVs, which easily take all these hurdles. In the 4th quarter, BEVs stood for 65 % of EV sales, in December their share was 69 %. The complete 2018 is lower, at 56 %, as it includes 8 months of the pre-WLTP sales pattern.

We have expected this for some time, as a natural development in the coming years; now it comes imposed, with the WLTP drama. Too early it may be. PHEVs are still needed during the transition towards electrified transport. Further delays during 2019 could certainly cause a dent in the overall sector development.

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