Electric Car Sales In Europe Moribund, Awaiting Lift-off.
“electric car market demand remains excruciatingly slow, suggesting that Europe’s inevitable shift towards an era of electric vehicle propulsion will be a great deal slower than predicted”
As excited forecasters scramble to outbid each other’s rosy forecasts for Europe’s electric car sales, the atmosphere on dealer lots remains sedate.
Car buyers need a bigger charging infrastructure, and compelling new products. Long-term, traditional carmakers are likely to outpace upstarts like Tesla Inc.
According to European newsletter Automotive Industry Data (AID), Western Europe’s battery electric car sales rose to a barely measurable 7,591 in April – that’s a 0.68% market share compared with 0.60% in April 2016.
“(demand in) the electric car market remains excruciatingly slow, suggesting that Europe’s inevitable shift towards an era of electric vehicle propulsion will be a great deal slower than some industry optimists had earlier predicted,” said AID editor Peter Schmidt.
In the first 4 months of 2017, battery car market share was 0.81% compared with 0.65% in the same period last year. That adds up to 40,607 versus 31,399, said AID, adding its data is exclusive.
BMI Research says electric demand won’t spurt until the growth of key battery elements is established, along with the deployment of charging stations. BMI also reckons traditional manufacturers will corner the electric car market, at the expense of pretenders like Tesla Inc.
Biggest hurdle price
Range anxiety remains a barrier, despite claims by manufacturers that this is being addressed, but the biggest hurdle remains price.
Western Europe includes all the big markets like Germany, France, Britain, Italy, Spain and Norway. Norway is a minnow in terms of regular car sales, but this oil-rich socialist state has a huge incentive program to persuade its citizens to buy electric cars. In April Norway accounted for 1,991 electric car sales, that’s almost 3 times more than Germany. In Norway, electric cars account for nearly 15% of the market. In Germany the figure for April was 0.53%, according to AID.
Investment bank UBS doubled its forecasts for global electric car sales last month to 14% by 2025 or 14.2 million vehicles compared with its previous projection. It raised the forecast for 2021 to 3.1 million from 2.5 million. Europe will lead the way with 30% of its sales electric by 2025, according to UBS. Its forecast for U.S. electric car sales was increased to a market share of 5% in 2025 from 3%. Mainstream forecasts for electric car sales range from between 10 and 15% of the global market by 2025. Volkswagen expects this to hit 25%.
The German government has a target of 1 million electric cars on its roads by 2020, but that looks likely to fail miserably with only 80,000 cars in total last year. German Chancellor Angela Merkel, in the middle of an election campaign, makes the hopeful claim that demand for these cars may come “very abruptly”.
According to investment researcher Evercore ISI, Germany is in danger of losing out to China in the future market for electric cars because there is a dire lack of compelling electric products, apart from Tesla, and a lack of charging infrastructure.
“Given its ambitious targets, the importance of the auto industry and is innovation heritage, we are surprised that Germany still isn’t more determined to tackle EVs as an exciting opportunity rather than necessity to meet CO2 targets. We find it scary to see how little government policy Germany is providing to shape the future of its auto industry at times of major technological change, Evercore ISI analyst Arndt Ellinghorst said.
Germany offers a 4,000-euro ($4,486) battery electric subsidy. France and Britain have similar inducements.
BMI Research agrees crucial factors need to be addressed.
“EV’s disruptive potential will be fully unlocked only if a number of developments take place across other industries – such as growth in the supply of key minerals and the deployment of charging stations,” BMI said in a report.
Lithium-ion will continue to be the dominant component of batteries and long-term supply seems assured. Cobalt is another mineral in demand.
BMI has some worrying thoughts for Tesla investors. Addressing the question of who will win in the electric car stakes, new entrants or established players, BMI opts for the latter.
Establish players win
“While it’s tempting to see the hype and output expansion of Tesla as a sign of a new dawn in the Autos industry, we believe that established manufacturers still represent the most likely players to dominate the EV market,” BMI said.
“What should become apparent is that established carmakers still appear to have the upper hand thanks to their scale, global exposure, pre-existing profitability and bargaining power. Nevertheless, start-ups still pose a threat given their ability to be more nimble, innovative and establish partnerships with non-automotive industry players, particularly tech companies,” BMI said.
Meanwhile the biggest selling models in Western Europe like the Renault Zoe and Nissan Leaf have recently had their ranges upgraded, while the BMW i3 has a range-extender gasoline engine to thwart range anxiety.