Europe surpassed China in 2020 to become the world’s largest market for electric vehicles, amid a push for a metal pedal to increase the adoption of electric vehicles by governments and supercharged consumer demand.
New electric vehicle registrations topped 1.33 million in major European markets last year, compared to 1.25 million in China, according to a report based on public data from the automotive analyst Matthias Schmidt.
The 18 markets include the states of the European Union (minus 13 countries in Central and Eastern Europe), as well as the United Kingdom, Norway, Iceland and Switzerland.
And growth will only continue, according to Schmidt, which publishes the European Electric Car Report. It expects the share of electric vehicles in the European car market to increase from 12.4% in 2020 to 15.5% in 2021, ie 1.91 million vehicles out of a total of 12.3 million and a increase of 572,000 from 2020.
Key trends have emerged as European racing becomes the most important region for electric vehicles, highlighted in the report Schmidt shared with MarketWatch.
Among them, the Renault Zoe is now the most popular electric vehicle in Europe, surpassing Tesla’s Model 3, which took first place in 2019. In fact, Tesla’s success in Europe has declined widely over the years. last year, with the United States. company that supplies 97,791 cars across the continent in 2020, compared to 109,467 in 2019.
Here’s what you need to know:
SUVs are leading the growth
When you think of eco-friendly vehicles, sports cars and crossovers probably won’t come to mind. But this class is by far the most popular type of battery-powered electric vehicle in Europe, accounting for 27% of all registrations in 2020 and 29% in December alone.
Hyundai 005380,
and Kia 000270,
led the package, which accounted for 39% of battery-powered electric SUV and crossover volumes by 2020.
SUVs and crossovers are even more popular among hybrid buyers: they accounted for 53% of plug-in hybrid electric vehicle volumes last year.
Luxury buyers prefer hybrids
When it comes to hybrids, the better the better. Premium brands accounted for 58% of all plug-in hybrid electric vehicles in 2020.
Many of these cars were supplied by the German car giants: Volkswagen Group VOW,
owner of Audi and Porsche, Daimler DAI, owner of Mercedes-Benz,
and BMW BMW,
There is a wave coming from China
As Chinese carmakers step up efforts to meet domestic and international market demand, they are looking to Europe.
The volume of electric vehicles in Europe manufactured by Chinese companies grew by 1290% between 2019 and 2020, to 23,800 units. Much of that momentum came recently: half of those cars arrived in the last three months of the year.
While Europeans were fighting to buy electric vehicles, the flow of cars from China also included Teslas. In December, 20% of the total Tesla TSLA,
models registered in Austria were manufactured in China.
Also read: Audi is committed to the luxury market in a new electric vehicle company with China’s oldest carmaker
Government action is speeding up the adoption of electric vehicles
European carmakers are being pushed to manufacture more electric vehicles by the threat of hundreds of millions of euros in European Union fines for binding emissions targets.
Exhausted by 2020 and by 2021, the average emissions target for the entire fleet for new vehicles should be 95 grams of carbon dioxide per kilometer, which is about 4.1 liters of gasoline per every 100 miles.
Following the post-Brexit trade deal, the UK government said the country’s carmakers are facing “at least as ambitious” emissions targets as in the EU.
The adoption of electric vehicles is being pushed on both sides of the market, and governments are stimulating demand by providing generous incentives for buyers to trade with their gas consumers.
In Germany, buyers can save up to € 9,000 ($ 10,940) on the purchase of new electric vehicles. France offered incentives of up to 7,000 euros in 2020, but will reduce it to 6,000 euros in 2021.
Regulation could affect some short-term bottom lines
The Volkswagen Group confirmed last week that it had not met EU emissions targets for 2020, meaning the company is fined more than € 100 million.
Others could face the same fate, although rivals Daimler, BMW, Renault RNO,
and Peugeot (now part of Stellantis STLA,
) say they met their goals.
“Despite very ambitious efforts in electrification, it has not been possible to fully meet the set goal. But clearly, Volkswagen is on track,” said Rebecca Harms, a member of Volkswagen’s Independent Sustainability Council.
“The key to success will be to give a smaller role to smaller, more efficient and affordable models in the launch of electrification.”
It is unclear how easy it will be in 2021. The COVID-19 pandemic has contributed to the lowest number of vehicles registered in Europe since 1985, and according to Schmidt, this has allowed several carmakers to meet their emissions targets. .
Also read: Car manufacturers put the metal pedal on electric vehicles in 2020, with sales in a key region where Tesla lost market share
Tesla loses control
Tesla comfortably topped European electric vehicle lists in 2019. It delivered more than 109,000 vehicles that year, representing 31% of the region’s battery-powered electric vehicle market.
But the tide turned in 2020, with Tesla falling behind the brands of the Volkswagen Group, which had a 24% market share, and the Renault-Nissan-Mitsubishi Alliance, with a 19% market share. Last year, Tesla delivered nearly 98,000 vehicles and accounted for only 13% of the European market.
According to Schmidt, it was the introduction of emission targets and the spectrum of massive fines that accelerated the battle of European carmakers against Tesla for dominance.
See also: Electric car sales reach 54% market share in Norway in 2020, but Tesla loses first place
“With 2021 even tougher, thanks to the year ending progressively, Tesla will have even more intense competition,” Schmidt said. “Arrive in 2025 when goals rise again, Tesla is sure to play against opponents in full form and potentially fight.”
However, Schmidt notes in his market outlook for 2021 that it is likely that the opening of the Tesla plant in Germany, which is expected to begin production in the second half, will double regional volumes. next year.