The Dutch electric car (BEV) market continued its recovery in April as it started to do in the first quarter, after the weak performance of 2021. Sales almost doubled to 4,717 BEV sales compared to the same month last year. Market share increased from 10% to 21.4%. While BEV sales performed brilliantly, sales of vehicles with an exhaust pipe were 19% lower.
The actual growth of the Dutch all-electric fleet is even greater. This year there is an incentive for private buyers of used electric cars, but there is hardly any supply in this market segment. Around 1,500 additional second-hand young BEVs were added to the fleet from abroad.
In Europe, and in particular in the European Union, used cars are easily transferred to the places where they are most in demand. Think of it as the auto market in the United States and the difference in demand in different states. All reports on market development in European countries are comparable to stories on BEV sales in California, Wisconsin and Florida (or any other state you are interested in).
The mention of the additional 1,500 BEVs on the road every month is important. For charging stations to become profitable, a minimum of passing vehicles must have a socket. The Dutch experience shows that around 3% to 4% of the fleet is electric to make DC charging profitable. But in different countries, your mileage may vary.
The April figures pushed BEV’s share of the fleet to just over 3%. Charging providers know this and are trying to open more charging stations. Charging in the global charging paradise will become even better.
Another interesting development in this automotive market is that for the fourth consecutive year, April sales (of the overall automotive market) are lower than the same month of the previous year. It’s tempting to attribute this to the Osborne Effect, but there are so many other market disruptions going on that pointing to a single cause is wrong. There are chip shortages, supply line disruptions, EU mandates, factory closures, inflation, recession fears and allocation priorities all negatively influencing the market in addition to the Osborne effect.
The Dutch market is known for its end-of-year delivery rush, caused by changes in the incentive system. This year and the next two years will have the same incentives. Thus, no end-of-year peak is expected, but rather a flat development like that of fossil-fuel vehicles. We expect small seasonal influences. Without the year-end spike, sales figures will suffer compared to the previous year, but this will likely be offset by much better sales in the first quarter of the following year.
This year, the BEV market got off to a slow start due to last year’s delivery peak being exceeded. In years to come, this will look more like the distribution of Fossil Fuel Vehicle (FFV) sales. This represents approximately 55% of sales in the first half, 45% in the second half.
Another market disruption that has nothing to do with the strength or weakness of demand for all-electric cars is the EU’s Company Average Fuel Consumption (CAFE) regulation, which determines the amount of CO2 that a company is authorized to emit. The measurement is an average across all cars sold in grams of CO2 per kilometer driven.
Most OEMs will be on the safe side of CAFE regulations. This year, we won’t see automakers registering large numbers of BEVs between Christmas and New Years. Each BEV registered before the end of the year can lower fines for non-compliance by around 18,000 euros.
When Tony Seba gave a lecture on market disruption nearly a decade ago, it was the very invention of the invisible hand. As happened with the replacement of the horse and the buggy by the car, the landline by the cellphone, the cellphone by the smartphone, the disappearance of Kodak, etc.
We now have incentives and taxation of new and old tech, supply disruptions from Covid-19 lockdowns, chip shortages from stupid OEMs canceling orders, factories shut down from a war and sanctions, and forced sales through CAFE regulations.
The “normal” delivery time for a new car in Europe is now between 6 and 18 months. How OEMs allocate the rare parts they get is a mystery, probably to themselves as well. The impression they give to the outside world is a priority for BEVs, but at the same time BEVs are known to have the longest waiting times. Hmm…. Both cannot be true. It’s also possible that the highest-margin vehicles will be made first, and some of them are all-electric.
Hidden by all these exceptional events, we still have the invisible hand doing its job. We believe we are seeing growth in BEV sales that cannot be explained by all the market intervention and disruption alone. The decline of FFVs over the last half-decade is also more consistent and greater than the influence of external forces alone can explain.
We are now over two thirds of May. We see the same pattern. More BEV sales (+30%) and less FFV sales (-30%) than a year ago. Dutch car associations – representing wholesale, retail and service companies – expect a rebound in the Dutch car market. According to them, this means thatreal car market” — vehicles with an exhaust pipe. It’s time they wake up and start reporting on the old declining market and the new growing market. Instead, they try to hide what’s going on by not releasing more details about the different powertrains used in the market. Fortunately, they are not the only source of this detailed data. (Special thanks to EU-EVS and iserv.nl.)
A rise to approximately 30% market share for BEVs at the end of the year is possible. We could enter the near-vertical part of the S-curve of the transition in 2023 and 2024, then flatten out towards its peak in 2025 or 2026.
Looking at the rest of Europe, we see Scandinavia following Norway’s lead. They will reach their peak even earlier than the Netherlands.
The major markets of Western Europe (Germany, France and the United Kingdom) follow closely. Spain and southern Europe’s Italy are just beginning their ascent, but the more mature global BEV market now has the kinds of cars they need. Infrastructure is a barrier, especially in Spain, which is geographically large and sparsely populated.
With the implosion of the thermal car market in Scandinavia, followed a year or two later by the Dutch and German markets, we are entering Terra Incognita. We can see a domino effect in other markets, or traditional OEMs staunchly defending their market in a losing battle. In Europe, the transition will be completed before the end of the decade.
Regardless of vehicle manufacturers’ regulations, policies, or transition plans, word of mouth about the benefits of electric driving, combined with local driving restrictions on any tailpipe-equipped vehicle, will prevail. .
We regularly provide statistics on model sales and the like – the figures from José Pontes should tell you all about these details.
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