The Sophus3 EV Index for the last quarter of the year showed modest improvement over the previous period in all of the ‘Big 5’ European markets with the exception of Italy, whose score remained static.
Consumer interest continued to grow and our most recent analysis of traffic to car brand website model pages shows that more than one fifth of site visitors are now considering an electric option as they review the new cars on offer.
Affordability, as a barrier to acquiring an EV, appeared to worsen in Q4 with the relative price of electric models increasing against their fossil-fuelled equivalents. However, there were some distortions at play here. The appearance of Tesla’s Model Y — a premium SUV with only high-priced derivatives available at launch — skewed the pricing of the basket of electric cars that we price track. Conversely, strong sales for budget models from Dacia — the Sandero and Duster — drove down the pricing of the basket of ICE vehicles that we compare EV prices against. However, we expect a more positive trend in EV pricing to establish itself over the coming year as ‘budget’ EVs, such as Dacia’s Spring and Fiat’s 500 electric, establish themselves in more markets.
The provision of public charging infrastructure, so vital to EV uptake, improved in all of the markets, with France and the UK adding the most charging points during the quarter.
With the steady growth of consumer interest in EVs translating into a rapid expansion in sales, it may feel like we are reaching a tipping point along the road to EV adoption. In 2021, European sales of pure battery vehicles increased by a spectacular 63% in a car market that had otherwise gone into reverse (down -1.5% over the year). In December, sales of electric cars in Europe overtook diesel models for the first time. By the end of the year, Tesla’s Model 3 had jumped above Mercedes C-Class, BMW 3 Series and Audi A4 to become the most sought after mid-sized executive car.
However, the EV Index provides a salutary, objective reminder that we are still a long way off from the point where a consumer is placed at no disadvantage when choosing an EV over an ICE vehicle. Indeed, with an average EV Index score for the five markets we concentrate on below 30 — with 100 representing parity — we are, crudely, not even a third of the way ‘there’.
Looking at individual markets this is most obviously true for Spain and Italy which languish a long way behind, with poor infrastructure provision limiting both interest and uptake of electric cars.
Although the UK scores highest, it is only fractionally ahead of Germany which is hampered by the relatively lower density of its charging infrastructure, a result of its geographical size. In terms of sales, Germany is very much turning into the EV ‘powerhouse’, accounting for 22% of all BEVs registered in Europe last year. With home manufacturers committed to the transition to electric, and a generous government incentive of upto €9,000 towards purchase of an EV, we fully expect Germany to top the Index in the Big 5 during the coming year.
As ever, we include Norway as a benchmark within our analysis, which despite a car market which is small in size, is hugely significant due to the large share of EVs. A combination of heavy taxes on ICE cars and a dense charging infrastructure means that EVs are now the car of choice for Norwegian buyers, which is shown by an Index score of 123, comfortably beyond the point of parity.
France is the country that remains the most puzzling. It is the market in which affordable and practical electric cars have been available the longest — Renault launched its Zoe model there ten years ago. France also has by far the best public charging infrastructure amongst the ‘Big 5’, yet levels of consumer interest, and uptake, remain poor. Again, geography and the country’s relatively low density of population might be factors here. In addition, the car market is at the moment very heavily consolidated around a small number of popular, and relatively inexpensive ICE vehicles from Stellantis and Renault Group, making it particularly challenging for EV models to break into the mainstream.
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