EV Index 2023 Q2: growth returns

Overview

The EV Index for the second quarter of 2023 is encouraging given that we saw the Index move in a negative direction in five of the seven markets that we track during Q1.

Of the core markets we analyse, France shows the biggest recent gain overall, rising six points to rank first among the Big 5. The index in the French market benefited from improvements in the relative pricing and availability of EVs as well as a sizeable expansion in public charging infrastructure.

EV Index 2023 Q2

Figures in brackets show change from Q1

‘Affordability and choice’ ratings improved in every market and this was a big driver of the overall improvements. However, the shift in pricing was only due partly to the appearance of cheaper models in the basket of EVs that we track, with MG4 joining Dacia Spring to lower the average price used in our calculations. (Both cars are of Chinese origin, with the Spring a rebadged version of the DongFeng Nano Box.) The small improvement in the relative pricing of EVs and ICE was equally the result of a strengthening of ICE pricing so there was little actual gain for consumers.

The reality persists that the difference in price between top selling EVs and fossil-fuelled cars remains a chasm in every market but Norway. The gap is at present most pronounced in the UK, where the average price of the ICE basket comes out at just 54% of the average price of the electric vehicle basket. This means a consumer will effectively need to spend nearly double if they wish to upgrade to an EV when purchasing their next new car.

That said, the choice of electric cars available to buyers is improving rapidly with 120 different EV models available in the main European markets compared with 20 just five years ago. As more Chinese brands arrive—Chery, Zeekr and HiPhi have all recently announced their timetable for entry into the European car market— then the number of models available will increase significantly and heighten the pressure on all brands to lower their prices. At the moment however, the volume of sales of Chinese brands remains low with barely 5,000 combined sales in Europe by the newest entrants—BYD, Nio, Great Wall, and Xpeng—in the year so far.

Whilst consumer Interest in EVs is improving, this trend is more gradual. Visits to the model information pages on car brand sites show that in the Big 5 around a third of visits are to EV models (slightly less in the ‘laggard’ markets of Italy and Spain). However, this share of visits has remained pretty constant over the last two years suggesting that the challenge for EV sellers is to move beyond the early adopter audience and attract and, more importantly convert, a larger number of mainstream buyers. As ever, Norway is the outlier in our analysis: here consumer sentiment has moved strongly in favour of electric with two thirds of model page visits made to EVs.

The final component we use to calculate the EV Index, the provision of public charging facilities, gave a very mixed picture during the second quarter. France saw the biggest uptick and in May reached the government’s initial target of 100,000 charge stations. After a slow start (this target was originally intended to be met by the end of 2021) the country is now adding 4,000 chargers a month to its public network with the intention of expanding it to 400,000 stations by 2030.

In June, the German government announced a subsidy budget of €0.9 billion to support public and private charge point installations. Germany’s target is an ambitious 1 million public stations by 2030. Yet again both Italy and Spain logged no measurable infrastructure improvements during the quarter, further cementing the view of two speed progress towards European electric vehicle adoption.

In a move with future significance, the European Parliament in July mandated the provision of charge stations at 60 km intervals on Europe’s main arterial routes along with simplified payment methods and the creation of a Europe-wide database to show consumers real time charge station availability and pricing.

The EV Index from Sophus3 provides an objective measure of the readiness of the vehicle market to enable and encourage the mainstream adoption of electric vehicles (EVs).

The index is formed from three pillars, each measuring distinct factors that help or hinder electric vehicle acquisition. First of these is the consumer appetite to buy electric, the second is the capability of the automotive companies to supply these cars, and the third is the availability of suitable charging infrastructure.

A score of 100 represents parity in the attractiveness, availability, pricing and usability of an electric car compared with a conventionally fuelled vehicle.

We publish the EV Index for the UK, Germany, France, Italy, Spain, The Netherlands, and Norway.

A fuller explanation of the EV Index from Sophus3, and links to previous issues, can be found here.