EV Index reveals north-south divide in Europe

The EV Index recorded continuing progress during the last quarter of 2022 with our assessment of EV market readiness showing an improvement in each of the Big 5 markets.

The UK took a narrow lead over Germany, with gains across each of the contributing pillars that we measure. The most sizable increase for the UK was in the level of consumer interest in electric cars, but there were also significant improvements in the affordability and choice of vehicles available in the market, as well as additions to charging infrastructure registered during the quarter.

Whilst consumer interest in Germany remained strong, pricing differentials between electric and combustion models worsened slightly, whilst infrastructure additions failed to keep pace with increases in EV numbers. The latter however is more an indication of recent success, caused by a bulge in EV registrations in Germany of 66% in the final quarter as buyers sought to beat the reduction in government subsidies that were timetabled for the end of the year.

(Norway remains the outlier amongst the EV Index group with government policy and fiscal intervention having tipped the scales in favour of EV acquisition a long time ago. Even so, Q4 saw sizable gains in charger availability and a marked improvement in EV pricing relative to ICE alternatives.)

But the most worrying long-term trend remains the very different pace of adoption between Northern and Southern Europe. Sales of battery electric vehicles in Europe as a whole grew 29% in 2022, an encouraging development. But these sales remain concentrated in the wealthier markets, with Germany alone accounting for one third of that gain.

In Italy, sales of EVs declined 27% in the course of the year. In Spain, although sales increased, it was from a low base, and at year end BEVs still had less than 4% market share.

Both markets, significant in their overall size, remain far behind Northern and Scandinavian markets on every measure, but with inadequate infrastructure making the biggest contribution to their low score.

Again, there is a clear concentration of accessible infrastructure in Northern markets. In June it was reported that more than half of all public charge points in the European Union were concentrated in just two markets: Germany and The Netherlands, which between them account for less than 10% of the EU’s land area.

Whilst disparities in vehicle pricing between EVs and ICE vehicles remain similar in all markets, Italy’s lack of progress over the year was likely further exacerbated by reductions in EV purchase incentives from their previous levels. So, for example, whilst an EV buyer in Germany could, up until the end of last year, enjoy a €9,000 government bonus, in Italy the incentive was €3,000.

The entry of Chinese brands offering competitively priced EV models also looks likely to take longer in Southern Europe, with brands such as BYD and Nio targeting Scandinavia, Germany, the Netherlands and the UK as their priority. This makes it likely that divergence in pricing will continue for some time in both Italy and Spain.

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 and Norway.

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