The EV Index showed improvement in all of the six markets that we cover during the third quarter of 2021 with the biggest growth recorded in Italy and France. The main driver for these changes was the uptick in consumer interest in all markets, with Germany and the UK exhibiting the largest increase in this measure.
Whilst across the ‘Big 5’ it is becoming clear that more consumers are including electric models in their consideration list for new car purchase there is still considerable hesitancy. During the quarter an impressive 23% of online visits to vehicle model pages on car brand sites were to EV models. However, in most cases it seems that this level of interest has yet to translate into purchase intent or outcomes. During the quarter the percentage of electric cars registered in Europe was still fractionally below 10%, rising to 11% in Germany, UK, France, Italy and Spain. (Norway, of course, remains the European exception: in September 90% of all cars purchased were battery electric models.)
In Germany, France and the UK, affordability and choice remain significant barriers to widespread EV adoption, even though, as was widely reported, Tesla Model 3 was the biggest selling model in Europe during September. Celebration of the brand’s advance needs to be tempered by a clear-eyed understanding of the current distortions in the car market due to the supply chain problems that Renault, Volkswagen, Ford and many of the other volume manufacturers are experiencing.
Only in Norway are we seeing price parity between the two drivetrains, and this it should be noted, is largely due to the country’s vehicle taxation regime rather than the retail pricing set by importers. Norway represents a clear case of ‘stick’ rather than ‘carrot’ achieving EV adoption, and even the strongest advocates of electrification are skeptical as to whether a similar strategy would work outside of the Scandinavian markets.
Poor infrastructure continues to be a more pronounced obstacle to EV acquisition in Italy and Spain with both markets clearly lagging in the race to install sufficient charging points. In sizable areas of both countries EV users are very poorly served making ownership impractical if not downright unviable. But the vehicle manufacturers are themselves starting to address this problem, realising that a core appeal of the Tesla ‘proposition’ is priority access to the brand’s extensive and reliable charging network that ownership confers. Stellantis is the latest brand to commit to a massive investment in this area having announced a partnership with e-mobility startup TheF Charging network to provide stations at 15,000 locations across Europe. At the moment, infrastructure provision in France, Germany and the UK is just about adequate for the size of the present EV fleet, although it is generally agreed that even modest expansion will quickly place those networks under critical stress.
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