Image source: @VisualChina
The year 2022 just passed was an inflection point. This year, the global penetration rate of electric vehicles exceeded 10% for the first time.
In terms of driving the increase in the share of electric vehicles, the United States, Southeast Asia, and Central Africa, where penetration rates are still hovering in single digits, performed generally, with China contributing more than 60%, followed by Europe.
Mapping of the Energy Chain Research Institute
Negatively affected by a weak economy, soaring energy costs, supply chain disruptions, and the Russia-Ukraine conflict, total global new car sales fell by 1% to only 80.6 million units in 2022, with an 8% decline in the United States and a 7% decline in European sales. But car sales in China bucked the trend and rose 4 percent, partially offsetting declines in Europe and the United States.
There is a chill in the global auto market, and even the sales of car companies such as Volkswagen and BMW in Europe have declined, but this has not stopped electric vehicle sales from continuing to hit new highs in Europe and China.
01. European electric vehicle market: twists and turns, continue to maintain high prosperity
Judging from the quarterly performance of the past two years, the sales volume and penetration rate of the European electric vehicle market fluctuated greatly.
China's new energy vehicles have maintained a steady and high-speed growth trend. According to the latest data released by the China Association of Automobile Manufacturers, in 2021, China's new energy vehicle sales were 3.521 million units, a year-on-year increase of 160%; In 2022, this figure soared to 6.887 million units, a year-on-year increase of 93.4%. The penetration rate of new energy vehicles in China also increased from 13.4% in 2021 to 25.6% in 2022.
Compared with China's rapid progress, the European electric vehicle market started earlier, and the subsidy policy was more radical, once leading the world.
At the beginning of 2020, the overall penetration rate of electric vehicles in Europe was close to 10%, reaching around 25% at the end of 2020, and then all the way down. Growth began to resume in 2021 and rose to nearly 30% by the end of 2021. Entering 2022, due to supply chain shortages and geopolitical influences in the first three quarters, the passenger car market shrank, falling by 9.73% in the first 9 months, and the penetration rate also declined.
(11 European countries: Germany, France, United Kingdom, Italy, Sweden, Spain, Switzerland, Viticulture, Denmark, Finland, Poland)
This situation was broken last November.
In November last year, sales of electric vehicles in Germany soared, reaching an all-time high. In the same month, the number of electric vehicles registered in Germany reached 102,000, a year-on-year increase of 50%. December sales figures were stronger, with German EV sales at 174,100 units, up 114% year-on-year and 70% month-on-month.
Not just Germany, but all of Europe has achieved the best results in electric vehicle sales. Even the construction of charging piles that were "crotch-pulling" in the past has begun to accelerate under the stimulation of policies.
In December last year, seven European countries, including Germany, France, the United Kingdom, Norway, Spain, Italy, and Sweden, sold 343,500 electric vehicles in a single month, an increase of 50% month-on-month compared with November, and the monthly penetration rate exceeded 40%, significantly exceeding the 29.5% in November.
Changes in subsidy policies in major European countries
European electric vehicle sales showed a "tail" in November and December last year, related to the subsidy decline in Germany, Norway, Sweden and the United Kingdom began to take effect in 2023, and consumers rushed to buy before the subsidy policy expired. From January 1, 2023, the European subsidy for electric vehicles with a list price of up to €40,000 has been reduced to €4,500 from the previous €6,000.
However, the Huabao Securities report pointed out that the bottleneck line of 30% penetration rate, as well as the expiration of new energy vehicle subsidies and the increase of value-added tax in Germany and Norway from 2023, will restrict the growth of European electric vehicle sales to a certain extent. However, geopolitical conflicts, epidemics, supply chains and other negative factors are also being eliminated, and European electric vehicles are expected to continue to maintain high performance in 2023.
02. Development of electric vehicles in representative European countries
(1) Germany: Electric vehicle sales and penetration rate have reached new highs
Germany is the largest car market in Europe and the largest electric vehicle market, with well-known car companies such as Volkswagen and BMW. In 2022, electric vehicles accounted for 25% of new car production in Germany. In December last year, sales of electric vehicles surpassed those of conventional fuel vehicles.
Data from car companies show that in 2022, BMW Germany's new car sales will decline by 5%, but electric vehicles will increase by more than 1 times; German Volkswagen was similar, with total sales down 7% to 8.3 million units, but electric vehicles up 26% to 570,000.
Data shows that from January 2013 to October 2022, the cumulative number of newly registered electric vehicles in Germany reached 2.2 million, including 1 million plug-in hybrids and 1.2 million pure electric vehicles. Of course, this figure is still a long way from the German government's goal of putting 15 million electric cars on the road by 2030.
From January to November 2022, passenger car sales in Germany were 2.337 million units, of which 658,600 were electric vehicles, a year-on-year increase of 9.72%, and the penetration rate of electric vehicles was 28.18%, an increase of 4.5 pcts year-on-year. Especially in November, Germany sold 102,600 electric vehicles, an increase of 51.17% month-on-month, and the penetration rate reached 39.37%; Electric vehicle sales in December were 174,100 units, up 114% year-on-year and 70% month-on-month.
Whether it is sales and penetration, electric vehicles have reached a record high in Germany.
(2) UK: New car sales hit a 30-year low, but demand for electric vehicles soared
For the whole of 2022, 1.61 million new cars were registered in the UK, the lowest level since 1992, the data showed. New car sales are slightly lower than in 2021, which was affected by the epidemic, and are about 25% lower than in 2019.
But the seesaw phenomenon is prominent, and electric vehicle sales in the UK continued to grow last year, with 317,900 electric vehicles sold from January to November, and the penetration rate of electric vehicles was 21.4%, surpassing diesel vehicles for the first time. More interestingly, the penetration rate of electric vehicles in the UK reached about 30% in December, with monthly sales of 42,000 units.
However, with the elimination of factors such as chip shortages and the epidemic, the supply chain will be eased, and the backlog of orders will be delivered one after another. The Association of British Motor Manufacturers and Traders (SMMT) predicts that UK new car sales could increase by 15% year-on-year in 2023.
(3) Sweden: The penetration rate reached 53.48%, second only to Norway
Sweden is one of the top ten best-selling markets for electric vehicles in the world. According to a new Leaseplan study, Sweden is one of the most cost-effective countries in Europe to buy electric vehicles, which cost less than petrol and diesel cars and ranks third in Europe, behind Germany and Greece.
Since 2011, Sweden has subsidized new energy vehicles, from SEK 200 million to SEK 3.5 billion in 2022. As long as new energy vehicles meet the carbon emission requirements, they are exempt from the annual circulation tax for 5 years.
In 2021, the market penetration of electric vehicles in Sweden reached 45%. From January to November 2022, Sweden's overall passenger car sales were 252,600 units, of which 135,100 were electric vehicles, with a penetration rate of 53.48%, ranking second in Europe and the country with the brightest performance in the European electric vehicle market last year.
But on November 8 last year, Sweden announced the elimination of subsidies for electric vehicles, including pure electric vehicles and plug-in hybrid vehicles. The reason given by the government is that the cost of buying and driving such cars is now comparable to the cost of petrol or diesel cars.
Norway: The highest penetration rate of electric vehicles in the world, close to 90%
Despite its population of only 5.5 million, Norway has the highest penetration of electric vehicles in the world.
2021.10-2022.10 Source: Automotive Electronic Design
In 2022, Norway sold a total of 138,000 pure electric vehicles, with a penetration rate of 79.3%, significantly exceeding the 64.5% in 2021. If plug-in hybrid vehicles are superimposed, Norway's cumulative penetration rate in 2022 will reach 87.8%, basically achieving the electrification target.
But the Norwegian finance ministry said the subsidies cost the government about $4 billion in lost revenue in 2022. Now, the Norwegian government is trying to introduce a new weight-based car tax that limits concessions for high-end cars.
Compared with Germany, France and other important automobile towns, Norway has no local electric vehicle brand, no local brand obsession and preference, so it has become the first stop for Chinese car brands to go overseas, BYD, NIO, Xpeng Motors, etc. have entered successively. According to Marklines data, from January to August this year, BYD delivered a total of 1,332 vehicles in Norway, Hongqi 1,149 vehicles, NIO delivered a total of 646 vehicles, and Xpeng delivered 526 vehicles.
03. European charging pile construction: seriously lagging behind the electric vehicle market
As long as the sales of electric vehicles are high, the construction of supporting charging piles will not be delayed. This is inertial thinking.
But in Europe, this law is broken, and the pace of European charging pile construction is far lower than the sales growth of electric vehicles, which is quite a bit of "getting up early, catching up late".
Although China's new energy vehicle sales continue to set new records, the pile ratio has continued to decline in recent years, from 6.36:1 in 2015 and 3.13:1 in 2019 to about 2.5:1 in 2022. Even in terms of bus pile ratio, China has dropped from 9:1 to around 7:1.
The pace of charging pile construction basically matches the rapid growth of new energy vehicles, basically meeting the charging needs of vehicle owners.
But this is not the case in Europe.
In 2021, the number of electric vehicles in Europe reached 5.483 million, a year-on-year increase of 72.4%, but IEA data shows that the number of public charging piles in Europe is only 334,000, the ratio of public vehicle piles is 16.4:1, and DC fast charging piles account for only 9%. And as can be seen from the figure above, in the past five years, this number has not fallen but risen, from 6.9:1 to 16.4:1, and the gap in public charging has been expanding.
As European electric vehicle sales continue to hit new highs, the contradiction between the slow progress of charging pile construction becomes more prominent.
The clues can also be seen from the market growth rate.
According to IEA statistics, the number of electric vehicles in Europe increased from 103,000 units in 2013 to 5.483 million units in 2021, with a compound annual growth rate (compound annual growth rate) of 55.6%; However, during the same period, the number of public charging piles in Europe increased from 28,000 units to 334,000 units, with a CAGR of only 31.88%.
With the exception of 2016, the growth rate of charging pile construction in Europe is much slower than the growth rate of electric vehicles, and this obvious mismatch continues to this day, and there are even serious "barren" examples like the 38:1 ratio of public car piles in Ireland.
Moreover, from the comparison of charging pile ownership, the distribution of charging facilities in Europe is unbalanced, and the distribution gap between eastern and western Europe and urban and rural areas is huge.
Source: Mapping by the European Automobile Manufacturers Association Energy Chain Research Institute
According to ACEA data, half of the tram charging stations in the EU are only concentrated in the Netherlands (about 90,000 charging piles) and Germany (about 60,000 charging piles), Germany, France and the Netherlands together account for about 69% of the EU, Sweden, Italy ranked fourth and fifth. The Netherlands has a charging pile every 1.5 km.
But there are still 10 European countries where there is no charging pile per 100 kilometers on average.
Source: European Automobile Manufacturers Association Charging pile density
For example, Romania is about 6 times the size of the Netherlands, but the number of charging stations accounts for only 0.4% of Europe, and in Slovakia, 1/3 of the country's charging stations are concentrated in its capital Bratislava, which brings strong mileage anxiety to tram owners who need to travel long distances.
The side also shows that behind the expansion of the gap in the European charging pile market, there is huge room for growth.
Zhongtai Securities report predicts that from 2022 to 2025, the market demand for European charging piles will reach 150,000 units, 259,000 units, 444,000 units, and 687,000 units, and the market size of charging piles will be 1.6 billion US dollars, 2.85 billion US dollars, 4.57 billion US dollars, 7.18 billion US dollars, and the CAGR will reach 64%. This data is already higher than the CAGR figure of 43% in China's charging pile market. Moreover, the scale of DC fast charging piles in Europe has a higher growth rate, with a CAGR of 121% from 2022 to 2025.
At present, as far as the European electric vehicle and charging pile market is concerned, although the competitive advantage of Chinese brands is obvious, it is still in the pioneering stage.
Data from overseas research institute JATO Dynamics shows that between 2015 and 2022, the average price of electric vehicles in Europe rose from 48,900 euros to 55,800 euros, while in China it fell from 66,800 euros to 31,800 euros. Similarly, the domestic DC pile single W price is only 0.3 to 0.5 yuan, while Europe is 2 to 3 times that of China, with strong cost competitiveness.
According to data given by Inovev, a French automotive industry consultancy, in the first nine months of 2022, about 155,000 Chinese-made cars were sold in Europe, accounting for only 5.8% of the European electric vehicle market, which is not comparable to Tesla in the United States, European local brands Volkswagen and BMW.
The agency expects electric vehicles to account for 40% of new car sales in Europe by 2030, while Chinese brands will account for 12.5% to 20% of the European EV market, with sales between 725,000 and 1.16 million units.
Indeed, the European market is a piece of sweet potato, worth hundreds of billions of yuan, but Chinese companies still need to break the game when they go overseas.
Literature and | Energy Chain Research Institute, References:
[1] Huachuang Securities, "Electric vehicle sales in Europe are bright in November, when the year-end impulse is underway" December 2022
[2] Zhongtai Securities "Charging Pile Industry Research Report: Significant Overseas Market Space" December 7, 2022
[3] Huachuang Securities, "Analysis of the Decline of European New Energy Vehicle Subsidy Policy", November 13, 2022
[4] Wall Street News, "New Energy Vehicle Sales in Seven European Countries Hit New Highs in December," January 13, 2023