For the first time, EVs are overtaking combustion engine vehicles
Electric vehicles are sparking the interest of an increasingly wide group of buyers. Sales are increasing rapidly throughout the world. However, European manufacturers are currently not reaping many of the benefits.
Last year, new registrations of battery electric vehicles (BEV) doubled to 4.5 million. But not everyone is profiting from the boom. A study conducted by PwC showed that more than eighty percent of the best-selling electric cars in China and the US were made by an Asian or American company. Because of the chip shortage, German manufacturers saw sales drop from 17 to 14 percent in the fourth quarter of 2021 compared to the previous year.
German market without German electric cars?
In Germany, this trend was also reflected in the sales figures for February. Accordingly, Tesla increased its sales by a factor of fourteen. From 419 to 5,944 new registrations in one month—and increase of 1,319 percent. And this with just two models: Tesla Model 3 and, in second place, the Model Y. VW, BMW, etc. were nowhere to be seen among the top five. In February, Tesla, Fiat, Hyundai, and Renault sold the most electric vehicles. On the whole, with 20,892 new registrations (+28.1 percent compared to February last year), electric vehicles have a market share of 11.3 percent in Germany.
Despite the fact that an increasing number of car makers see the future as “purely electric”. For example, last year, the number of new BEV registrations in the top-five markets of the EU increased by 72.4 percent compared to 2020; in Germany, this increase was even 83.3 percent and, in the US, sales rose by 62 percent. China remains at the top, with an increase of 172.3 percent.
EVs are overtaking combustion engine vehicles
However, preferences for the different electric drive systems differ considerably from region to region. For instance, in Germany full hybrids still had the highest market share throughout 2021 (16.4 percent). However, sales of BEVs more than doubled compared to the previous year and have now risen to second place (13.6 percent). Sales of plug-in hybrids have increased by 12.4 percent. In other words, 42.4 percent of new registrations were electric vehicles and 57.6 percent combustion engine vehicles. Sales of each are expected to be equal by the middle of the year and, by the end of 2022, sales of electric cars are likely to outstrip sales of combustion engine vehicles.
PwC also does not expect to see a drop in BEV sales, even if government subsidies are reduced or removed altogether. Analysts believe that the market is increasingly growing under its own power, driven by the rising number of models and manufacturers, combined with technological developments, which promise further cost reductions and performance increases by 2025.
Electromobility is becoming more attractive
Nevertheless, according to the Deloitte Global Automotive Consumer Study 2022, government subsidies still encourage 46 percent of the study participants to buy an electric car. But 61 percent also said that the climate was one of the reasons for purchasing an electric vehicle. However, the majority would not want to give up driving. A good two thirds of those taking part in the study plan to use their own car to cover their mobility needs.
44 percent of Germans would be prepared to pay more for alternative drive systems—31 percent between EUR 400 and 2,000, 13 percent would even be willing to pay more than EUR 2,000. About 40 percent of those interviewed would choose a hybrid vehicle (2021: 26 percent), while 15 percent now prefer a fully electric car (2021: 6 percent). However: for 41 percent, the price at the charging station should not be higher than at a gas station.
Range also remains a serious consideration. For the consumers who took part in the study, 616 kilometers is the critical distance. Asked about their main concern with regard to e-mobility, a quarter of motorists said range, followed by the charging infrastructure (14 percent), and the higher purchase price (12 percent).
In other words, range, charging infrastructure and lower prices are the indispensable requirements to make electric cars suitable for the mass. If these do not exist, electric cars will remain unpopular for many people despite the current increases in sales figures. Considering the EU’s aim of not selling any more vehicles that use fossil fuels from 2035, it is important that companies and governments create the necessary general conditions.