Demand for electric vehicles in EU surges threefold
LONDON, July 28, 2021
With a focus on environmentally friendly products, the European automobile industry is witnessing heightened activity with consumers increasingly turning to electric vehicles and initiatives from governments are also inspiring the demand.
According to data acquired by Finbold, the demand for new passenger battery electric (all-electric) vehicles across Europe surged 231.58 percent between Q2 2020 and Q2 2021, from 63,422 to 210,298. The figures reflect a triple growth in demand for all-electric vehicles.
Elsewhere, demand for the hybrid electric vehicles also spiked by 213.54% to 541,162 representing the biggest growth for all new passenger vehicles in Europe. In total, the electric vehicle registration as of Q2 2021 stands at 751,460, a growth of at least three times from the Q2 2020 cumulative figure of 236,015.
During the period, plug-in hybrid vehicle demand surged 255.8%, from 66,252 to 235,730. Natural gas vehicles recorded demand of 41.84% from 9,515 to 13,497.
The data on new passenger car registration in the EU is provided by the European Automobile Manufacturers’ Association (ACEA).
Furthermore, during the first half of 2021, battery electric vehicles recorded a share of 6.7% under new passenger cars by fuel type in the region. Hybrid electric vehicles had a share of 18.9%, while plug-in hybrids stood at 8.3%. Petrol accounted for the highest share at 42%, followed by diesel at 21.7%. Natural gas had a share of 0.5%.
The report explains how different government policies contributed to the surge in demand for electric vehicles in Europe.
According to the research report: “For instance, when the coronavirus pandemic hit, most governments across the region focused their stimulus packages on companies that are operating in line with fighting climate change. Notably, a big part of the support focused on incentives for consumers to buy EVs, creating a surge in demand.”
The increase in demand for electric vehicles across Europe is motivated by the European Commission’s goal to achieve a climate-neutral economy by 2050. There are stringent restrictions on automotive emissions driving the expansion of the market.
Accordingly, car manufacturers are making commitments to climate change while at the same time accelerating their investments in electrification and meeting policy requirements.
Notably, across Europe, traditional manufacturers like BMW, Audi, and Volvo are also venturing into the electric vehicle scene. At the same, the emergence of new players is offering consumers a wide range of products leading to the growth in demand for electric vehicles in the region.
With the commitment towards climate-friendly initiatives, most governments across the region have utilised the opportunity by establishing friendly incentives targeting both consumers and manufacturers.
Although the demand for electric vehicles surged, it emerged during a global chip shortage that also impacted the industry. The shortage was mainly a result of supply chain constraints that emerged during the pandemic. However, the severity of the shortage will play out later this year.
A point to note is that electric vehicles are considerably expensive and not affordable to the masses in the absence of subsidies. Therefore, the numbers will keep soaring if the industry records increased competition and the scaling up of production. This explains why demand for petrol passenger cars remained high in 2021.
Although the EU electric vehicle momentum heavily relied on government support, the move spells doom for prospects in the industry. Over the past 12 months, the gains made could easily be reversed when most government subsidies are limited or expire.
Furthermore, the European market is not immune to other challenges facing the industry. The sector is still faced with high manufacturing costs. To tackle these challenges, manufacturers rely on technological advancements and proactive government initiatives to supplement growth.-TradeArabia News Service
