Article Type: News

Renault Zoe scores zero stars in latest Euro NCAP testing

The Renault Zoe has become the third car in history to be awarded a zero-star rating by Euro NCAP, following the latest round of safety testing by the organisation.

Renault Group’s Dacia Spring also scored poorly, achieving just one star out of a possible five. Testing saw other carmakers achieve the industry-leading five-star standard for their latest models.

Autovista24 forecasts that the Spanish new-car market will grow by 9% in 2022, to about 930,000 units.

The Renault Zoe was one of the first mainstream mass-produced battery-electric vehicles (BEVs) launched, having gone on sale in 2013. The carmaker offered an upgraded model in 2017. However, some safety elements were removed and this, coupled with increasing standards for Euro NCAP testing in the intervening years, saw the model achieve the unwanted stain on its reputation.

Zero-star

Only Fiat has ever achieved a zero-star rating for a vehicle, doing so twice with the Punto and Panda in 2017 and 2018, respectively. These models had not been updated in several years as the carmaker failed to invest in them, leading Euro NCAP to retest and ascertain just how safe they were compared to modern standards.

The Renault Zoe saw a facelift launched four years ago. However, according to Euro NCAP, at this time, certain safety equipment was downgraded. Specifically, seat-mounted head and thorax side-protection airbags were removed, and thorax-only units were added.

In the frontal offset crash, the results were rated as ‘poor’, specifically due to weak protection for the chest area of the driver-side dummy. But it was Euro NCAP’s severe side-pole test that revealed the most drastic results, with the driver’s head directly impacting the intruding pole.

Thatcham Research, which undertakes testing for Euro NCAP, highlighted that the red body parts seen on the dummy in the image below show a potential threat of serious injury and threat to life in the event of an accident.

Source: Thatcham Research

The test replicates real-world impacts involving a vehicle travelling sideways into rigid roadside objects such as trees or poles. According to Thatcham Research, 33% of these impact types are classified as fatal or serious accidents. As the forces on the car are so localised, the pole can end up deep inside the passenger compartment.

‘It is a serious concern to see results like this in 2021, especially from a carmaker which has previously performed well in Euro NCAP testing,’ said Matthew Avery, Thatcham Research’s chief research strategy officer and Euro NCAP board member. ‘Renault was the first to achieve the full five-star rating in 2001, in part because it was also the first to include a combined head and thorax airbag in the Laguna 2. Although this was a new and revolutionary safety measure at the time, today this airbag is available on most modern cars.

‘Unfortunately, a conscious decision has been made to remove the head protection from this vital passive-safety feature, by the brand that pioneered the use of it. As a result, the safety of occupants within the vehicle has been severely impacted.’

Safety systems

The Renault Zoe also lacks active-safety technology commonly fitted as standard in most new vehicles, such as lane-departure warnings and standard-fit autonomous emergency braking (AEB). This led to a 14% score in the Safety Assist category, 61% lower than the average (75%) achieved by carmakers in the same category this year.

The Dacia Spring fared slightly better with a one-star rating. In its review, Euro NCAP stated: ‘The Spring’s performance in crash tests is downright problematic, with a high risk of life-threatening injuries for the driver’s chest and rear passenger’s head in frontal crash tests and marginal chest protection in a side impact. The mediocre crash performance and poor crash-avoidance technology result in a one-star rating.’

Unlike the Fiat Punto and Panda, the Zoe is unlikely to be pulled from sale due to the zero-star rating. Indeed, Fiat stopped sales of the Punto prior to the results being made public. The Zoe is an important car for Renault, as its leading BEV model and one which is synonymous with electric technology and pioneering spirit at the carmaker.

The Spring, meanwhile, is poised to lead a low-cost BEV attack on the automotive market for Renault Group. It is heavily based on the Chinese-made Renault City K-ZE, itself a derivative of the Renault Kwid, sold in India and Brazil for several years.

‘Renault was once synonymous with safety. The Laguna was the first car to get five stars, back in 2001,’ commented Michiel van Ratingen, president of Euro NCAP. ‘But these disappointing results for the ZOE and the Dacia Spring show that safety has now become collateral damage in the group’s transition to electric cars. Not only do these cars fail to offer any appreciable active safety as standard, but their occupant protection is also worse than any vehicle we have seen in many years. It is cynical to offer the consumer an affordable green car if it comes at the price of higher injury risk in the event of an accident.’

Renault response

In response to an Autovista24 request, Renault stated: ‘We take note of the results published by Euro NCAP following specific tests on Zoe E-Tech Electric according to its new protocol implemented in 2020.

‘First of all, Renault reaffirms that Zoe E-Tech Electric is a safe vehicle, which complies with all regulatory safety standards. These standards are constantly evolving and are becoming more stringent in all domains, especially in safety. Renault therefore continually improves its offer in order to comply with the regulations applicable where its vehicles are sold. Zoe was launched in 2013 and received five stars with the Euro NCAP protocol at that time. The Euro NCAP protocol has, since 2013, undergone five changes. With the same equipment, a model can lose up to two stars in each protocol change.

‘The evolution of the current Zoe was decided in 2017, adapting the passive safety equipment to real accidentology and updating the car with state-of-the-art ADAS equipment such as advanced emergency braking with pedestrian and cyclist detection, lane-departure alert and lane-keeping assist, using a radar and a camera.’

Subtle deterioration in EU new-car markets in November

Autovista24 senior data journalist Neil King discusses how a new wave of COVID-19 cases, along with the appearance of the new Omicron variant, compounded ongoing supply issues and curtailed new-car registrations in key EU markets in November.

New-car registrations in France, Italy, and Spain declined by about 30% in November, compared to 2019. This initially suggests a modest improvement when reviewed against October but, adjusted for working days, the downturns were slightly more severe. The shortage of semiconductors continues to disconnect orders from registrations, but the resurgence of COVID-19 cases and concerns surrounding the new Omicron variant are impacting underlying demand. Accordingly, Autovista24 has revised its forecast for all three markets further downwards.

As registrations across Europe endured troughs because of COVID-19 lockdowns and peaks as pent-up demand was released, year-on-year comparisons with 2020 are incredibly volatile. Therefore, this article focuses on the latest developments compared to 2019, which better represent the true performance of new-car markets.

France 25% down on November average

According to data released by Plateforme Automobile (PFA), the French automotive-industry body, 121,995 new cars were registered in the country in November. This is 25% lower than the average of 163,000 new cars registered in the month between 2010 and 2019. Compared to two years ago, the market contracted by 29.4%, seemingly healthier than the 37.3% decline in October. However, there was an additional working day in November, and two fewer in October, than in 2019. On an adjusted basis, Autovista24 calculates that the market fell by 32.9% last month, compared to the adjusted 31.3% contraction in October.

In addition to rising COVID-19 cases, concerns about the Omicron variant, and the semiconductor shortages, the reduction in French incentives for electrically-chargeable vehicles (EVs) since 1 July has also impacted demand. Consequently, cumulative registrations in the first 11 months of the year were 25.1% lower than in the same period in 2019, subtly down on the 24.7% contraction in the first 10 months. The reduction of electrically-chargeable vehicle (EV) incentives has stabilised the market shares of both plug-in hybrids (PHEVs) and battery-electric vehicles (BEVs), at 8.4% and 9.3%, respectively. A further planned reduction of the incentives from 1 January 2022 has been scrapped, with the subsidies remaining in place until the end of June 2022. However, a €1,000 reduction in the incentives from 1 July 2022 onwards is being considered by the French parliament.

Given the latest developments, Autovista24 has downgraded its forecast to 0.6% year-on-year growth in 2021, following the 25.5% contraction in 2020, to 1.66 million units. This is 25% lower than the volume of cars registered in pre-crisis 2019, although the market is forecast to expand by 8% year on year in 2022.

Incentives exhauated in Italy

In Italy, industry association ANFIA has reported that 104,478 new cars were registered last month. Compared to November 2019, the market contracted by 30.8%, following a 35.7% fall in October. However, as in France, there were two fewer working days in October, and one more in November, than two years ago. On an adjusted basis, Autovista24 calculates that the market declined by 34.1%, more than the adjusted 29.6% contraction in October.

The Ecobonus incentives were resurrected on on 27 October but funding for BEVs and PHEVs ran out after a single day, and were exhausted for low-emissions vehicles on 3 November.

‘In addition to the prolongation of the semiconductor crisis, the total absence, in the current text of the 2022 Budget Law, of measures to address the ecological and energy transition of the sector is of great concern, as no funds have been allocated to support demand or supply,’ commented Paolo Scudieri, president of ANFIA.

The new-car market has further retreated from its cumulative 22.1% decline in the first 10 months of 2021 to a 22.8% contraction through to November. As Italy contends with rising cases of COVID-19 and vehicle supply is not expected to improve, Autovista24 has subtly reduced its forecast for 2021 down to 1.47 million units, equating to year-on-year growth of 6.5%. At this level, the market will be 23% smaller than in 2019. The Italian market is currently forecast to grow 8% year on year in 2022, nudging 1.8 million registrations The pace of the recovery depends on the impact of COVID-19, especially the Omicron variant, and whether purchase incentives are reintroduced.

‘It is essential to provide a structural plan at least over three years and with an adequate budget to avoid that Italy, in this delicate phase in which market policies are fundamental, is the only European country not to support consumers purchasing cars with zero or low emissions,’ Scudieri added. ‘We therefore welcome the presentation by various political forces of amendments to the Budget Law, which propose the refinancing of incentives in support of the demand for cars and light-commercial vehicles with low environmental impact.’

Spain ‘a very depressed market’

A total of 66,399 new cars were registered in Spain during November, according to ANFAC, the Spanish vehicle manufacturers’ association. This is the lowest tally for the month since 2014 and equates to a market contraction of 28.7% compared to two years ago. At first glance, this marks an improvement on the 37.2% downturn in October. However, there was an extra working day in November, and three fewer in October, compared to 2019. On an adjusted basis, the downturn was 32.1% last month, deteriorating from the adjusted 27.7% decline in October.

‘The data for November show that the the trend continues to be downward and even more so when we are comparing it with November of last year, which was a bad month. We do not stop being, therefore, a very depressed market,’ said Raúl Morales, communications director of the Spanish association Faconauto.

The reduction of car-registration taxes in the country since 1 July has been a positive influence for demand, but supply shortages have delayed deliveries. Compared to the first 11 months of 2019, cumulative registrations of new cars are down 32.9% as Spain also contends with rising COVID-19 cases and inflationary pressure.

Year-end positivity

There is some positivity, however, as order intake remains healthy despite the delivery delays and registrations are expected to receive a boost in December because of the planned rise in the vehicle-registration tax from 1 January 2022.

‘What does give rise to hope is that buyers have come to grips with the situation and are going to dealerships to make their purchase, even knowing that it will take longer than usual to receive their new vehicle,’ Morales commented.

Nevertheless, given the limited impact of the July registration-tax cut in Spain and the ongoing economic and supply issues, Autovista24 has revised its forecast for 2021 down to 852,000 units, equating to year-on-year growth of just 0.1%, even after the dramatic 32.4% contraction in 2020.

This aligns with the view of Ganvam's communications director, Tania Puche: ‘The market continues in free fall as a result of the pandemic and the microchip crisis. Everything indicates that it will close the year in the environment of 855,000 units.’

Registrations delayed from this year will naturally bolster the market in 2022, but cars will, rather unfairly, be subject to the higher registration taxes.

‘We estimate that an order book of more than 100,000 units has already been generated and will be converted into registrations next year. These 100,000 clients are going to be harmed by the increase in the registration tax on 1 January, so we insist on the need to extend it, also as a tool to regularise the market situation and move towards a more logical registrations level for our country and to advance the renovation of the parc,’ Morales concluded.

Autovista24 forecasts that the Spanish new-car market will grow by 9% in 2022, to about 930,000 units.

Steel-import restrictions could have manufacturing consequences

The European Automobile Manufacturers’ Association (ACEA) has reacted with disappointment to European Commission proposals recommending the extension of steel-import restrictions.

The Commission introduced measures in 2018 to restrict imports of steel into the EU, following similar restrictions taken by the Trump administration in the same year. This takes the form of a ‘tariff-rate quota’ that places a 25% duty on imports above a certain level.

With the COVID-19 pandemic causing economic problems for many European markets, the Commission could extend its restrictions by three years.

However, the proposal comes in the face of acute shortages in the European carmakers’ steel supply chain. These shortages have led to a slowdown in manufacturing, with crisis management of orders to help avoid production-line stoppages. The restrictions have also pushed up the price of steel, with producers now charging up to €1,300 per tonne for automotive grades.

Not enough

Vehicle manufacturers source over 90% of their steel in the European Union. However, since production lines started work again in the summer of 2020 following pandemic-related lockdowns, there has been a serious shortage, according to ACEA. The safeguard measures in place limit the potential of carmakers to balance these shortages through imports.

The industry body states that while the Commission proposes an expansion of the quota for certain automotive grades, the increase is marginal. This, it believes, would make no difference to the lack of supply or the inflationary effect of the safeguard.

‘In a market where EU steel producers are dictating prices and reporting record earnings, the idea that domestic steel is under threat of serious injury from imports is scarcely credible,’ stated ACEA director general, Eric-Mark Huitema.

UK restrictions continue

Following its withdrawal from the EU, the UK adopted the ‘steel safeguard’ measures on 19 of the 28 product categories of steel. Along with those of the EU, these quotas are due to expire on 30 June.

The UK’s Trade Remedies Authority (TRA) has published its final recommendation, with plans to extend measures on 10 product categories for another three years. These include grades for automotive manufacturing and vehicle parts.

The TRA also recommended the progressive liberalisation of the measure every year over the three years, increasing the levels of each of the allocated tariff rate quotas to ensure that the measure balances the needs of UK steel producers and those who use steel products.

‘The Trade Remedies Authority has been set up by statute to provide impartial, data-driven economic assessments like this recommendation on steel safeguards. We have listened carefully to all interested parties throughout the review, and we have made some important changes to our preliminary decision in light of new information provided over the past few weeks,’ explained chief executive of the TRA, Oliver Griffiths.

Manufacturing disruption

Carmakers are already reeling from numerous manufacturing impacts that have slowed production rates. The COVID-19 pandemic caused lines to close for some months due to lockdowns, while the economic implications slowed sales once they resumed.

This year, the issue of semiconductors has become a hot topic. Manufacturers are struggling to find supplies of the critical components as they battle against an increase in sales of technology goods, with consumers buying new phones, laptops and other devices during lockdowns.

As the automotive industry tries to recover from the impact of COVID-19, any further disruptions to supply chains and impact on production will not be welcomed. ‘We need imports to fill supply chain gaps,’ concluded Huitema. ‘If this proposal is approved by member states in its current form, then the market situation will remain critical for automobile manufacturers for the foreseeable future.’

Renault, Stellantis and VW charged over diesel emissions in France

French prosecutors have charged Renault, Stellantis and Volkswagen Group (VW) with allegedly defrauding customers over diesel emissions, as the controversy surrounding the technology rumbles on.

The three carmakers have been issued varying levels of ‘bail’ depending on the prosecutor’s findings. Each is currently exploring options for their defence. The French charges come from a judicial investigation opened in early 2017, following the Dieselgate scandal that broke in 2015.

Alongside their bail payments, each company also has to provide a bank guarantee. Should they be found guilty, compensation will be taken from this amount. Fines will be extracted from the initial payment required by the carmakers.

Domestic diesel despair

‘In the context of the judicial investigation opened on 12 January 2017 relating to older generations of diesel vehicles, Renault s.a.s. was placed under examination on 8 June 2021 on the charge of deceit,’ the carmaker said. ‘Renault will have to pay a bail of €20 million, €18 million of which will be dedicated to the potential payment of damages and fines, and will have to provide a bank guarantee of €60 million dedicated to the potential compensation for losses.’

For Stellantis, the issue is more complicated. The start of investigations in January 2017 saw both PSA Group and Fiat Chrysler Automobiles (FCA) involved. Now, prosecutors have charged the company’s Peugeot brand with deceit. However, its Citroën marque has been summoned to appear in court, as has Fiat. Should they also be charged, it is unclear whether the courts will consider the merged company as one when it comes to fines, especially as the ‘offences’ took place when both were trading separately. This could possibly leave Stellantis facing two bail and bank-guarantee payments.

‘As part of the judicial investigations of several automakers commenced in 2016 and 2017, Automobiles Peugeot S.A., a wholly-owned subsidiary of Stellantis N.V., was placed today under examination by the Judicial Court of Paris on allegations of consumer fraud in connection with the sale of Euro 5 diesel vehicles in France between 2009 and 2015,’ the company stated.

‘As typical in a French criminal inquiry, Automobiles Peugeot S.A. will have to pay a bail of €10 million (of which €8 million for the potential payment of damages and fines and €2 million to ensure the company’s representation in court) and will have to provide a bank guarantee of €30 million for the potential compensation for losses.

Differing defence

VW was ordered to pay a bail bond of €10 million, with a bank guarantee of €60 million. For the German carmaker, the news is bittersweet. The company had just announced an agreement with former management members Martin Winterkorn and Rupert Stadler. They will pay the carmaker €11.2 million and €4.1 million in compensation in connection with the ‘diesel issue’. VW also reached terms with insurance company D&O, which will see the carmaker receive a payout of €270 million.

‘The payments relate to the investigation started by the Supervisory Board in October 2015 into the causes of the diesel crisis and who was responsible for this,’ the company said. ‘Ultimately, the Board resolved in March to assert claims for damages against Winterkorn and Stadler on account of breaches of the duties of care under stock corporation law. No breaches of duty by other members of the Group Board of Management were identified.’

Having faced legal challenges from across Europe over the Dieselgate saga, VW is preparing a robust defence against the French charges.

‘Proceedings against VW AG have been concluded in Germany in 2018 with the payment of a fine in the amount of €1 billion for the same alleged facts, including vehicles sold in France. The payment of this fine does not imply any admission of these facts or of its responsibility,’ the carmaker told Autovista Group.

‘Therefore, VW AG remains convinced that double sentence for the same alleged facts should be prohibited in this case according to the applicable ”ne bis in idem” principle. This fundamental issue is currently pending before the Court of Appeal of Paris. In any event, it is VW AG’s position that French customers have not suffered any compensable loss in connection with the purchase of a VW vehicle.’

Innocence presumed

Both Renault and Stellantis also stated that while the proceedings develop, their innocence is presumed. The carmakers have also said that they never fitted ‘defeat devices’ – which would recognise test conditions and adjust emissions output to more favourable levels. These devices were at the heart of the original Dieselgate scandal.

‘Renault denies having committed any offence and reminds that its vehicles are not equipped with any rigging software for pollution control devices,’ the company concluded. ‘Renault has always complied with French and European regulations. Renault vehicles have all and always been type-approved in accordance with applicable laws and regulations.’

‘[Stellantis] firmly believes that their emission-control systems met all applicable requirements at the relevant times and continue to do so and look forward to the opportunity to demonstrate that,’ the manufacturing group added.

‘The Stellantis Group, which was established in January 2021, will continue its predecessors’ policies and cooperate fully with the justice system in order to resolve this matter expeditiously.’

It is not yet known when the cases will be brought to trial. However, Stellantis has made reference to a decision over FCA’s charges coming in July this year. Therefore, it may be some time before this chapter of the Dieselgate saga is brought to a close.

Fiat to go all electric by 2030

Fiat will phase out internal-combustion engine (ICE) vehicles from 2025, aiming to go all electric by the end of the decade. The move was confirmed in an environmental discussion between Fiat CEO and Stellantis CMO, Olivier François, and environmental architect and urban planner Stefano Boeri.

As one of the 14 subsidiary brands making up the newly-formed Stellantis group, this move towards electrification will put Fiat on course to lead the charge. Fiat Chrysler Automobiles (FCA) and PSA Group merged at the beginning of this year and in April set a new electrification target. By the end of this decade, the group is aiming to generate 70% of its European passenger-car sales from electrically-chargeable vehicles (EVs). This is a significant increase on the 14% EV-share target for the current year.

Other carmakers have set similar goals. For example, Jaguar will go electric only by 2025, and Ford wants its entire European passenger-vehicle range to be zero-emissions capable by mid-2026. In the same year, Bentley hopes to become the first Volkswagen (VW) Group brand to commit to complete electrification. In March, both Volvo and Mini confirmed they would go electric-only by 2030.

New Renaissance

François and Boeri sat down in front of a camera for World Environment Day 2021 to discuss urban mobility and sustainable architecture. An automotive company and an architect might seem like a strange combination. But societal trends, increasing concern over environmental issues, and the fallout from COVID-19 had the pair considering a ‘New Renaissance.’ Combining green architecture like Boeri’s Bosco Verticale building, which holds 27,000 C02-absorbing plants, and battery-electric vehicles (BEVs) like the Fiat 500 Electric holds the potential for greener cities.

François said that ‘the decision to launch the New 500 – electric and electric alone – was actually taken before COVID-19. Even then, we were already aware that the world could not take any more “compromises.” In fact, lockdown was only the latest of the warnings we have received.’ He explained that the pandemic was yet another reminder of the urgent need to act, and do something for the planet.

Another transformation

This has led the carmaker and its iconic 500 to add an important new word to its ‘mobility for all’ mission statement: ‘sustainable mobility for all.’ So, Fiat is looking to bring more affordable EVs to the market, ones with a price tag no bigger than an ICE-powered model. It hopes to do this as soon as possible, in line with the falling cost of batteries. ‘Between 2025 and 2030, our product line-up will gradually become electric-only. This will be a radical change for Fiat,’ François said.

To ensure that sustainable mobility can be accessed by all, Fiat will need to look beyond the vehicle itself. The carmaker has already recognised the need to make electric models more accessible through ‘innovation and new financial products.’ Given the larger price tags that accompany new EVs, shared mobility is an option many OEMs are exploring. Urban centres, where air pollution is a particular environmental issue, hold the potential for a new take on transport, with consumers paying for the mode they need when they need it. Why own a car when you can pay to access an EV, clean public transport, or a micro-mobility solution?

Whether owned by the consumer or not, these EVs will also need access to infrastructure. Fiat points out that private charging points at apartment buildings, as well as the penetration of fast-charging stations, must increase. Beyond adapting what already exists, thought must go into the buildings of the future to ensure they are capable of supporting this move towards electromobility. This means reassessing urban planning, and considering how designing buildings today might impact the roads tomorrow.

Further resilience in European used-car demand during the first quarter

Senior data journalist Neil King considers how the big five European used-car markets developed in the first quarter of 2021.

Europe’s big five used-car markets exhibited further resilience in the first quarter of 2021. The total volume of transactions grew year on year in France, Italy, and Spain. Germany and the UK endured single-digit declines, but dealer activity was hampered by COVID-19 restrictions. Nevertheless, the year-on-year performance of both used-car markets outperformed the respective new-car markets.

Used-car transactions in the first quarter increased by 17.9% year on year in France, according to the French industry association CCFA. This was slightly lower than the 21.1% year-on-year growth in new-car registrations. However, these figures were adversely affected by comparing to a period that included the start of the country’s lockdown, from mid-March 2020.

This situation was replicated in Italy, with 11.5% growth in used-car transactions in the first quarter of this year, according to trade body ANFIA. This compared to 28.7% growth in new-car registrations as the country entered lockdown earlier last year, on 12 March.

In contrast to the dramatic 14.9% year-on-year decline in new-car registrations in Spain in the first three months, used-car transactions increased, albeit by just 1.1%, according to GANVAM, the Spanish dealers’ association. However, GANVAM cautions that ‘the average age of used passenger cars sold until March reached 10.6 years, compared to 10.4 last year, and exceeded 14 years – compared to 13.6 in the first quarter of 2020 – in the transactions between individuals.’ This exemplifies the demand for cheap used cars across Europe as a substitute for public transport in the wake of the COVID-19 pandemic.

‘The used-car market in Spain is always more favoured than the new-car market in times of crisis. The age structure of these sales has changed substantially in recent months and will continue to do so throughout 2021. The most notable change is undoubtedly the lower prevalence of young used cars in the market, caused by the standstill in tourism and the lack of renewal of rental fleets,’ explained Ana Azofra, Autovista Group head of valuations and insights, Spain.

Downturns in Germany and the UK

Whereas used-car demand increased in France, Italy and Spain in the first quarter of 2021, it contracted in Germany and the UK due to COVID-19 restrictions. However, the downturns were less pronounced than in the new-car markets, which rely far more heavily on the dealer network.

In Germany, the used-car market contracted by 4.6% in the first three months of 2021, according to the motor-vehicle authority KBA. However, dealerships in the country could only reopen, conditionally, from 8 March. This naturally impacted the new-car sector more, with registrations down 6.4% year on year in the first quarter. Schwacke expects a slight improvement in used-car sales compared to 2020. ‘The used-car business was quite successful under the circumstances and sold slightly more than seven million cars by the end of 2020. The forecast for 2021 is the same – around seven million cars,’ commented Andreas Geilenbrügge, head of valuations and insights at Schwacke.

The UK’s used-car market suffered the greatest downturn of the big five European markets in the first quarter of 2021, with 8.9% fewer transactions than in Q1 2020, according to the UK Society of Motor Manufacturers and Traders (SMMT). However, this compares favourably to the new-car market, which contracted by 12%, as it was more adversely affected by the closure of dealers until 12 April. Used-car transactions are expected to improve in 2021, but with a lower growth rate than new-car registrations.

‘Among the turbulence, demand for used battery-electric (BEV), plug-in hybrid (PHEV) and hybrid vehicles (HEV) remained strong in Q1. Buyers were keen to purchase pre-owned ultra-low and zero-emissions cars, helped by increased availability and more models available,’ the organisation stated.

SMMT chief executive Mike Hawes has also highlighted the positivity, commenting that ‘the second quarter will see significant growth as last year’s April and May markets were severely limited by lockdown measures. It is vital that the used market is rejuvenated to help sustain jobs and livelihoods, drive fleet renewal and support environmental progress. With car showrooms open again and the UK coming out of COVID restrictions, the sector can look forward with renewed optimism.’

Supporting residual values

The ongoing comparative strength of Europe’s big five used-car markets supports Autovista Group’s core prediction, outlined at the start of the year, that residual values (RVs) face limited pressure in 2021.

Autovista Group’s COVID-19 tracker shows that the RV index finished 2020 at or above pre-crisis levels in all of Europe’s major markets. The measurements began in February 2020, with an index value of 100. RVs retreated in most markets at the start of 2021, but have recovered again in recent weeks and remain firmly above pre-crisis levels.

Source: Autovista Group, Residual Value Intelligence, COVID-19 tracker

Looking ahead, the economic fallout from the COVID-19 pandemic, as well as the ongoing aversion to public transport, will support used-car demand. Furthermore, the semiconductor shortages are curtailing supply of new cars, favouring demand for young used cars.

Autovista Group’s latest monthly market dashboard reveals that the average value retention of cars, represented in RV-percentage (RV%) terms, improved month on month in four of the big five European markets in April. Italy was the exception, where the average RV% fell, albeit by only 0.8%. However, in value terms, average RVs declined by 2% and 0.5% in Italy and Spain, respectively. This ties in with demand for cheaper used cars, in the same way that older used cars increased the average age of used cars transacted in Spain in the first quarter of 2021.

For now, RVs in the 36-month/60,000km scenario remain above levels of a year ago in all markets. But they are forecast to end 2021 slightly down compared to December 2020, except in the UK. The poorest RV outlook is in Italy, where values are currently forecast to fall by 2.3% in trade percentage terms. Used cars have not weathered the COVID-19 storm better than new cars, and the introduction of additional incentives for low-emission new cars has applied more pressure on used-car demand and RVs.

Subaru reveals the name of its new electric SUV

Subaru has revealed the name of its first battery-electric vehicle (BEV): Solterra. Built on the dedicated e-Subaru global platform, the C-SUV will go on sale next year in countries around the world.

The Solterra will join the ever-expanding electric C-SUV segment which features the likes of the Volkswagen (VW) ID.4, the Ford Mustang Mach-e, and the Audi e-Tron. Given the present popularity and higher residual value of SUVs, the decision by so many carmakers to opt for this segment might appear obvious, but the reasoning goes deeper.

The development of new electric drivetrains is an expensive venture, one which the higher price tags of these large vehicles can help compensate for. A BloombergNEF study also recently revealed larger BEVs are expected to reach price parity with their fossil-fuel counterparts earlier than smaller electric models, encouraging consumer adoption and directing development.

Defining a name

The new Subaru’s name was created via a portmanteau of the Latin for Sun and Earth, Sol and Terra. This naming convention signifies the need to appreciate and coexist with the planet, the carmaker explained. This effort to be seen to have a planet-friendly attitude comes as OEMs respond to a wave of climate concern by building electrically-chargeable vehicles (EVs) and foregoing fossil-fuel-powered ones.

‘Subaru gave this name to the EV to appreciate mother nature and further advance the form of coexistence with it, together with our customers, and to represent our commitment to deliver traditional Subaru SUV’s go-anywhere capabilities in an all-electric vehicle,’ the carmaker said.

Solterra will join Subaru’s line of existing SUVs, including the Ascent, the Outback, the Forester and the XV. It will go on sale globally by the middle of 2022 in markets including Japan, the US, Canada, Europe and China.

Joint development

The Solterra will sit on top of the e-Subaru global platform, which the OEM developed alongside Toyota, another carmaker looking to introduce an electric SUV into the market: the bz4X. This jointly-developed platform will enable the rollout of various EV types by combining multiple modules and components, like the front, centre and rear of the vehicle.

This modular approach to BEV platforms is a running theme for carmakers as they look to streamline development and production, as well as incorporating collaboration. For example, VW’s modular electric-drive (MEB) platform is the foundation of its ID. family, but the company also joined electric forces with Ford. In a similar vein, while the two Japanese OEMs came together to build the Solterra’s platform, Subaru emphasised its aim to realise ‘superior passive safety and vehicle stability’ within the build.

Looking past the BEV’s modular platform, the two companies also worked together on product planning, design and performance evaluation. Relying on their respective strengths, Subaru leant into its all-wheel-drive capabilities, which unsurprisingly also informed the building of the bz4X. Meanwhile, Toyota’s vehicle-electrification technology helped give the Solterra a boost, lending it attributes that ‘only an all-electric vehicle can offer.’

This modular, collaborative approach will help keep development costs down and ensure the creation of more advanced technologies. However, it will also mean the homogenisation of powertrains. On this path, many BEVs will end up sharing similar designs and capabilities on a smaller handful of electric bases. So, while consumers may only be able to choose from a few platforms, the scope for brand-based design will reside largely within the body and interior. This means carmakers will need to make sure they know what their customers want.

BEV vs ICE: a race to price parity

Battery-electric vehicles (BEVs) will achieve price parity with their fossil-fuel counterparts across Europe from 2027 at the latest. This is according to the results of a new BloombergNEF study commissioned by the clean-transport campaign group Transport and Environment (T&E).

Electrically-chargeable vehicle (EV) adoption is increasing with help from incentive programmes and expanding model offerings. In the first quarter of this year, BEVs accounted for 5.7% of EU new-car registrations, an increase of 59.1% compared to the first three months of 2020. Plug-in hybrids (PHEVs) took 8.2% of the market, equating to an increase of 175%. Meanwhile, diesel and petrol-powered cars continued to see falling volumes.

However, the automotive industry is still in the early stages of electrification. Presently, those investing in EVs have both the confidence and capital to invest in electric drivetrains. As components, particularly batteries, become cheaper and more technologically advanced, EV price tags should shrink.

Price parity

The segment will dictate a BEV’s point of price parity with petrol in the coming years, with larger vehicles becoming more affordable more quickly. According to the BloombergNEF study, light vans will lead the charge, becoming cheaper than their ICE counterparts in 2025. BEVs in the C and D segments will follow in 2026, while small cars (B segment) bring up the rear in 2027.

Source: T&E

‘EVs will be a reality for all new buyers within six years,’ said Julia Poliscanova, senior director for vehicles and e-mobility at T&E. ‘They will be cheaper than combustion engines for everyone, from the man with a van in Berlin to the family living in the Romanian countryside. Electric vehicles are not only better for the climate and Europe’s industrial leadership, but for the economy too.’

Building better batteries

So, what will be the driving force behind shrinking costs? The BloombergNEF study points to falling battery costs, new vehicle architectures and dedicated production lines as leading factors in reducing price, even before subsidies come into the equation. ‘An optimal vehicle design, produced in high volumes, can be more than a third cheaper by 2025 compared to now,’ the study states.

Source: T&E

Batteries in particular have had an important role to play as they have consistently been the most expensive EV component over the past decade. In the US, they currently account for roughly 30% of an EV’s cost. In Europe, prices are more widely spread, raising the continent’s average battery price above the global average – resulting partly from some lower-volume orders. But as battery prices fall and more optimised platforms are developed, EV prices should follow.

‘New chemistries, better manufacturing methods, innovative cell and pack-design concepts and other factors contribute to average prices per kilowatt-hour declining by 58% from 2020 to 2030,’ BloombergNEF points out. Past this point, new technologies like the solid-state battery will continue to drive down price. These smaller, more powerful units are seeing an uptick in interest from OEMs. Most recently, BMW and Ford led an investment round in Solid Power, a producer of solid-state batteries.

Plugged-in projections

Europe could see 4.3 million plug-in vehicles sold in 2025, representing roughly 28% of the market. BEVs would capture over half of those sales, with the rest made up by PHEVs as carmakers use them to meet emissions targets. In an economics-driven scenario, BloombergNEF believes BEVs could claim up to half of Europe’s market share of sales by 2030 and 85% by 2035.

T&E points out that battery-electric cars and e-vans could reach 100% of new sales by 2035 – including southern and eastern Europe, where initial take-up rates have been comparatively slow. However, this would be dependent upon lawmakers ramping up CO2 targets and producing policies to stimulate market developments including the introduction of more infrastructure. The environmental group states that without these additional policies, battery-electric cars will claim 85% of the EU market and e-vans 83%. This would mean missing Europe’s goal to decarbonise by 2050.

‘With the right policies, battery-electric cars and vans can reach 100% of sales by 2035 in western, southern and even eastern Europe,’ said Poliscanova. ‘The EU can set an end date in 2035 in the certainty that the market is ready. New polluting vehicles should not be sold for any longer than necessary.’

In April, T&E published the results of a poll of 15 European cities showing that nearly two thirds of urban residents support a ban on the sale of new petrol and diesel cars by 2030. Additionally, Volvo Cars, Uber and LeasePlan were recently among a group of companies calling for an end date to new ICE car purchases in Europe no later than 2035. While requests for electrification mount alongside evidence of EV credentials, shrinking price tags will undoubtedly increase adoption rates.   

The UK’s paved and winding road towards driver-assisted vehicles

The UK has taken a step forward on the road to legalising driver-assistance technology. But this news has received a mixed reception. While a collaborative approach to rapidly developing vehicle technology has been welcomed, concerns around legislation, technical definitions and consumer confusion have also arisen.

Automotive safety experts have pointed out that Automated Lane Keeping Systems (ALKS), as currently proposed by the government, are not automated. As assisted-driving systems, they rely on the driver to take back control. This move, therefore, risks contributing to consumer confusion and misuse.

The comments came after the UK Government announced vehicles with ALKS could be seen on British roads for the first time later this year. Designed for use in slow-moving motorway traffic, vehicles sporting them would be limited to 37mph (60km/h). Following a call for evidence, the Department for Transport laid out how vehicles fitted with an ALKS could legally be defined as ‘self-driving’.

Collective development

Speaking with Autovista Group’s Daily Brief, Peter Allchorne, partner at legal firm DAC Beachcroft, described a delicate balancing act between technology and regulation as automated vehicles are developed. On the one hand, overregulation must not stifle this innovation. ‘Automated vehicles will absolutely be a good thing in the fullness of time,’ Allchorne said.

On the other hand, safety must not be jeopardised in the pursuit of advancing these systems. The incremental development and deployment of automated technology will need to be rolled out incredibly carefully to ensure not only safety but complete consumer understanding of their abilities.

A collaborative effort between the likes of automotive companies, legislators, and insurers will be required to achieve this balance. ‘I think it is increasingly important that the key stakeholders get around the table in order to iron out the detail of making these things as safe as they possibly can be for consumers as they come to market,’ Allchorne said.

This was a point echoed by TRL (Transport Research Laboratory) to the Daily Brief. ‘We have begun a decade of considerable change for the automotive industry. To ensure the continued safety of road users, it is critical that all stakeholders – from collision investigators to insurers – maintain pace with technological change and evolve in tandem,’ they said. ‘A new automotive environment is coming, and all sectors involved in transport must begin preparations now.’

Caution needed

Upon hearing the government’s announcement, Thatcham Research and the Association of British Insurers (ABI) urged for caution. ‘There is still a lot of work needed by both legislators and the automotive industry before any vehicle can be classed as automated and allowed safely on to the UK roads,’ said Matthew Avery, director of research at Thatcham Research.

He explained that ALKS, as proposed by the government, are not automated. As assisted-driving systems, they rely on the driver to take back control. Avery pointed out that by calling ALKS automated, the government risks contributing to consumer confusion and misuse of these systems.

‘A widespread and effective ongoing communications campaign, led by the automotive industry and supported by insurers and safety organisations, is essential if we are going to address current and future misconceptions and misuse.’

The two bodies laid out four ‘non-negotiable criteria’ which need to be met before ALKS can be classified as automated.

  • The vehicle must have the capability, and be allowed through legislation, to safely change lanes to avoid an incident
  • The vehicle must be able to find a ‘safe harbour’ at the roadside and not stop in a ‘live’ lane
  • The system must be able to recognise UK road signs, which needs to be assured by an independent organisation
  • Data must be made available remotely through a neutral server to verify who was ‘in charge’ at the time of an incident – the driver or the vehicle.

‘While the insurance industry fully supports the development towards more automated vehicles, drivers must not be given unrealistic expectations about a system’s capability. It is vital that ALKS, which rely on the driver to take back control, are not classed as automated, but as assisted systems,’ said Mark Shepherd, assistant director and head of general insurance policy at ABI.

He went on to state that Thatcham Research had identified some concerning scenarios where the technology might not operate safely without driver intervention, which would need to be addressed in the consultation.

A first step

The government outlined that vehicles fitted with ALKS technology could be legally defined as ‘self-driving,’ as long as they met type approval and there is not any evidence standing against their ability to ‘self-drive.’ The announcement comes as a new consultation is launched on Highway Code rules. With the rapid development of autonomous technology, legislation will need to ensure its safe and responsible use.

‘This is a major step for the safe use of self-driving vehicles in the UK, making future journeys greener, easier and more reliable while also helping the nation to build back better,’ said transport minister Rachel Maclean. ‘But we must ensure that this exciting new tech is deployed safely, which is why we are consulting on what the rules to enable this should look like. In doing so, we can improve transport for all, securing the UK’s place as a global science superpower.’

The government argues autonomous technology could improve road safety by reducing human error, which they say contributes to 85% of accidents. This is a point Mike Hawes, Society of Motor Manufacturers and Traders (SMMT) chief executive, agreed with as he welcomed the technological and legal step forward. ‘Automated driving systems could prevent 47,000 serious accidents and save 3,900 lives over the next decade through their ability to reduce the single largest cause of road accidents – human error.’

It could help bring about the end of urban congestion, lower emissions, and provide a means of transportation for people with mobility issues. Furthermore, the government argues that connected and autonomous-vehicle technology could create roughly 38,000 new jobs, in a UK industry that could be worth £42 billion (€48 billion) by 2035.

‘Technologies such as Automated Lane Keeping Systems will pave the way for higher levels of automation in future – and these advances will unleash Britain’s potential to be a world leader in the development and use of these technologies, creating essential jobs while ensuring our roads remain among the safest on the planet.’

French government extends automotive-industry support plan

The French government has signed an amendment to the €8 billion support plan for the automotive industry, first announced by President Emmanuel Macron in May 2020.

New measures include changes to incentives for electric light-commercial vehicles, accelerated expansion of the charging network, and additional funding for the production of electrically-chargeable vehicle (EV) components. There will also be an assessment of the economic and social impact of vehicle electrification. Accordingly, the government has pledged €50 million to support and retrain for employees affected in the automotive foundry industry.

Floundering foundries

One sector that is adversely affected by the electrification of vehicles in France is the automotive foundry industry. In conjunction with growing international competition and the weight reduction trend in vehicles generally, foundries have seen a sharp drop in demand for components for internal combustion engines (ICEs). This is also creating ‘major changes in the technologies and skills required to meet the expectations of automobile manufacturers and suppliers.’

To aid this struggling sector, car manufacturers, foundry companies and the French state have ‘collectively decided to set up a specific action plan to face these structural challenges.’ Measures include supporting foundry players in their diversification and the achievement of operational excellence, including investment. Under the recovery plan, automotive foundries have already been able ‘to benefit from more than €13.4 million of public aid, which has come to support €35.3 million of productive investments in France.’

As in the wider automotive industry, the government plan will also support the retraining of employees. ‘The prospective study by the metallurgy observatory on jobs and skills in the automotive sector will be extended by an analysis of the skills gaps to be filled between declining jobs and new jobs, in order to offer training adapted to employees exposed to job losses.’

An exceptional €50 million government fund to support and retrain employees will be topped up with a contribution of €20 million from manufacturers, with the details to be outlined in the coming weeks. Within the framework of the Territoires d’Industrie (industry territories), affected communities will also be able to benefit from support and France Relance (relaunching France) measures will be ‘prioritised to subsidise industrial investments that create jobs.’

Boosting electrification

The share of battery-electric vehicles (BEVs) in the French passenger-car market more than trebled in 2020, increasing from 1.9% in 2019 to 6.7% in 2020, according to the French carmakers’ association CCFA. Similarly, the commercial-vehicle sector aims to treble the share of electric light-commercial vehicles (LCVs) in the next two years. Therefore, the bonus scheme for LCVs will be ‘adjusted to reduce the difference in acquisition and user costs, which today appears too large to develop sales in this niche,’ the government states.

The expansion of the charging infrastructure is also a priority in France. ‘This summer, 156 service areas out of the 368 on the motorway network will be equipped with fast-charging stations. At the end of 2021, there will be 192. A budget of €100 million is dedicated to this within the framework of France Relance,’ the release reads.

The amended plan also seeks to strengthen the competitiveness of the automotive industry and support the local production of EV components. In July 2020, more than €150 million were committed to 25 projects, including €120 million to develop the production of strategic components for EVs. 17 new projects, representing an additional €150 million of public support, have been shortlisted for in-depth examination for the next wave of announcements by the summer. This support also comes on top of a €680 million grant for the establishment of a new battery plant in Douvrin. The facility is operated by the Automotive Cells Company (ACC), the joint venture between Stellantis and Saft, a subsidiary of the energy company Total.

Supporting companies

A working group will be set up to support the conversion and upscaling of automotive services, which will consider the anticipated economic and social impact of the ‘ecological transition’,as well as the forward-looking management of jobs and skills.

The French state has already financed 303 automotive companies, mainly small and medium-sized enterprises (SMEs), to modernise and diversify – to the tune of €278 million. The working group will now ‘revise the HR roadmap for the sector by the end of September 2021, to integrate the conclusions of the last prospective study on employment and skills and to adjust support and training systems for employees.’

Additionally, four new campuses for automotive trades and qualifications will be established, ‘to strengthen the attractiveness of trades in the sector as well as cooperation between academic and industrial circles,’ the release states.

Germany tackles tax fraud from cross-border vehicle registrations

The president of the German federal central tax office (BZSt), Maren Kohlrust-Schulz, and the president of the Kraftfahrt-Bundesamt (KBA), Richard Damm, have signed an agreement to tackle tax fraud from cross-border vehicle registrations. The BZSt will receive support with access to the national-vehicle registers of EU member states that use the EUCARIS system for the exchange of vehicle and driving-licence data.

If VAT fraud is suspected, vehicle and owner data can be queried on the basis of the vehicle-identification number (VIN), licence-plate number or owner information. The data is exclusively accessed by Eurofisc liaison officers, a fixed group of experts that investigate sales-tax fraud across the EU.

Crime-fighting data exchange

Kohlrust-Schulz considers ‘the newly created access via EUCARIS to be a sensible extension in order to be able to fight sales tax fraud with vehicles in the European internal market faster and more efficiently.’

‘With the connection of the BZSt to EUCARIS, the European system for the exchange of owner and vehicle data has a further opportunity to combat cross-border crime. We have the data, the legal options and, with EUCARIS, a powerful and effective procedure that accelerates the Europe-wide exchange of data to fight crime. I therefore expressly welcome this development,’ commented Damm, who is responsible for the technical implementation of the EUCARIS process in Germany following the signing of the agreement.

This new agreement follows on from the council of the European Union creating the necessary legal prerequisites, based on a proposal from the EU Commission. The legal basis for the procedure, EU regulation 2018/1541, stipulates that each member state must allow the relevant authority of every other member state automated access to certain information from their national-vehicle registers.

‘This avoids VAT refunds for a vehicle that has not been sold in one country but someone pretends has been – a kind of double registration,’ commented Andreas Geilenbrügge, head of valuations and insights at Schwacke. ‘This could also be an instrument to identify eco-bonus fraud for young used cars that might have received a bonus in one country, only to get another bonus in Germany for example, which is explicitly not allowed under the German rules.’

Open to abuse

The widely varying vehicle-tax regimes across the EU have created a market for cross-border registrations.

In Germany, the VAT rate is 19% and the registration fee for a standard passenger car is fixed at just €26.30. In neighbouring Denmark, however, the VAT rate is 25%. Furthermore, a registration tax of 85% is charged on the value of the vehicle up to DKK 197,700 (€26,578) and if it is valued over DKK 197,700, a tax rate of 150% is applied. Given the costlier tax regime in Denmark, net prices are lower and this led to cross-border sales, with German buyers importing cars and then paying VAT at the lower German rate.

The new agreement will not halt this practice but the system is open to abuse, and the primary aim is to prevent any criminal tax fraud.

Nvidia expands its automotive influence

The automotive industry is undergoing a monumental period of change. Megatrends like digitisation, sustainability, and electromobility are transforming how a car is designed, built and powered. This means suppliers are also changing as carmakers require more advanced and specialist know-how.

A primary example is the accelerated computing company Nvidia, which first made its name at the turn of the century in the PC-gaming market. Now it is working with Volvo Cars, Zoox and SAIC on the next generation of AI-based autonomous vehicles. Its Omniverse platform is even being used by BMW Group to plan complex manufacturing systems. As Jensen Huang, founder and CEO of Nvidia, said: ‘Transportation is becoming a technology industry.’

254 trillion operations per second 

Volvo, Zoox and SAIC have joined the growing number of transportation companies using the latest Nvidia Drive system. The tech company’s pipeline for the system now totals more than $8 billion (€6.7 billion) over the next six years, which it says reflects the growing range of next-generation vehicles.

‘Besides having amazing autonomous driving and AI technologies, vehicles will be programmable platforms to offer software-driven services. The business models of transportation will be reinvented,’ Huang said. ‘Our design wins demonstrate how Nvidia is partnering with one of the world’s largest and most impactful industries to help revolutionise the future of mobility.’

Volvo will expand its collaboration with the company to use its Nvidia Drive Orin system-on-a-chip (SoC) technology. This will work with software developed in-house by the carmaker and its own software company Zenseact, to power autonomous-driving systems in its next-generation models. The SoC is capable of carrying out 254 tera (or 254 trillion) operations per second (TOPS), which will be essential given the enormous amount of computing power needed for autonomous driving.

Volvo will deploy Orin based on its SPA2 modular vehicle architecture, with the upcoming XC90 front-lining what the SoC can do. The carmaker’s new platform will be available as hardware-ready for autonomy from the beginning of production. Highway Pilot, Volvo’s ‘unsupervised autonomous driving feature,’ will be activated when verified as safe for individual geographic locations and conditions.

‘We believe in partnering with the world’s leading technology firms to build the best Volvos possible,’ said Henrik Green, chief technology officer. ‘With the help of Nvidia Drive Orin technology, we can take safety to the next level on our next generation of cars.’

Robotaxis and EVs

Robotaxi company Zoox is also developing with the help of Nvidia’s technology. The ‘mobility-as-a-service’ (MaaS) provider recently unveiled its Nvidia Drive-powered, purpose-built, bi-directional robotaxi designed for urban areas.

Chinese MaaS provider, Didi, also announced it is adopting Nvidia Drive for its entire autonomous driving test fleet. These two companies will join the ranks of other robotaxi builders already developing on these advanced systems, including Pony.ai and Auto X.

An increasing number of new companies will also use Nvidia Drive Orin to build software-defined vehicles, including Chinese carmaker, SAIC. Its R Auto family will feature the R-Tech advanced intelligent assistant, powered by Orin to run perception, sensor fusion and prediction for automated driving features in real-time. Its premium IM brand will deliver long-range electrically-chargeable vehicles (EVs) with help from the system. This line-up will include a sedan and an SUV with autonomous parking and other automated-driving features.

Virtual factory planning

Nvidia is also working with BMW to create a new approach to planning manufacturing systems with its Omniverse platform. This virtual factory mapping tool integrates planning data and applications, allowing for real-time collaboration.

‘Together we are about to make a huge leap forward and open up completely new perspectives in the field of virtual, digital planning,’ said Milan Nedeljković, BMW board member for production. ‘In the future, a virtual representation of our production network will allow us to realise an innovative, integrated approach to our planning processes. Omniverse greatly enhances the precision, speed and, consequently, the efficiency of our planning processes.’

While virtual factory planning is nothing new, it does require the import of data from various applications. This can be time-consuming as well as complicated owing to compatibility issues. In future, the platform will allow live data to be collected and collated from all databases to create a joint simulation. A new level of transparency will enable teams to plan complex systems with greater speed and accuracy.

Developers at BMW will be able to visualise the entire planning lifecycle for every plant in the global production network. This will be supported by a wide range of AI-capable applications, from autonomous robotics to predictive maintenance and data analysis.

‘I am delighted that BMW is using Nvidia Omniverse to connect their teams to design, plan and operate their future factories virtually before anything is built in the physical world,’ said Huang. ‘This is the future of manufacturing.’

Germany should reopen dealerships despite COVID-19, says ZDK

German car dealerships should be allowed to reopen, despite rising COVID-19 infections in the country. This is the view of the Federation of Motor Trades and Repairs (ZDK).

The call comes after the German government extended lockdown measures to 18 April, following a sharp rise in infection numbers. This ‘third-wave’ of COVID-19 is being felt across Europe, with France also imposing restrictions on non-essential retail.

Lockdowns are harming the ‘economically important’ automotive industry, argues ZDK president Jürgen Karpinski. ‘We have to prepare for a disastrous automotive year in 2021, and not just in retail,’ he adds. ‘Many livelihoods in the medium-sized, motor-vehicle trade are at stake.’

German dealerships have been closed for three months, hurting new-car registrations in the country. In the first two months of the year, the market is down 25.1%. This has not been helped by an increase in VAT from 16% to 19%. Around 40,000 registrations were pulled forward to December 2020 as a result, Autovista Group estimates. From 8 March, dealers were allowed to reopen, but with restrictions in place. These included infection rates in individual states and the floor area of the showroom. However, these plans have now been pushed back.

Dealers vs hairdressers

The ZDK organised a protest in Berlin to expand its calls for a fair reopening of dealerships in the country. The group highlighted that while a hairdresser, with a floor space of 10m2, is allowed to have one customer, car showrooms with a floor space of 500m2 cannot.

‘Nobody understands why many car dealerships with their large areas still have to remain closed, while 10 square meters per customer are seen as unproblematic for the hairdresser,’ said Karpinski. ’I do not know when the politicians who decide on the lockdown were last in a car dealership. It is urgent that they get an idea of ​​the situation on site.’

While the ZDK acknowledges that everything must be done to stop the spread of COVID-19 and its various mutations, it argues that the automotive retail industry is one of the safest due to the large open areas in dealerships and the relatively low footfall at any one time.

According to the Robert Koch Institute, the ZDK states that the whole retail sector hardly contributes more to the infection rate, coming 13th in a list of 17 infectious locations. 

‘It is therefore obvious that this risk is practically zero in our operations,’ says Karpinski. ’That is why we are calling for a resounding yes to the nationwide reopening of all car dealerships from the next Coronavirus summit.’

Physical sales

While the industry is maintaining its sales so far, the spring period is generally a busy one for the German automotive industry. The ZDK argues that 90% of sales are made physically and not online. According to results of a snap poll conducted among 2,000 car dealerships, incoming orders during January and February had plummeted by up to 60%.

There is, therefore, a concern that the ongoing closures and restrictions could lead to some smaller dealerships facing financial issues and possibly bankruptcy. ‘We cannot and must not wait until the bankruptcy wave rolls around, added Karpinski. ‘Politicians must show ways of action and must no longer shut our country down.’

However, the ZDK has offered a solution that may benefit car dealers and the country itself. By offering rapid testing and track-and-trace opportunities, showrooms could help to identify cases, reducing the overall spread of COVID-19.

Around Europe

In March 2020, during the first European lockdown, vehicle registrations saw massive drops, continuingfor the following two months. Since then, sales have recovered somewhat -Autovista Group forecasts that the big four markets together with the UK will see increases compared to last year, but not to 2019 levels.

In France, Paris and 15 other regions have reintroduced lockdowns to battle a new surge in COVID-19 cases, including the closure of non-essential retail for at least four weeks. However, dealerships can remain open, but only for customers who have booked an appointment.

The UK, which has seen a considerable decline in case numbers till now will not allow car showrooms to reopen until 12 April at the earliest. This means the industry will miss out on registrations in March, one of its most popular months, as new registration plates are introduced.

Motorcycle Press Release March 2021

Data published by the motorcycle industry association (MCIA) shows registrations declined by 37.7% in February.  All categories recorded a drop, with Sport/Tourers suffering the most significant fall at 63.9%. Naked and Supersports also recorded significant declines, both at 54.6%, whilst Adventure Sports dropped by 34%. Meanwhile, mopeds reduced the least at just 0.9%.

Paul McDonald, Leisure Vehicles Editor said, “With the country remaining in Lockdown-3 during February, it came as no surprise to see a similar decline to that in January”.

Data published by the motorcycle industry association (MCIA) shows registrations declined by 37.7% in February.  All categories recorded a drop, with Sport/Tourers suffering the most significant fall at 63.9%. Naked and Supersports also recorded significant declines, both at 54.6%, whilst Adventure Sports dropped by 34%. Meanwhile, mopeds reduced the least at just 0.9%.

Paul McDonald, Leisure Vehicles Editor said, “With the country remaining in Lockdown-3 during February, it came as no surprise to see a similar decline to that in January”.

Although registrations continue to suffer in March, April should experience recovery as dealers re-open across the UK, with the hope the market will bounce back.

Engine band highest registered models – February 2021

Power BandModel
0-50ccYadea C-LIKE
51-125ccLexmoto ENIGMA ZS 125 T-48
126-650ccSuzuki DL650 V-STROM
651-1000ccSuzuki GSX-S750 Z PHANTOM
Over 1000ccBMW R1250 GS ADVENTURE
Data courtesy of the MCIA

New motorcycle market

Feedback from dealers regarding February’s activity suggested retail remains challenging, with inconsistent sales volume blamed on the fact that consumers were unable to view stock in person.  However, some dealers have reported reasonable online enquiries and phone calls, with new models generating healthy levels of interest.

One of the main issues experienced by dealers is longer than normal lead times caused by production delays resulting from COVID-19, together with delayed deliveries due to Brexit related import disruption.

The market typically accelerates in March, so it will be another late start to the season. However, cautious optimism remains among dealers that momentum could surge due to pent up demand when lockdown ends. A broad range of models continue to be well received by consumers with the Honda SH125, BMW R1250 GS and new Aprilia RS660 widely praised.

Moving forward as dealerships begin to reopen, there are mixed opinions regarding the level of demand the industry can expect, with much depending on the economic picture. There could be more impulse motorcycle purchasing this year, with some consumers benefitting from having extra disposable income due to spending less throughout lockdown. However, there is some concern that a backlog of tests and longer waiting lists could discourage new riders.

What can the industry expect moving forward?

With lockdown roadmaps in place across the UK which allow non-essential retail, including showrooms to open their doors to the public in Scotland (appointment only) from 5th April, England and possibly Wales from the 12th, including click and collect for Northern Ireland, there is light at the end of the tunnel. 

Used motorcycle market

Recent feedback suggests that used retail activity was similar to new and challenging in February. Despite the challenges though, some dealers reported strong enquiry levels and are cautiously optimistic for a surge in momentum during April.

Potential stock shortages in the new motorcycle market could also boost demand for used machines, so despite uncertainty and challenges ahead, 2021 could still be a positive year.

Top selling models

As with recent months, demand remains consistent across the board, with Honda Africa Twins buoyant, Yamaha MT-10’s and Tracer 900s in strong demand and the Suzuki GSX-R750 popular. Mopeds and Scooters have seen less demand recently for commuting but remain a popular choice among food delivery companies.

Stock

Stock availability continues to be a challenge with fewer part exchanges and less trade to trade transactions.  Although some dealers are satisfied with their levels, the majority are understocked and are actively looking to purchase leading to strong auction activity.

Sales Activity

Following a cold second week of February with snow for some, the rest of the month was mild and fairly dry. At the time of writing, March’s weather has been benign, with fair riding conditions. Considering used stock availability is still difficult and dealers want healthy levels in preparation for the 5th and 12th of April, Glass’s have increased values across the board in the April edition, except where trade feedback or evidence from the market place indicated models required specific adjustments.

More effort needed to entice private buyers to EVs

More needs to be done to support the private uptake of electrically-chargeable vehicles (EVs) in the UK, according to the Society of Motor Manufacturers and Traders (SMMT). New figures show businesses are twice as likely to make the switch from petrol and diesel.

Analysis of new-car registrations in 2020 shows that just 4.6% of privately bought cars were battery-electric vehicles (BEVs), compared to 8.7% for businesses and large fleets. This equates to 34,324 private registrations and 73,881 corporate ones.

In response to this, the SMMT has unveiled a new blueprint to deliver a greater retail uptake. With the UK government planning to ban the sale of petrol and diesel vehicles by 2030, the body believes now is the time to change people’s attitudes towards EVs.

‘While last year’s bumper uptake of electric vehicles is to be welcomed, it is clear this has been an electric revolution primarily for fleets, not families,’ commented SMMT chief executive Mike Hawes. ‘Manufacturers are committed to the consumer, reducing costs and providing as wide a choice as possible of zero-emission capable vehicles with many more to come.

‘To deliver an electric revolution that is affordable, achievable and accessible to all by 2030, however, government and other stakeholders must put ordinary drivers at the heart of policy and planning.’

Increasing availability

According to the SMMT, as of March 2021, manufacturers have brought more than 150 BEV, plug-in hybrid (PHEV), hybrid and hydrogen fuel-cell electric vehicles (FCEVs) models to the UK market. BEVs and PHEVs alone account for 25% of all available car models.

However, current higher costs of components’  raw materials mean these vehicles are inherently more expensive to manufacture. This implies an EV will retail for more than its fossil fuel equivalents.

Manufacturers are working hard to bring the cost of production down. Yet, they are constrained by lower demand and battery production costs, which have yet to reach the economies of scale required. Batteries have the biggest overall impact, representing 30-45% of the total production cost the SMMT states. BEVs are not expected to reach purchase cost parity with their internal combustion engine (ICE) counterparts across all car segments in the next few years.

The area where EVs benefit their drivers is in terms of running costs. This is of particular interest to businesses. In addition, company car drivers currently receive stronger and longer-lasting motivation through reduced purchase-taxes and fiscal incentives compared to consumers.

Grants changing

Last week, the UK government announced it will reduce the plug-in car grant and lower the price threshold for eligibility. This effectively adds £500 (€583) to the purchase price of all qualifying EVs under £35,000, and £3,000 to the price of those above £35,000.

By comparison, private buyers in Germany receive a €9,000 grant towards a new BEV, while Dutch drivers do not pay VAT on BEV purchases, equivalent to a purchase cost saving of around a sixth.

The SMMT estimates that maintaining the grant and similarly exempting consumer EV purchases from VAT would increase uptake by almost two-thirds by 2026 compared to current predictions.

Charging locations

The blueprint also calls for more to be done to expand the UK’s EV infrastructure. Private-buyer acceptance remains low because of affordability concerns, charge point availability and infrastructure reliability, according to the SMMT. Around one in three households have no dedicated off-street parking, leaving them disproportionately dependent on public-charging points.

The SMMT’s projections suggest that most drivers will choose to charge their vehicle at home if they can. Therefore, they estimate there would need to be around 2.7 million public-charge points in service by 2030 to provide adequate coverage and tackle range anxiety. The SMMT believes there are around 40,000 charging points in the country, most of which are in London.

This means more than 700 new charge points would have to be installed every day until the end of the decade. By comparison, the current installation rate is approximately 42 a day, according to information provided to the SMMT from charge-point mapping service ZapMap. Funding this expansion is estimated to cost around £17.6 billion.

‘We need incentives that tempt consumers, infrastructure that is robust and charging points that provide reassurance, so that zero-emission mobility will be possible for everyone, regardless of income or location,’ stated Hawes. ‘When every market is vying for these new technologies, a clear and collaborative strategy engaging all would ensure the UK remains an attractive place both to manufacture and market electric vehicles, helping us achieve our net-zero ambition.’

Making the CASE for advanced commercial vehicles

Advanced automotive systems including connected cars, autonomous driving, shared vehicles, and electromobility (CASE), are experiencing exponential development as OEMs undergo digitalisation. While many of these technologies might be associated with high-end luxury passenger cars, manufacturers are also exploring commercial vehicle applications.

Toyota Motor Corporation (Toyota) recently announced it would combine its CASE technologies with the commercial vehicle foundations cultivated by Isuzu Motors (Isuzu) and Hino Motors (Hino) as part of a new collaborative effort. Meanwhile, Renault’s light commercial vehicle (LCV) offering is undergoing its own energy transition, emphasising electric and hydrogen drivetrains for its upcoming models.

A commercial CASE

Through their new partnership, Toyota, Isuzu and Hino hope to accelerate the adoption and implementation of CASE technologies. As well as addressing various difficulties facing the transport industry, the three companies hope their collaboration will help the progression towards a carbon-neutral society.

In a press conference, the manufacturers explained small commercial-purpose trucks would be used to help develop battery electric vehicles (BEVs), electric platforms, and fuel-cell electric vehicles (FCEVs). Given the expensive developmental costs of BEVs and FCEVs, this collective approach makes sense. Toyota, Isuzu and Hino are also planning to advance the implementation of infrastructure. This will include introducing FCEV trucks to hydrogen-based society demonstrations in Japan’s Fukushima Prefecture.

The partnership will also look to accelerate the development of autonomous and other advanced systems. By building a connected technology platform for commercial vehicles, they hope to provide logistical solutions to improve transport efficiency as well as reducing CO2 emissions.

‘CASE technologies can only contribute to society once they become widespread,’ the companies explained. ‘Commercial vehicles can play important roles in dissemination, as they travel long distances for extended periods of time to support the economy and society and can be easily linked with infrastructure development. And from the standpoint of carbon neutrality, commercial vehicles can especially fulfil a key function.’

Forming new ties

To promote the partnership, the manufacturers will form a new business called Commercial Japan Partnership Technologies Corporation. This new company will be focused on mapping out CASE technologies and services for commercial vehicles. Moving forward, the collaboration will not only deepen, but open up to other like-minded partners.

Isuzu and Toyota have also agreed on a capital partnership to advance their collaborative efforts. Through a cancelation of treasury stock through a third-party allotment, Toyota is scheduled to acquire 39 million shares of its common stock worth a total of ¥42.8 billion (€332 million).

This will leave Toyota with 4.6% ownership of Isuzu in terms of total issued shares as of the end of September 2020 and a post-allotment voting rights ratio at Isuzu of 5.02%. Isuzu also plans to acquire Toyota shares of the same value through a market purchase.

Renault’s zero-emission solutions

Meanwhile, Renault is renewing and expanding its LCV range, with new versions of the Kangoo, the Express, the Trafic Combi and the SpaceClass. The manufacturer is also developing its Renault Pro+ services, offering turnkey digital and connectivity solutions.

Through this work Renault is looking to support the transmission to zero-emissions. The new Kangoo Van E-TECH Electric is expected by the end of 2021, picking up where the Kangoo ZE left off. It will be equipped with a 44kWh battery, offering a range of 265km. The OEM also offers fleet charging solutions with its subsidiary, Elexent. 

Before the end of the year, Renault will unveil the Master ZE Hydrogen, an alternative to the diesel Master. With its hydrogen partner Plug Power, the manufacturer is looking to capture 30% of the European hydrogen LCV market by 2030.

Smart zero-emission vans promise greater development of green and connected technology for the wider automotive sector. Commercial vehicles spend their lives on the road, meaning any new drivetrain and technology must be well-designed and long-lasting. This know-how can then be utilised by the passenger-car segment, as these systems are stress-tested.

However, these technologies must first be adopted. As demonstrated by the European Automobile Manufacturer Association’s (ACEA’s) latest figures, diesel still reigned supreme last year in the new-LCV segment. Accounting for 92.4% of the van market, the fuel type was leagues ahead of electrically-chargeable vehicles (EVs) which garnered a 2% share. In reality, the adoption of these new drive trains will likely be mandated by zero-emissions policies created at national and international levels.

French government decrees car showrooms can open by appointment

The French government has clarified that car showrooms can remain open to the public, but only by appointment. This follows the introduction of regional lockdowns late last week. There was considerable uncertainty about the operational status of car dealers under these latest regional restrictions, which suggested they would have to close their showrooms.

On 19 March, the understanding was that car dealerships would again be included under the non-essential retail umbrella and would be subject to the same operational constraints as during the nationwide lockdown in November.

The regional lockdown impact sparked alarm for dealers and was deemed to be unacceptable ‘after the experience of the first two lockdowns,’ said Xavier Horent, general director of the French automotive trade association, CNPA, on 20 March as the new restrictions came into effect.

Bowing to pressure?

Officials may have bowed to domestic pressure to allow some form of trading for dealers, or they may have been influenced by the conditional reopening of car showrooms in Germany and Italy. ‘Fortunately, the Government has chosen to publish a decree and includes the departments of Pas-de-Calais and Alpes Maritimes, as recommended by the CNPA, thus avoiding probable territorial inconsistencies,’ said Horent.

The restrictions in France came only five days after regional restrictions were introduced in Italy. Regions with more than 250 cases per 100,000 population over a seven-day period were classified as red zones. In these areas, non-essential retail has been closed since 15 March and will not reopen until 6 April. However, car dealers are considered essential retail and may remain open, by appointment.

According to the CNPA statement, the regions affected by the latest restrictions account for about a third of new-car registrations and vehicles in use in France. The change enabling dealers to open their showrooms, albeit only by appointment, will undoubtedly have come as a relief.

Pent-up demand, following the closure of dealers in France for most of November, is no longer supporting the market. Registrations of new cars in the country contracted by 14.2% in the first two months of 2021 compared to the same period in 2020.

Car showrooms close again as France imposes regional restrictions

Paris and fifteen other regions in France have reintroduced lockdowns to battle a new surge in COVID-19 cases, including the closure of non-essential retail for at least four weeks. The measures were announced by prime minister Jean Castex on Thursday (18 March) and come into effect at midnight on Friday (19 March). They apply in regions where the case rates exceed or are approaching 400 per 100,000 inhabitants.

At the time of writing, car dealerships are included under the non-essential retail umbrella and will be subject to the same restrictions as in the nationwide lockdown in November.

‘Right now, this is not clear yet, as the French government did not specify yet what is considered as being essential. We all think that, as it was in November, showrooms will remain closed with only the possibility to do click-and-collect after a car is ordered online. After-sales departments would remain open,’ commented Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux.

This is a blow for the new-car market in France, where pent-up demand, following the closure of dealers in France for most of November, is no longer supporting the market. Registrations contracted by 14.2% in the first two months of 2021 compared to the same period in 2020.

Essential or not?

The French government has not yet published official information further to the prime minister’s announcement that businesses selling essential goods and services can remain open, as in March and November last year. This has prompted debate as to whether car showrooms should be considered as non-essential retail.

However, French website linternaute has published a list of businesses that can remain open and as far as dealerships are concerned, only service departments are specified. As bookshops, hairdressers and record stores are on the list, this prompted industry publication AutoActu to ask whether ‘car showrooms, in which it is possible to operate in complete safety, will be authorised in this third lockdown like record stores and bookstores will be?’

Open for business in Italy

The restrictions in France come only five days after regional restrictions were introduced in Italy. Regions with more than 250 cases per 100,000 population over a seven-day period are classified as red zones. In these areas, non-essential retail has been closed since 15 March and will not reopen until 6 April. The rest of the country’s regions, except Sardinia, are classified as orange zones, where shops may remain open.

However, car dealers are considered essential retail and may remain open. ‘They require an appointment – although this does not seem to be mandatory – but you can go and do all the normal things,’ commented Marco Pasquetti, Autovista Group forecast and data specialist, Italy.

In a dedicated FAQ page on the Italian government website, there is even a specific question about whether consumers can go to dealers for ‘maintenance, to buy a car, leave an old car for scrapping, take a test drive, etc.?’

The official response is: ‘Yes, they are authorised to be open because they are considered essential and the goods/services they sell are necessary.’

This approach in Italy may add fuel to the push for the French government to allow car showrooms to remain open too.

UK to cut EV grants and reduce price eligibility

The UK Government is lowering the plug-in vehicle grant offered to consumers buying an electrically-chargeable vehicle (EV). It is also imposing a list-price limit, reducing the number of models eligible for the new incentive amount.

From 18 March, only vehicles priced below £35,000 (€40,906) will qualify In addition, the total amount consumers can claim towards the cost is reduced by £500, to £2,500. The government claims that implementing this lower grant and the price cap can spread the funds available across a larger number of EV sales over a longer period.

The move has been met with disappointment by the country’s automotive industry. With dealerships closed until at least the middle of April due to COVID-19 lockdowns, vehicle sales in the UK have suffered. The government is also pushing forward with plans to ban the sale of internal-combustion engine (ICE) models by 2030. Cutting grants now could hamper both a sales recovery and the adoption of an emerging market.

‘With a stretching 2030 target in place to phase out sales of new petrol and diesel cars and vans, we must avoid sending mixed messages to consumers and businesses. Switching to an electric vehicle still has many barriers, including high upfront costs and availability of reliable charging points,’ commented Matthew Fell, chief UK policy director at the Confederation of British Industry (CBI).

‘The decision to slash the plug-in car grant and the van and truck grant is the wrong move at the wrong time,’ added Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT). ‘New battery-electric technology is more expensive than conventional engines, and incentives are essential in making these vehicles affordable to the customer.’

Increasing choice of vehicles

The government states the number of EV models priced under £35,000 has increased by almost 50% since 2019 and that half the models currently on the market will still be eligible for the reduced grant.

According to the government’s website, a total of 36 cars qualify for the new grant. Most of these are in the small and compact-car segments. In its statement, the Department for Transport (DfT) singled out the Hyundai Kona 39kWh and MG ZS EV as examples of ‘family cars’ that are still available with the new £2,500 incentive. However, both these models, and other small SUVs on the list, have a range of around 160 miles. They are not as suitable for long-distance driving.

Those who need to travel long distances are, therefore, being priced out of receiving a grant. The government believes that these models ‘are typically bought by drivers who can afford to switch without a subsidy from taxpayers.’

Reducing emissions

The plug-in vehicle grant scheme was renewed last year, with £582 million of funding available until 2022-2023. It also cut the amount offered to consumers from £5,000 to £3,000 while also introducing a price ceiling of £50,000.

‘Measures to encourage people to switch to electric vehicles are working, with nearly 11% of new cars sold in 2020 having a plug,’ the government states. ‘This was up from just over 3% in 2019 – and battery-electric car sales almost tripled over that same period.’

‘We want as many people as possible to be able to make the switch to electric vehicles as we look to reduce our carbon emissions, strive towards our net-zero ambitions and level up right across the UK,’ commented transport minister Rachel Maclean.

‘The increasing choice of new vehicles, growing demand from customers and rapidly rising number of charge points mean that, while the level of funding remains as high as ever, given soaring demand, we are refocusing our vehicle grants on the more affordable zero-emission vehicles, where most consumers will be looking and where taxpayers’ money will make more of a difference.’

The wrong move

The announcement comes at a time when a vehicle-sales recovery is required following three-and-a-half months of lockdown. The industry is also attempting to transition away from ICE technology. The news of the grants cut has, therefore, been met with disappointment.

Ford’s upcoming Mustang Mach-E, is its first foray into the mass-produced battery-electric vehicle (BEV) market. The model will be priced around £40,000 in the UK, making it ineligible for the government grant. As the country’s market leader, Ford will have hoped for a strong sales performance of its new model. However, with no incentive to purchase, sales may be impacted.

‘Today’s news from the UK Government that plug-in grants for passenger and commercial vehicle customers are being reduced is disappointing and is not conducive to supporting the zero-emissions future we all desire,’ commented Graham Hoare, Ford of Britain chairman.

‘Robust incentives – both purchase and usage incentives – that are consistent over time are essential if we are to encourage consumers to adopt new technologies, not just for all electrics but other technologies too like plug-in hybrids (PHEVs) that pave the way to a zero-emissions future.’

The move could also impact shipments of EVs to the UK when the industry is finding its feet again following Brexit upheaval. Manufacturers could concentrate their production for countries where sales are likely to increase, especially with higher government support.

‘Cutting the grant and eligibility moves the UK even further behind other markets, markets which are increasing their support, making it yet more difficult for the UK to get sufficient supply,’ commented Hawes. ‘This sends the wrong message to the consumer, especially private customers, and to an industry challenged to meet the government’s ambition to be a world leader in the transition to zero-emission mobility.’ 

Mini to go ‘EV-only’ as BMW increases focus on electric

BMW is increasing its focus on new-technology powertrains. The carmaker aims to grow deliveries of battery-electric vehicles (BEVs) by 50% annually while also developing hydrogen and eFuel options.

Additionally, BMW has stated that Mini will introduce its last internal combustion engine (ICE) model in 2025. It plans for the marque to become a full-electric offering by 2030. Mini joins the growing list of manufacturers pledging to focus on battery technology. However, like similar multi-brand businesses Volkswagen (VW) Group and Jaguar Land Rover (JLR), BMW Group is keeping its options open when it comes to other zero-carbon propulsion technologies.

During the company’s annual financial performance conference, BMW chairman Oliver Zipse stated that 2023 is a crucial year for the German carmaker in terms of e-mobility. By this time, it plans to have 13 BEV models on the roads, with 90% of the market segments it serves to feature a BEV option.

‘Positioning our BEVs in the high-volume segments will enable us to ramp up quickly and achieve swift market penetration,’ commented Zipse. ‘To this end, we have empowered our structures in recent years. Others focus on individual market segments and niches. We, on the other hand, are taking a targeted approach across all market segments.’

BMW plans for BEV penetration in segments from the compact car to ultra-luxury models. The carmaker could also pull ICE models out of specific segments if it helps to meet various regulations, such as CO2-emission targets and Euro 7 standards. The company is keen, however, to keep an optimal balance between product offerings and profitability.

‘I want to make it quite clear: if demand in certain markets shifts entirely to fully-electric vehicles within the next few years – we will be able to deliver,’ added Zipse.

Increasing EV share

By the end of 2025, BMW states it will have delivered around two million BEV units to customers. The carmaker wants to grow its share of sales appropriated to BEVs in the coming years, aiming for 50% of vehicles sold to be battery electric by 2030.

The carmaker has not committed to going fully electric itself but is following the models set by other automotive groups in designating a brand to focus solely on the technology. Daimler is using Smart, JLR is pitching Jaguar as electric only, while Volkswagen has Bentley going down this route.

By adopting this strategy, carmakers can still appeal to the millions of customers who are not sure about electrically-chargeable vehicles (EVs) while exploring the market with a dedicated electric brand. It also means they can explore other zero-carbon technologies, keeping their options open should one prove better than the other.

For BMW, using the Mini brand as a focus for BEV-only sales is a good move. The marque sold just over 211,000 units in 2019 (the last year of non-COVID impacted sales), a fifth of total group sales. Most of its products sit in the small-car segments, which are likely to be used for local journeys and short-range trips. BMW can leverage interest from the brand to sell-up to premium vehicles when the time is right.

‘Mini is perfect for the city and e-mobility,’ added Zipse. ‘We will be releasing the last model with a combustion-engine variant in 2025. By the early 2030s, Mini will be exclusively fully electric.’

BMW also stated that it would be launching some Rolls Royce models using battery-electric technology in the coming years.

Hydrogen and eFuel

BMW is one of the carmakers committed to exploring hydrogen fuel-cell vehicles (FCEVs), with a model scheduled for launch in 2022. The carmaker remains open to exploring other avenues of propulsion as well.

‘As an industry, we will only be able to meet current and future mobility needs with an open-technology approach for all drivetrain forms,’ said Zipse. ‘This includes eFuels as well as hydrogen, which will be an alternative worldwide.

‘Next year, we will be releasing a small series of the BMW i Hydrogen NEXT. We could also imagine it as a production vehicle. That is why we are supporting the creation of the necessary infrastructure here in Germany.’

New-class sustainability

As part of its growth, BMW has set itself three phases to move through. It is currently in phase two and aims to enter the third and final phase in 2025. At this time, the company will launch a ‘new class’ of vehicle development focused on sustainability.

Alongside the increase in BEV sales, the group has set itself clear decarbonisation targets up to 2030. This is across the entire lifecycle of its products, including supply chain, production and end-of-life. In every aspect of theits activities, carbon emissions per vehicle are to be reduced by at least one third compared to 2019.

At the same time, the BMW Group is also cutting back on its use of critical raw materials. It has reduced the cobalt amount in the cathode material for the current fifth-generation battery cells to less than 10% and increased the amount of secondary nickel it uses by up to 50%.