Fuel Type: batterieelektrisch-bev

Surging demand for new BEVs mounts pressure on residual values

Residual values (RVs) of battery-electric vehicles (BEVs) in the big five European markets are lower than they were at the onset of the COVID-19 pandemic, in both value and retention (RV%) terms, except in the UK. Senior data journalist Neil King explores the latest developments and the challenges for used BEVs.

Registrations of BEVs in the European new-car market, comprising the EU and the UK, grew by 126.5% compared to 2019, to almost 650,000 units. However, the surge in demand for new BEVs is not reflected in Europe’s used-car markets. Consequently, their RVs after 36 months and 60,000 kilometres were weaker in January 2021 than when COVID-19 took hold in March 2020, except for modest growth in the UK.

‘New BEV sales have risen sharply to company-car users over the past 12 months, fuelled by the attractive benefit-in-kind tax rates. With few current incentives available for used buyers. However, there is concern that when these cars come to the end of their contracts, supply may outstrip demand, negatively impacting residual values,’ explained Jonathan Brown, car editor at Glass’s in the UK.

Residual-value development of BEVs, big five European markets, March 2020 to January 2021

RV development of BEVs graph, big five European markets, March 2020 to January 2021

Source: Autovista Group, Residual Value Intelligence

These developments are in stark contrast to activity across the whole market. In 2020, new-car registrations in the EU and the UK suffered an overall decline of more than 3.7 million registrations due to COVID-19, equating to a loss of a quarter of the volume. Buoyed by resilient used-car demand, RVs of all cars in the 36-month/60,000km scenario in the big five European markets had returned to pre-COVID-19 levels by mid-November 2020.

Oversupply risks

With price pressure on used BEVs already mounting, this amplifies the question; Who will buy Europe’s used-electric cars? Through a combination of government incentives, improved infrastructure, extended ranges, more choice, and the fear of CO2-emissions fines, forecasts point to electrically-chargeable vehicles gaining a market share of around 40% in Europe by 2030, 80% of them being BEVs. For BEVs alone, that creates a €92 billion remarketing challenge, which needs to be addressed.

Unless demand for BEVs gathers pace in Europe’s used-car markets, RVs will continue to suffer and there is a risk of oversupply to EV-import markets too. As yet, there are currently no signs of saturation on these markets, and the demand for BEVs in Norway, for example, is expected to grow by 13% annually over the next five years, according to Rødboka (part of Autovista Group) in Norway. However, this may no longer be sufficient to resolve the RV conundrum created by the government incentives for EVs across Europe.

‘Continuing the current government policy will continuously add pressure to the used EV market as volumes are still pushed. The ability of Norway, for example, to absorb German EVs has a very limited impact on the upcoming local problems, though it ‘helped’ in the past. The entire Norwegian new-car market is about 150,000 vehicles a year, so let’s assume they take 100,000 used cars up to four years of age per annum. Germany alone ‘produced’ 230,000 used EVs in 2020, with different future ages, depending on whether they were fleet or tactical registrations. Thinking optimistically of 60% being absorbed locally, how many of the remaining 90,000 used cars should Norway import to solve our volume problem? And registrations of new EVs are still growing,’ cautioned Andreas Geilenbrügge, head of valuations and insights at Schwacke.

Diverging values

RVs of BEVs are below those of petrol cars in all the big five European markets, except Italy. Even here, however, the gap has narrowed to BEVs only having a 0.7 percentage point (pp) advantage over petrol cars, compared to 4.6 pp in March 2020. Furthermore, the new purchase incentives for BEVs, introduced by the Italian government on 1 January 2021, will reduce their used prices and this minor advantage is therefore expected to turn negative imminently.

RV% development of petrol cars and BEVs, Italy, March 2020 to January 2021

RV% development of petrol cars and BEVs graph, Italy, March 2020 to January 2021

Source: Autovista Group, Residual Value Intelligence

In the other major European markets, the RV disadvantage of BEVs compared to petrol cars has widened since March 2020. The greatest divergence has occurred in Germany, where the gap has widened by just under 4 pp and stood at 10 pp in January 2021.

The divergence accelerated notably following the introduction of enhanced incentives on 1 July 2020, supporting the assumption of a forthcoming negative impact on values of BEVs in Italy. The federally-backed buyer incentive scheme doubled to €6,000 for BEVs costing less than €40,000, such as the Volkswagen ID.3. When paired with the manufacturer bonus of €3,000, customers are able to save €9,000. BEVs with a net price between €40,000 and €65,000, like the Audi e-Tron Sportback, are eligible for €5,000 in government subsidies, alongside a €2,500 OEM bonus.

‘COVID forced the German government to support the ‘suffering’ automotive industry. And as it wasn’t popular to drive internal-combustion engine (ICE) sales, they decided to make a push on BEVs and plug-in hybrids (PHEVs), but not standard hybrids (HEVs), by doubling the incentives. But the lack of used-EV support puts double pressure on RVs by lowering transaction prices of new EVs with the incentive, while not incentivising used examples,’ Geilenbrügge emphasised.

RV% development of petrol cars and BEVs, Germany, March 2020 to January 2021

RV% development of petrol cars and BEVs graph, Germany, March 2020 to January 2021

Source: Autovista Group, Residual Value Intelligence

The biggest gap in RVs between BEVs and petrol cars remains in France. The difference in January 2021 stood at 18.6 pp, although this is only slightly wider than the 17.9 pp gap in March 2020. On a positive note, this sizeable gap in France should at least stabilise following the introduction of a €1,000 incentive for used BEVs on 1 January.

‘Despite the introduction of the bonus on the used-car market, sales of used BEVs remain low. France is still lacking charging points and 25% of them are out of order, which is not supporting the development of the used-car market. The only impact of the bonus, from my point of view, would be to stabilise RVs a bit more,’ commented Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux.

RV% development of petrol cars and BEVs, France, March 2020 to January 2021

RV% development of petrol cars and BEVs graph, France, March 2020 to January 2021

Source: Autovista Group, Residual Value Intelligence

All governments should look into providing incentives to encourage used-BEV ownership, but these do not need to be straightforward purchase incentives. Lower energy costs for charging BEVs and visible expansion of the charging network would also be powerful signals.

Autovista Group is hosting an online seminar on the remarketing risk of electric vehicles on 23 February – join here.

Automotive relief at Brexit deal

Following a year of unprecedented difficulties, the European Union and the UK reached an agreement on Christmas Eve for a Brexit deal.

‘It was a long and winding road. But we have got a good deal to show for it,’ said European Commission president Ursula von der Leyen. ‘It is fair and balanced. And it is the right and responsible thing to do for both sides.’

Confirming the long-awaited agreement, UK Prime Minister Boris Johnson estimated the free-trade deal to be worth approximately £660 billion (€735 billion). He described it as a ‘comprehensive Canada-style free-trade deal,’ which means UK goods can be sold without tariffs and quotas in the EU.

As the UK now no longer follows the EU’s rules on production standards, checks on goods have been introduced. This, in turn, creates more paperwork and red tape, which may result in delays if goods arrive at ports unprepared. However, the deal does include a 12-month grace period on some elements of the ‘rules of origin’ declarations, which require exporters to certify goods qualify as locally sourced, allowing them to avoid tariffs. Businesses will have a year to obtain supporting documents form third-party suppliers, giving some companies more time to adapt.

But how has this last minute, 1,246-page Christmas present been received by the automotive sector?

The automotive reaction

The European Automobile Manufacturers’ Association (ACEA) welcomed the deal and the relief it brought as the sector avoids the harsh consequences of a no-deal Brexit. ACEA director-general Eric-Mark Huitema explained that no other industry is more closely integrated than the European automotive sector, which depends upon complex supply chains that stretch across the region.

‘The impact of a no-deal Brexit on the EU auto industry would have been simply devastating, so we are first and foremost extremely relieved that an agreement was reached before the transition period expired,’ Huitema said. ‘Nonetheless, major challenges still lie ahead, as trade in goods will be heavily impacted by barriers to trade in the form of new customs procedures that will be introduced on 1 January 2021.’

ACEA pointed out that compared to when the UK was aligned with the EU, the deal struck by negotiators has introduced much more red tape and regulatory burden. According to ACEA, before Brexit, almost 3 million vehicles worth €54 billion were traded annually between the EU and the UK, and cross-Channel trade in automotive parts accounted for nearly €14 billion.

Phase-in period

In the UK, the Society of Motor Manufacturers and Traders (SMMT) also welcomed news of the agreement as a platform for a future relationship between the EU and UK. It also identified the need for a ‘phase-in period,’ which it stated would be critical to help business on both sides adapt.

‘The tariff-free, quota-free trade industry has called for has been secured in principle. However, the six-year phase-in period and special provisions for electrified vehicles and batteries now make it imperative that the UK secures at pace investment in battery gigafactories and electrified supply chains to create the world-leading battery production infrastructure to maintain our international competitiveness,’ said Mike Hawes, SMMT chief executive.

The SMMT went on to call for the immediate ratification and implementation of the agreement. Members of Parliament in the UK did go on to vote overwhelmingly to back the deal, with the House of Lords also passing the bill off for Royal Assent.

The EU has also identified the need to get the agreement ratified as a matter of ‘special urgency,’ even though it was unable to do so before the UK left the single market. Given the late hour, the Commission proposed to apply the details on a provisional basis for a limited time period until 28 February 2021. The deal was also given unanimous backing by ambassadors from the 27 nations, with written approval from member states.

Now the UK can look to future partnerships with countries like Turkey, with which it recently signed a deal for preferential trading terms. New relationships like these will be essential as the country’s partnership with the EU trading bloc becomes more complex, and it navigates the terms of the deal.

‘Further ahead, we must pursue the wider trade opportunities that Brexit is supposed to deliver while accelerating the UK’s transition to electrified-vehicle manufacturing. With the deal in place, government must double down on its commitment to a green industrial revolution, create an investment climate that delivers battery-gigafactory capacity in the UK, supports supply-chain transition and maintains free-flowing trade – all essential to the UK Automotive sector’s future success,’ said Hawes.

Launch Report: Citroën C4 – a crossover pioneer

With the new C4, Citroën has mixed a crossover with a hatchback to deliver a C-segment car with DNA from both camps. It has more of a hatchback silhouette than an SUV, but it still offers high ground clearance and an elevated seating position, as well as an airy internal feel due to the raised roofline.

The new Citroën is equipped with progressive hydraulic shock absorbers, comfortable seats, 18-inch wheels, a digital cockpit, and offers good space between the two seat rows. It also has more than 20 advanced driver-assistance systems (ADAS), a head-up display and a 10-inch central console. Citroën has removed the need to use the touchscreen to access the climate controls, with a row of controls in the lower central dashboard.

The C4 is available with petrol and diesel engines, as well as a fully-electric version, the e-C4, on PSA’s modular, ‘multi-energy’ CMP platform. It is one of the hatchback/crossover pioneers in the C-segment and is offered at a reasonable price point, especially with the good level of equipment. However, some manufacturers are launching similar offerings in the coming months, increasing competition for the model.

Click here or on the image below to read Autovista Group’s benchmarking of the Citroën C4 in France, Germany, Spain and the UK. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Launch report Citroen C4 November 2020

Mercedes-Benz goes on the electric offensive

Mercedes-Benz has announced where its upcoming battery-electric vehicles (BEVs) will be produced, as it goes on an electric offensive. Built in its factories in Germany, the US, and China, these new BEVs will be assembled alongside vehicles powered by internal combustion engines (ICE).

Mercedes-Benz revealed a total of eight EQ BEVs will be in production across seven of its locations by 2022. Spanning three continents, this production map will be essential for the carmaker to achieve its goal of electrically-chargeable vehicles (EVs) making up half of its sales by 2030. The electrification of the manufacturer’s entire product range is a key component of the ‘Ambition 2039’ strategy and a prerequisite on the way to CO2 neutrality.

‘With its ‘Electric First’ strategy, Mercedes-Benz is consistently on the path to CO2 neutrality and is investing heavily in transformation,’ said Markus Schäfer, member of the board of management responsible for Daimler Group Research and COO Mercedes-Benz cars. ‘Our vehicle portfolio becomes electric and thus also our global production network with vehicle and battery factories. We intend to lead in the field of e-mobility and focus in particular on battery technology. We are taking a comprehensive approach, ranging from research and development to production, and also including strategic cooperation.’

Global production

The first Mercedes-Benz electric luxury sedan, the EQS, will launch from Factory 56 in Sindelfingen in the first half of 2021. The electric EQA C-SUV will also be made at the Beijing plant in China next year, after initially entering production at the Rastatt plant in Germany this year. It is a similar story for the EQE, which will be built in the Bremen site in Germany and Beijing in China from next year. Meanwhile, the EQB compact will be built at the Kecskemét plant in Hungary in 2021. The EQS und EQE SUVs will be manufactured in Alabama, US, starting from 2022. The EQC business sedan is already built in Bremen and Beijing.

Battery systems will also be produced and assembled in Germany, Poland, Beijing and Alabama. ‘The local production of batteries is an essential success factor in our electric offensive,’ said Jörg Burzer, member of the board of management for production and supply chain. He explained that the carmaker already produces batteries in Kamenz, Bangkok and Beijing, with a network that is well-positioned for the EQ offensive. ‘The ramp-up of our battery plants in Hedelfingen and Jawor is imminent and our colleagues in Brühl and Tuscaloosa are already preparing to start production in 2022.’

‘The Mercedes-Benz production network is global, digital and flexible, and ready for the upcoming electric offensive – thanks, of course, to our highly qualified and motivated employees worldwide. We are now beginning a real Mercedes-EQ fireworks display,’ said Burzer.

‘Six electric product launches by 2022 underscore the strength and competence of our Mercedes-Benz production sites worldwide. The production network will have a total of six Mercedes-EQ car locations. Local production of highly efficient battery systems plays a central role in the Mercedes-Benz strategy – coupled with a comprehensive sustainability concept that spans the entire life cycle of the battery all the way to recycling,’ he concluded.

Making the battery market more sustainable

The European Commission wants to enforce mandatory requirements on all batteries entering the EU market, which includes applications within the automotive sector, alongside industrial and portable-uses cases.

This could include using responsibly-sourced materials with constrained use of hazardous substances, including a minimum amount of recycled materials, as well as carbon footprint, performance and durability. The Commission argues this would help develop a more sustainable and competitive battery industry across Europe and the wider world.

These requirements come as part of plans that will modernise EU legislation on batteries, focusing on greater sustainability throughout their lifecycle. They also address social, economic, and environmental issues tied to all types of batteries.

The changes complement the Circular Economy Action Plan, a core building block of the European Green Deal. The Commission argues these roadmaps promote competitive sustainability while enabling green transport, clean energy and the attainment of climate neutrality by 2050.

Sustainable and safe

The proposals set out the need for batteries placed on the EU market to become sustainable, high-performing and safe throughout their whole lifecycle. This singles out batteries produced with the lowest level of environmental impact, using materials sourced in full respect of human rights, following social and ecological standards. Under these proposals, at the end of their life cycle, these units should be repurposed, remanufactured or recycled, allowing valuable materials to re-enter the economy.

In addition, providing legal certainty would help unlock large-scale investment and boost the production capacity for innovation and sustainability, to help Europe respond to a fast-growing battery market. ‘Better and more performant batteries will make a key contribution to the electrification of road transport, which will significantly reduce its emissions, increase the uptake of electric vehicles and facilitate a higher share of renewable sources in the EU energy mix,’ the Commission argues.

‘Clean energy is the key to European Green Deal, but our increasing reliance on batteries in, for example, transport should not harm the environment,’ said Frans Timmermans, executive vice-president for the European Green Deal. ‘The new batteries regulation will help reduce the environmental and social impact of all batteries throughout their life cycle. Today’s proposal allows the EU to scale up the use and production of batteries in a safe, circular and healthy way.’

Collection and recycling

With its proposal, the Commission also aims to boost the circular economy of batteries, promoting the more efficient use of resources, and aiming to reduce the environmental impact. From July 2024, only electrically-chargeable vehicles (EV) with a carbon footprint declaration can enter the market.

To improve the collection and recycling of portable batteries, the 45% collection rate should increase to 65% in 2025, and 70% in 2030. Units from the automotive sector meanwhile have to be collected in full. This enables the recovery of valuable materials like cobalt, lithium, nickel and lead.

The use of new technology, like the battery passport and interlinked-data space, will help enable safe data sharing, increase market transparency, and make large batteries traceable throughout their life cycle.

‘This future-oriented legislative toolbox will upgrade the sustainability of batteries in each phase of their lifecycle,’ said commissioner for environment, oceans and fisheries Virginijus Sinkevičius. ‘Batteries are full of valuable materials and we want to ensure that no battery is lost to waste. The sustainability of batteries has to grow hand in hand with their increasing numbers on the EU market.’

UK registrations stall in November as second lockdown takes effect

UK new-car registrations fell by 27.4% year-on-year in November, as a second lockdown came into effect, closing dealerships and hampering sales. New data from the Society of Motor Manufacturers and Traders (SMMT) reveals that 42,840 fewer cars joined British roads, resulting in a £1.3 billion (€1.4 billion) revenue hit for the market.

In total, the UK saw 113,781 new-car registrations last month, taking trade back to levels not seen since the 2008 recession. Private demand fell by 32.2%, while registrations by large fleets dropped by 22.1%. While this most recent decline demonstrates the continued impact of COVID-19, the drop was less severe than the one in the UK’s first lockdown which began in March, where registrations fell by 97.3% in April alone.

Fuel type divergence

Positive trends did continue for alternative-fuel cars, with battery-electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) increasing their number of registrations, up 122.4% and 76.9% respectively. BEVs enjoyed their third-highest ever monthly market share at 9.1%, with PHEVs also building their share up to 6.8%.

Nearly 37% of the market was held by low-emission fuel types in November, resulting in a year-on-year change of 74.1%. This resulted in a combined total of 18,000 new zero-emission capable cars joining the UK’s roads during the month. Meanwhile, petrol continued to hold on to its market majority at 49.1%, with a year-on-year registrations drop of 41.9%, from 96,166 in November 2019 to 55,855 in the same period this year. Diesel sales fell by 56.2% to 15,925 in November 2020 from 36,329 units in the same period last year, holding on to 14% of the market.

SMMT Graphic

Source: SMMT

Protective measures in place

November’s partial triumph is the result of manufacturers being better prepared to deal with the pandemic, having already put in place protective measures during the first wave of COVID-19 and the resulting lockdowns, such as click and collect ordering systems with little to no human contact.

‘Given the huge contribution that COVID-19-secure showrooms make to the economy and a national recovery, reopening dealerships across most of the UK will help protect jobs in retail and manufacturing and should help stimulate spending,’ the SMMT said.

So far, the automotive sector has been stripped of 663,761 units this year, down 30.7%. This means that some 31,000 cars would need to be registered every working day in December if the market was to climb back to the level expected at the beginning of 2020.

UK new-car registrations, January 2018 to December 2020 (forecast from December 2020)

UK new-car registrations, January 2018 to December 2020 graph

Source: SMMT and Autovista Group

‘Compared with the spring lockdown, manufacturers, dealers and consumers were all better prepared to adjust to constrained trading conditions,’ said Mike Hawes, SMMT chief executive. ‘But with £1.3 billion worth of new car revenue lost in November alone, the importance of showroom trading to the UK economy is evident and we must ensure they remain open in any future COVID-19 restrictions. More positively, with a vaccine now approved, the business and consumer confidence on which this sector depends can only improve, giving the industry more optimism for the turn of the year.’

Now with less than a month to go until the UK leaves the EU, talks over a trade deal look to be reaching a pinnacle moment. In the event of no free-trade agreement between the UK and EU tariffs of 10% could be added to imports and exports. Carmakers have already cautioned their inability to absorb this additional cost, meaning they could tag it onto the price of new cars imported into the country, which will only come to hurt the sector further.

New-car registrations deteriorate across Europe in November

Autovista Group senior data journalist Neil King considers the ongoing downward trend in new-car registrations in France, Italy and Spain in November.

Despite government-backed incentives in France, Italy and Spain, new-car registrations suffered significantly again in November, according to data released by the respective automotive trade associations. As countries battle the second wave of coronavirus (COVID-19) cases, restrictions and/or economic repercussions are impacting registration volumes, albeit inflicting far less damage than in March to May.

Following the lifting of lockdowns earlier in the year, the countries’ automotive markets had shown signs of recovery, but, all three suffered a continuation of the downward trend that commenced in September. The 18.7% contraction in Spain was a subtle improvement on the 21.0% year-on-year decline in October, but this was only because of the extra working day in November 2020 compared to November 2019.

New-car registrations, France, Italy and Spain, year-on-year percentage change, January to November 2020

Autovista Group senior data journalist

New-car registrations graph, France, Italy and Spain, y-o-y percentage change, January to November 2020


New-car registrations were 27.0% lower in France in November 2020 than in the same month of 2019, even with one extra working day, according to the latest data released by the CCFA, the French automotive industry association. This is the largest year-on-year decline in a month since May, but compared to the dramatic falls in March and April, ‘the re-confinement had decidedly different consequences for the car market,’ commented the CCFA in a flash statement.

‘All the dealers were closed in France in November. They were only allowed to deliver cars that had already been ordered before the second lockdown. They have reopened since 28 November,’ clarified Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux. As dealers could still honour deliveries of orders, this explains why the downturn in France was far less significant in November than during the first lockdown.

In the first 11 months of 2020, new-car registrations in France were 26.9% lower than in the same period in 2019. With dealers open again, December will invariably be a healthier month for the automotive sector, but new-car registrations will still be about 25% lower in 2020 than in 2019.

Less lockdown, more crisis in Spain

In Spain, 75,708 new cars were registered during November, 18.7% fewer than in November 2019, according to ANFAC, the Spanish vehicle manufacturers’ association. ‘The red numbers remain in all segments and vehicle-sales channels in November 2020, and therefore in the cumulative figures. The second wave of the pandemic, and the associated serious economic and social crisis, is deepening the decline in sales in all markets,’ ANFAC commented.

The MOVES II and RENOVE incentive schemes were introduced in July and the new-car market saw a 1.1% increase that month. Since then, however, the year-on-year results have deteriorated, with the November fall only improving slightly on October because of the extra working day in the month.

Ana Azofra, valuations and insights manager at Autovista Group in Spain, explained that ‘the lockdown had many different scenarios, depending on the region and city, but was less restrictive than during the first wave and dealers – at least most of them – remain open. However, the RENOVE incentives for internal combustion engines (ICE) are exhausted and, moreover, the crisis is already affecting private consumption. The unemployment rate already increased in Spain and now stands at 16.5%, maintaining the negative trend.’

Measures to deal with the second wave of COVID-19 infections and the economic repercussions of the crisis are clearly weakening consumer demand. Furthermore, the calculation of the registration tax based on WLTP emissions figures, from January 2021, will further complicate the recovery.

‘Half of the vehicles sold in 2021 will see their taxation increased at the time of purchase due to the entry into operation of the European WLTP regulation. This average price increase of 5% will mean, in such a bad environment for vehicle sales, a worsening of the sector’s situation, making it even more difficult to get out of the crisis. We need the registration tax increase to be corrected before January 1 so that the [automotive] industry and the sector can be the driver of the Spanish economy that they have always been and will be,’ the three associations, ANFAC, Faconauto and Ganvam, declared in the ANFAC release.

Second consecutive monthly decline in Italy

In Italy, the year-on-year downturn in November reported by the industry association ANFIA was 8.3%, although the result would have been worse (down about 12%) had there not been the extra working day. This is the second consecutive month that the country is back in negative territory following the 9.5% growth in new-car registrations in September due to the new government incentives that came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). While the market still contracted in that month, demand improved but delivery times delayed many registrations until September.

As in Spain, there was not ‘a full lockdown in Italy like the one we experienced in March and car dealers were – and still are – open. However, depending on the zones, there is a ‘light’ lockdown, with different restrictions that put pressure on sales as a result. Furthermore, the incentive scheme for vehicles with the highest range of CO2 emissions has been exhausted,’ commented Marco Pasquetti, forecast and data specialist of Autovista Group in Italy.

‘Without a new intervention to support the car market, the new drop in sales leaves companies with the need to reactivate layoffs, which, in any case, will not be sufficient to stem the loss of turnover today, compared to 2019, at an average value of -25%. The data on the use of the redundancy fund in the period January to October 2020, compared to the same period in 2019, show an increase of 6,000%. These are striking data that induce reflection on the cost of failure to support the car,’ highlighted Adolfo De Stefani Cosentino, president of FEDERAUTO, in the ANFIA release.

The key to the recovery of new-car markets revolves around countries agreeing on budgets for 2021, and improving economic certainty and consumer confidence to boost spending. However, with COVID-19 not yet under control, and further lockdowns possible, the industry faces a difficult end to 2020 and a challenging 2021.

VW ID.3 offers TCO and equipment advantage over Golf VIII in Germany

Christoph Ruhland, Autovista Group’s European sales director, has produced analysis that reveals that the Volkswagen ID.3 has a lower total cost of ownership (TCO) and better standard equipment than the Golf VIII.

Volkswagen (VW) commenced order intake for the new ID.3 battery-electric vehicle (BEV) in Germany on 24 November. At face value, VW’s first dedicated BEV model has a higher TCO than the latest generation of the Golf, largely due to the higher acquisition costs of the ID.3 as its list price (about €35,000) is significantly higher than the 1.5-litre petrol Golf VIII.

Depreciation is the largest single factor in calculating acquisition costs and Autovista Group has benchmarked the prices and forecast residual values of both the ID.3 and Golf VIII against key competitors. Acquisition costs also include taxes and finance.

TCO and acquisition costs, VW Golf VIII versus ID.3

TCO and acquisitions

Source: Autovista Group, Car Cost Expert

The higher acquisition costs of the ID.3 are partly compensated by the BEV’s reduced utilisation costs, due to lower spending on fuel, service, wear and insurance. As with all BEVs, service costs are lower than for cars with internal combustion engines due to the lack of oil, and components such as oil filters and spark plugs. In fact, the ID.3 only requires replacement of the brake fluid and pollen filter at regular service intervals.

Service costs, VW Golf VIII versus ID.3

Service costs VW Golf VIII versus ID.3 table

Source: Autovista Group, Car Cost Expert

However, crucially, BEVs in Germany are subsidised with generous purchase incentives. The grant for BEVs costing less than €40,000 previously amounted to €6,000, split equally between the government and the carmaker. Since 1 July, the government has doubled its incentive (from €3,000 to €6,000) and in combination with the additional €3,000 contribution from VW, the acquisition costs of the ID.3 are about €1,400 lower than for the petrol Golf. In combination with the lower utilisation costs, the incentive-adjusted TCO of the ID.3 is about €4,300 less than the petrol Golf.

This aligns with Autovista Group analysis of C-segment models, published in June, which uncovered that BEVs are only TCO-competitive in European markets because of government incentives. In Germany, the additional €3,000 government subsidy since 1 July gives the ID.3 a significant TCO advantage over the Golf VIII.

Discounting and equipment analysis

However, customers may be able to negotiate a healthy discount on the Golf VIII, which OEMs are unlikely to offer on BEVs in addition to their €3,000 incentive contribution. For example, a 20% discount on the petrol Golf would give it a TCO advantage of approximately €2,150 over the ID.3. Nevertheless, a 5% discount on the ID.3, in addition to the €9,000 BEV incentive, would be sufficient to make its TCO competitive with a 20%-discounted Golf.

Furthermore, it must be noted that the ID.3 has 204 horsepower and is therefore more powerful than the 150-horsepower 1.5-litre petrol Golf. The ID.3 also has better standard equipment, which Autovista Group has calculated to be worth about €1,800.

Equipment costs, VW Golf VIII versus ID.3

Equipment costs, VW Golf VIII versus ID.3 table

Source: Autovista Group, Car Cost Expert

When this is factored into the TCO calculation, the ID.3, even without discounting, narrowly beats a Golf with a 20% discount. If the ID.3 gains a 5% discount, the TCO advantage would amount to €2.400.

This would leave enough change for ID.3 buyers to invest in a home charger for the ID.3, which costs about €2,000 in Germany, including installation. Chargers are also entitled to a government incentive in Germany, about €900, and so EV-friendly families could even buy and install two units with the cost saving. Maybe one for themselves to overcome charging anxiety and one as an extra source of income?

Click here to view Autovista Group’s TCO dashboard for C-segment models, published before incentives were increased in Germany in July, and here for the TCO dashboard for B-segment models, published in September.

Autovista Group’s latest TCO dashboard considers D-SUV BEVs, revealing that they struggle to compete with petrol and plug-in hybrid D-SUV models without being eligible for government incentives.

Tesla self-driving update teased as suspension probe begins

Tesla CEO Elon Musk has revealed wider ‘Full Self-Driving’ Beta software could be released within roughly two weeks. Targeted testing of the package began in October, with early users able to make autonomous turns on city streets, all linked through the car’s navigation and autopilot features.

However, this announcement was made as the US National Highway Traffic Safety Administration (NHTSA) opened up a new probe into roughly 115,000 Tesla vehicles. The investigation will focus on a safety issue with the front suspension of the Model S (2015-2017) and the Model X (2016-2017).

Self-driving software

Taking to Twitter at the end of last week (27 November), Musk confirmed the expansion of new self-driving features for Tesla vehicles within a fortnight. ‘Probably going to a wider beta in two weeks,’ he told a user enquiring as to whether the latest software would be available in Minnesota.

In October, the so-called ‘Full Self-Driving’ Beta software was initially offered to a select number of ‘expert, careful’ drivers. Delivering an almost feature-complete self-driving package, users are required to constantly monitor the system as is made apparent in the release notes.

‘Full Self-Driving is in early limited-access Beta and must be used with additional caution. It may do the wrong thing at the worst time, so you must always keep your hands on the wheel and pay extra attention to the road. Do not become complacent.’

Tesla outlined that when enabled, the new software would allow the user’s vehicle to ‘make lane changes off highway, select forks to follow your navigation route, navigate around other vehicles and objects, and make left and right turns.’

Musk had previously said the latest upgrade wold be widely released by the end of 2020. The system looks to become more robust and capable as it gathers additional data to feed its neural networks, improving with each new user. With the majority of this testing appearing to focus on the US market, and given the current legislative quagmire surrounding autonomous capabilities in Europe, uncertainty remains around when Tesla owners elsewhere in the world might experience this new system.

Suspension investigation

This announcement also fell under the shadow of a new probe opened up by the NHTSA, affecting an estimated 114,761 vehicles. The agency began the preliminary investigation after receiving 43 complaints alleging failure of the left or right front-suspension links. In a NHTSA document, the issue was linked to malfunction of the knuckle ball-joint ring in the Model S (2015-2017) and Model X (2016-2017), which could result in contact between the tyre and wheel liner.

Of the 43 complaints received by the agency, 32 involved failures occurring during low-speed parking manoeuvres (below 16kph), and 11 while driving (above 16kph), including four at highway speeds. ‘The complaints appear to indicate an increasing trend, with 34 complaints received in the last two years and three of the incidents at highway speeds reported within the last three months,’ the document detailed.

Tesla was approached for a statement, but did not respond to the request prior to the publication of this article. As this investigation continues in the US, Tesla owners in Europe will again have to wait and see how they are impacted.

Will car sharing get a post-COVID second wind?

The sharing economy and car sharing are sociologically attractive concepts. We seek to live more sustainably, and digitally-enabled business models have increased accessibility to sharing solutions. On the other hand, car sharing (and ride hailing) have failed to reduce road congestion or the number of cars in operation. They share another joint challenge: they struggle to become profitable and have been crushed through the pandemic. Dr. Christof Engelskirchen, Autovista Group chief economist, shares his perspective.

The sharing economy is driven by a desire to connect with a community, to declutter, to increase flexibility and to live more sustainably. It is often facilitated by community-based online platforms. Car sharing is a logical extension of the sharing economy and has grown in popularity over the past 10 years.  We differentiate between three types:

  1. Free-floating car sharing, where cars park on public roads within a geo-fenced area. This service exists almost exclusively in larger cities. Smaller cities (<500,000 inhabitants) do not attract free-floating car-sharing services due to expected low utilisation rates. Pre-booking is not possible;
  2. Stationary car sharing, where drivers pick up cars and return them to dedicated locations. Pre-booking is usually required. Peer-to-peer car sharing (e.g. via Zipcar or Turo) falls under this category as well; and
  3. Ride hailing. This can be peer-to-peer based or professional-service ride-hailing (e.g. Uber or Lyft). The difference to the traditional taxi ride is that it is fully online-enabled and cheaper. Depending on the supplier and business model, pre-booking is possible. In peer-to-peer-based business models (e.g. Blablacar), pre-booking is usually required.

Rise, hype, disillusionment

Shared mobility saw a rise and was hyped years ago, but was confronted with challenges even before Covid-19 put another temporary obstacle in the way. These are the known challenges for free-floating and stationary car sharing:

  • Low utilisation rates – particularly problematic in free-floating car sharing as more cars are required than in a stationary setup to allow for flexible access. Drivers use free-floating car sharing for shorter trips, which brings utilisation down;
  • High costs for parking – particularly challenging in free-floating car sharing, as these cars park on public roads or in publicly-accessible parking garages;
  • High costs related to mistreatments, service and cleaning. Higher-frequency driver changes add to the challenge. Cars need to be regularly cleaned, often daily or on an ad hoc basis;
  • Additional costs for relocating cars. Cars need to be regularly re-distributed within the network as clusters form, e.g. at airports in the morning. This requires a human being to pick cars up from remote locations and put them back into those areas that would attract most drivers to the car. This is a daily logistical challenge for free-floating car sharing but affects stationary car sharing as well;
  • Cars depreciate more and faster in a shared-driver setup. Remarketing results are substantially lower and refurbishment costs are higher;
  • Competing micromobility solutions, such as e-scooters and shared bikes, represent another challenge to the profitability of car-sharing services. Renting a Smart in Frankfurt or an e-scooter costs approximately the same: around €0.20 per minute;
  • Car sharing is challenged in two more important use cases: safety regarding transport of (small) children and in terms of cost when running multi-stop trips; and
  • Bigger cities have no particular interest in offering preferential conditions for car sharing as they learn that this service does not help manage city car parking.

Rising numbers of cars in cities

There have been plenty of seemingly contradictory views on the effects of car sharing on new-car sales, congestion and substitution. The contradictions stem from non-representative samples, methodological flaws and a non-comprehensive analysis of the topic. For example, researchers forget to simulate the faster replacement cycles of cars in shared fleets or conduct surveys amongst car-sharing customers. Lobby groups are the driving force behind many studies. This does not help to demystify the topic. Autovista Group research found that the net effect on new-car sales of car sharing is positive, i.e. the shorter holding cycles overcompensate the loss of private new-car purchases.

We see this confirmed when looking at cities in Germany where free-floating and stationary car sharing is most prominently accessible. Figure 1 shows that the car-park size has increased between 8-12% between 2012 and 2020. There has been exponential growth in car-sharing units but they still only contribute 0.05% to the cars in operation in Germany.

Figure 1: Size of B2B car-sharing park vs. total passenger car park in selected German cities

CE article - B2B parc

Ride hailing increases congestion

Ride-hailing businesses are struggling with profitability. There are concerns about the sustainability of the business model as long as cars need a driver. A scientific study from 2019, which analyses the role of ride-hailing companies on traffic congestion in San Francisco, concluded that ride hailing increases congestion. There is some substitution between ride hailing and other road trips, but most road trips add new cars to the road. Ride-hailing vehicles stopping at the curb to pick up or drop off passengers have a notable disruptive effect on traffic flow, especially on major arterials. This was evident at the CES in Las Vegas in 2019: the city lacks a solid public-transport infrastructure and if you choose to take an Uber or Lyft, signs direct you to pick-up and drop-off areas at the major resorts. Downtown, no curb pick-ups and drop-offs are permitted.

Unmet promise

Car sharing has failed to deliver against the promise of contributing to lowering the traffic problems in big cities. It does not reduce the number of vehicles. It takes up parking space. It cannibalises public transport and cities will not give preferential treatment to these services unless they see a positive benefit. Stationary car sharing is less affected by these challenges but is also far less flexible for users. Many free-floating car-sharing services have been taken off the market because of profitability challenges, not only because of the lack of economies of scale.

Even Daimler and BMW, which combined their Car2Go and DriveNow services into ShareNow, have withdrawn from major cities and countries (e.g. Florence, London, Milan, Brussels and North America). Free-floating car sharing will likely continue to be part of multi-modal mobility solutions in the future, but there will be no or only very few additional cities added to the portfolio in the short term due to the challenges around profitability. Free-floating car sharing will not be a disruptive force to inner-city mobility. It will be a niche play, if it can be operated profitably.

The outlook

Stationary car sharing will continue to complement multi-modal mobility. With the current trend towards flexible work arrangements, suburban areas regain attractiveness. Stationary car-sharing services may add further value for those areas. Peer-to-peer offers have grown through the pandemic as people continue to avoid public transport. Retail locations, or car dealers, may find a niche to offer such services. Rental companies could also enter the market with shorter-term, more flexible arrangements.

Peer-to-peer ride hailing will continue to operate successfully in a niche. Professional-service ride hailing (e.g. Uber, Lyft) will continue to face profitability challenges. Ride hailing in its current form adds price pressure on the backs of drivers that are often self-employed.

In the medium term, professional-service ride hailing could benefit from autonomous driving Level 4, as this will replace the driver. Within the next five to 10 years, it may be suitable for very specific high-utilisation cases as the technology is very expensive. It will not be used in mixed-traffic situations any time soon, due to safety and liability concerns. An example could be autonomous ride hailing to bring people from a Park’n’Ride area to an out-of-city access point for existing public-transport infrastructure. Cities that rely on a highly-utilised public-transport infrastructure will not allow Waymo and other operators to take up and load off passengers at inner-city access and switchover points for public transport. The reason is that cities need to scale and increase utilisation of public transport and to manage car traffic.

TCO Dashboard: D-SUV BEVs uncompetitive because of incentive ineligibility

In the third of a new series that considers total cost of ownership (TCO), Autovista Group has created a dashboard comparing the retail prices (including taxes) and TCO of leading D-SUV battery-electric vehicles (BEVs) in France, Germany, Spain and the UK. Senior data journalist Neil King discusses the findings.

Autovista Group’s TCO analysis reveals that D-SUV BEVs will struggle to compete with petrol and plug-in hybrid D-SUV models in France, Spain and the UK as their list prices exceed the price ceiling to be eligible for government incentives. Even in Germany, the TCO of fully-electric D-SUV models is only on a par with petrol models because of the €7,500 incentive. However, the plug-in hybrid (PHEV) BMW X3 has a lower TCO than comparable fully-electric and petrol models, despite only being entitled to a €5,625 subsidy.

TCO Dashboard - D-SUV segment

Incentive ineligibility

The price positioning (including taxes) of the D-SUV BEVs under review, (Audi e-Tron, Jaguar I-Pace and Mercedes-Benz EQC) is around €70,000 in continental Europe (£65,000 in the UK), This exceeds the price caps of €60,000 in France, €45,000 in Spain and £50,000 in the UK.

Without the aid of subsidies, the D-SUV BEVs are at least €6,000 more expensive than our reference plug-in hybrid model, the BMW X3 PHEV, and €17,000 costlier than the 2.0-litre petrol BMW X3 in France. In Spain, the price premium over the X3 PHEV for the cheapest D-SUV BEV under review, the Mercedes-Benz EQC, is over €17,000 and the Mercedes BEV costs about €28,000 more than the petrol X3. Price differences are similar in the UK too when converting the British Pound to Euro at current exchange rates. In Germany, the subsidy helps to close the pricing gap but the BEVs still cost at least €6,000 and €11,000 more than the X3 PHEV and the petrol X3 respectively.

Full-size electric SUVs can therefore only compete on price against petrol and plug-in hybrid rivals if attractive list price positioning is combined with healthy government support. List prices and/or price ceilings for incentives therefore need to be lower, and the incentives higher for these models to gain momentum.


Pricing data is provided in the local currency for the same five models in each market, including retail list prices (including taxes), incentives, discounts, and a final adjusted retail price. The TCO is calculated as the sum of total acquisition costs and total utilisation costs. Acquisition costs cover depreciation, financing and acquisition taxes. Total utilisation costs consist of servicing, fuel, wear, tyres, insurance, and utilisation taxes.

These standard TCO results do not factor in discounts that buyers may negotiate on petrol competitors such as the BMW X3. For this reason, TCO calculations are also provided with discounts of 10% and 20% applied to the 2.0-litre, 184-hp petrol BMW X3 in this analysis.

Emissions implications

The upshot is that there is not a compelling argument for consumers to switch to electric full-size SUVs across Europe. Even in Germany, consumers are likely to favour petrol power as the BEVs do not offer a sufficiently attractive TCO advantage. PHEVs may fare better but the cost savings come with the inconvenience of charging and if the battery is not recharged, which is common among PHEV owners, the savings would of course be eroded.

This is a concern as SUVs continue to gain in popularity and, in turn, are driving up vehicle emissions. Whereas B-segment and C-segment BEVs offer competitive TCO, albeit only because of incentives, there is an argument that this is more important for SUVs as governments and carmakers alike seek to reduce pollution levels. Higher incentives across Europe, along with lower prices and incentive ceilings, would also provide a much-needed boost as the automotive sector contends with the fallout from the coronavirus (COVID-19) pandemic.

Click here or on the screenshot above to view the pricing and TCO dashboard for the D-SUV segment models under review in France, Germany, Spain and the UK.

Click here for the TCO dashboard for C-segment models, and here for the TCO dashboard for B-segment models.

Making waves with EV infrastructure reform

A new clean-energy strategy aimed at upgrading buildings was recently published by the European Commission. As the automotive industry gears up for a new era of electromobility, the renovation wave has the potential to transform the legislation around electrically-chargeable vehicle (EV) infrastructure. Autovista Group Daily Brief journalist Tom Geggus spoke with ChargePoint to find out more.

Christelle Verstrae - ChargePoint

‘We were extremely pleased with the announcement of the renovation wave for a very simple reason, because it touches upon private buildings,’ said Christelle Verstraeten, ChargePoint’s EU Policy Lead. At an EU wide level, everything related to publicly-accessible charging infrastructure falls under the alternative-fuels infrastructure directive (AFID), which is undergoing evaluation with a revision proposal due next year, she explained. This makes sense given that the directive was first adopted in 2014, making it somewhat dated when considering the advance of EV technology and demand. 

‘But if you talk about every charger that needs to be put in a private parking space, either at home or even possibly a private workspace, this is not AFID, it is the energy performance of buildings directive (EPBD), which is part of this renovation wave,’ Verstraeten said. As private locations are central to EV recharging, calls for greater development of this directive were made: ‘we needed a higher ambition from the EU to deploy charging stations in that space.’

Currently, under article 8 of the EPBD, EU member states are required to ensure new buildings and those undergoing renovation have ‘ducting infrastructure’ installed. More specifically, this means; ‘conduits for electric cables, for every parking space to enable the installation, at a later stage, of recharging points for electric vehicles,’ when a specific set of criteria is met.

So, there was a sense of relief when the European Commission confirmed the EPBD would be swept up in the renovation wave. ‘It is a good thing and it will be very complementary with the alternative-fuels infrastructure directive, because it is going to be private and public at the same time.’ Ensuring EVs are supported by a fully-functioning charging network will require pushing for advances on both the private and public front.

For EU member states, these directives like the EPBD act as baseline targets, which they can build upon and even exceed. Verstraeten explained that in France, the obligation to upgrade infrastructure was extended to existing buildings. Meanwhile, with its relatively high rate of EVs and contrastingly low number of garages, Amsterdam adopted a more tailored approach to installation. EV owners can ask for a charging station to be installed in the street if they are unable to charge at work or at home.

ChargeUp Europe

However, it appears current directives have resulted in fragmented approaches to infrastructure across Europe. ChargeUp, a new EV-charging industry alliance formed this year, wrote a letter to the European Commission stressing the need for a harmonised approach to the emerging market.

‘To date, we have noted that the existing AFID directive has been poorly implemented in parts of the EU and that its legal basis has led to ineffective enforcement,’ ChargeUp’s letter reads. ‘This has resulted in varying and inadequate EV-charging coverage, diverging national market approaches, different technology specifications and local technical requirements.’

The alliance pointed to fragmentation in metering requirements, mechanical-shutter specifications and concessions for charging along main traffic routes. This market confusion then becomes a barrier to investment, while lowering the potential of pan-European connectivity.

Infographic AFID

Source: ChargeUp

ChargeUp also pointed out that while the EPBD is a step in the right direction for EV charging, it is likely to have very limited outcomes due to its current exemptions. As part of the renovation wave, the group recommended revising infrastructure ambitions within the directive. ‘Increased cabling and ducting requirements need to come with increased ambition for the installation of charging points for the whole building stock, which also provides parking spaces,’ ChargeUp explained.

The legislative puzzle

Verstraeten explained that upcoming reviews will have to bring together all the different legislative puzzle pieces, like the AFID and EPBD, to form a full picture of how infrastructure can operate in harmony across Europe. Directives can set clearly defined standards and expectations, allowing providers like ChargePoint to get a better understanding of the market and where it is heading.

‘For us, if we have a clear target, it is actually easier to understand how the market is going to evolve and provide more security and certainty,’ Verstraeten said. This confidence will also extend to the consumer, where a greater understanding of the incoming infrastructure will provide a level of certainty and confidence, increasing the likelihood of EV adoption.

But because these directives do only act as targets, it still falls to individual member states to come up with goals to reach and agendas to implement. Verstraeten points out that, even then, there are still questions that cannot simply be answered by creating requirements at the EU level.

‘It is not only about having the obligation to put a charger in your garage if you live in a multi-family building,’ she said. ‘It is also about who is going to pay for that connection, and how the decision-making happens between the different owners of the buildings.’ While more granular issues like these will continue to cause ripples, it is only with a strong legislative foundation that Europe can hope to build EV infrastructure worthy of the electromobility tidal wave.

To find out how the electricity industry thinks the renovation wave will change EV charging, read Tom Geggus’ interview with the electricity industry association, Eurelectric.

EU new-car registrations declined 7.8% in October

Autovista Group senior data journalist Neil King explores the latest figures released by the European Automobile Manufacturers’ Association (ACEA) as second-wave lockdowns bring more downturns.

New-car registrations in the EU declined 7.8% year-on-year in October.  Volumes fell from 1,034,669 units to 953,615. This marks a return to the market contractions suffered every month in 2020, except for the modest growth in September. The decline is an improvement on the dramatic double-digit declines suffered in March to June, and again in August, but does not bode well as the region contends with a second wave of coronavirus (COVID-19) cases and lockdowns.

EU new-car registrations, year-on-year % change, January to October 2020 and year-to-date (YTD)

EU new car regs

Source: ACEA

All EU new-car markets contracted last month – apart from Ireland and Romania, which enjoyed year-on-year growth of 5.4% and 17.6% respectively. This renewed EU-wide downturn was to be expected given the year-on-year declines already reported in France, Italy, Spain, and even Germany in October.

Single-digit declines were reported in France, Germany and Italy, although the decline in Italy was just 0.2% and the result would have been positive (up by about 4%) had there not been one less working day. This follows the 9.5% growth in new-car registrations in September, due to the new government incentives that came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). While the market still contracted in that month, demand improved but delivery times delayed many registrations until September and October.

On a less positive note, there was a double-digit decline of new-car registrations in Spain in October. The MOVES II and RENOVE schemes were introduced in July, and the new-car market saw a 1.1% increase in the month. Since then, however, there have been respective monthly declines of 10.1% and 13.5% in August and September, and now 21.0% in October. It is therefore clear that weak underlying consumer demand is the problem in the country. Measures to deal with the second wave of COVID-19 infections, and the calculation of the registration tax based on WLTP emissions figures from January 2021, are further complicating the recovery.

New-car registrations, year-on-year % change, October 2020 and year-to-date (YTD) 2020

New-car registrations, year-on-year % change, October 2020 and year-to-date graph

Source: ACEA

In the smaller EU member states, year-on-year contractions of more than 20% were reported in seven markets, including Finland, Slovakia and Slovenia. However, some markets were far more resilient, with downturns of less than 5% reported in Austria and Hungary.

Lockdown negativity replaces pent-up positivity

In the first 10 months of 2020, registrations of new cars in the EU fell by 26.8%. Even the market downturn in October continued the improvement in the year-to-date contractions, which bottomed out at 41.5% in the first five months of the year. The greatest loss among the major EU markets was in Spain, which has contracted by 36.8% in the year-to-date, ahead of only Croatia (down 43.5%) and Portugal (down 37.1%).

As the positive contribution of pent-up demand is ultimately exhausted, the second wave of COVID-19 infections, the severity, duration and geographic spread of lockdowns, and the economic fallout of COVID-19, will define how new-car markets perform in the remainder of 2020 and beyond. The key to recovery revolves around countries agreeing budgets for 2021, and improving economic certainty and consumer confidence to boost spending. The allocation of aid resources provided by the European Recovery Fund, agreed on 21 July, will also play a pivotal role in shaping the forward outlook for Europe’s new-car markets.

Manufacturer performance

Among the leading European carmakers, the BWW Group, Ford, Mazda, Mitsubishi and Nissan all registered more than 10% fewer new cars in the EU in October 2020 than in October 2019. Mazda suffered the greatest loss, with EU registrations down 38.0% year-on-year.

Fiat Chrysler Automobiles (FCA) and the Renault Group, however, managed to register 3.9% and 0.2% more cars respectively in the EU than in October 2019. All other major manufacturers suffered single-digit declines of between 6.2% (Honda) and 9.7% (Jaguar Land Rover) in the month.

Across Europe, manufacturers with a strong electric-vehicle portfolio are expected to perform better than those without as electrically-chargeable vehicle (EV) consumers are less likely to be tempted by used cars instead of new. This is because they tend to be less price-sensitive buyers, but there is also limited availability of the latest electric models on the used-car market. In the year-to-date, Toyota is the best-performing manufacturer in the EU, albeit with registrations down 16.9%, supporting this hypothesis.

In a new video, Autovista Group Daily Brief editor Phil Curry talks through the latest registration figures in the big four EU markets and the UK.

Will the automotive industry surf the renovation wave?

The European Commission published a new clean-energy strategy in October, aimed specifically at upgrading buildings. But the automotive industry has its part to play in the strategy. Will it surf this renovation wave, or will it be left adrift? To find out, Autovista Group Daily Brief journalist Tom Geggus, spoke with electricity industry association, Eurelectric.

Henning Hader
Henning Hader – Eurelectric

The renovation wave is a very necessary and a very timely initiative from the European Commission to tackle what is basically one of the largest remaining challenges in decarbonising the European economy, and that is buildings,’ explained Henning Hader, policy director at Eurelectric.

However, the wave is not focused solely on how efficiently a building uses energy, during heating or cooling for example. This process is just as much about future-proofing buildings for developments in smart technology, integration into digital infrastructure, and most importantly for the automotive industry, connection to advanced charging points.

Automotive application

‘The automotive sector is impacted across the entire value chain with this transformation,’ Hader emphasised. ‘They are being put under pressure, and rightly so, to come with products that are decarbonised, that enable people to switch to clean-energy carriers, using cars.’ This includes zero- and low-emission vehicles with electrified powertrains, i.e. battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs).

In order to fully commit to decarbonisation, there must be enough demand for electrically-rechargeable vehicles (EVs). In the wake of coronavirus (COVID-19), governments are pushing incentive schemes to help the automotive industry make a green recovery, but these vehicles require charging and cannot exist in an infrastructure vacuum.

‘We know that cars are parked for 90 to 95% of their life, and 90% of that time they are parked at home or at work, in buildings, around buildings, under buildings, on top of buildings,’ said Hader. ‘So, what is important, is that chargers on private property, do not just appear out of nowhere. They have to be purchased and installed by the people who operate these buildings.’

This is where the renovation wave sweeps in, helping develop regulations, shaping what an updated structure should look like. Therefore, owners and operators of buildings need to be familiar with the opportunities this presents and even, ideally, be incentivised to anticipate this, allowing them to equip essential infrastructure.

The issue of availability

‘One of the biggest issues is the availability of charging points. We have lots of promising announcements about how the number of charging points is increasing, but most of those are public charging points,’ Hader stressed. The opportunity to install EV infrastructure has to be taken during a building’s renovation, even if the actual recharging system is not installed straight away. If the policy exists, all private and public properties would all be equipped for an upgrade, removing the potential for expensive retroactive installations.

‘These chargers enable us and our system operators, specifically distribution system operators, to take on all these cars that are charging in different areas, and when they are on smart chargers, they can become a flexibility source of the future,’ Hader explained.

This will be vital as cars adapt charging schedules, and even, under the right circumstances, feed into the grid. ‘There is an entire world of flexibility and efficiency that opens up if we make sure that renovating a building is about more than just insulation,’ he said. ‘It really is about getting the buildings to become a building block in the future energy system, where the buildings, the cars on those buildings and the people in these buildings, become very important flexibility providers.’ But, in order for this to happen, some current policies will require renovation.

Renewable energy directive

At its core, the EU’s renewable energy directive (RED) acts as a foundational policy for the production and promotion of energy from renewable sources. ‘There are elements in the renewable energy directive that are very relevant for electrification, and for electricity being used in transport, for example,’ Hader said. But, as part of the European Green Deal, this legislation, alongside the energy efficiency directive, is under review. Renewable-energy targets will be assessed, as well as other parts of the directive to fall in line with the Climate Target Plan for 2030. The results of the review and any accompanying proposals are expected in June 2021.

‘In order for the power sector to supply enough clean electricity to electrify the sectors that should be electrified, so, economically speaking, large parts of personalised passenger transport, heating to a large extent, some industrial processes, we will need to have a lot more capacity, specifically, of course, renewable capacity, because we want to fully decarbonise our sector’ he explained.

Therefore, RED will need to accelerate capacity rollout, particularly as it plays a fundamental role in helping build investor confidence in renewables. ‘In order to meet the new ambitious targets for 2030, and to decarbonise the power sector and to electrify large parts of society at the same time, we need more, we simply need more’ Hader said. Eurelectric’s Power Barometer reflects the developments the power sector is undergoing, as well as the challenges which lie ahead.


Source: Eurelectric

Knowledge is key

So, what barriers stand in the way of an automotive renovation wave? A chief issue to overcome is making sure both building owners and industry experts are aware of the new technological possibilities. This means supplying information across the renovation chain.

Proprietors need to be aware of the infrastructure potential, the experts offering advice to them must understand what technological and funding opportunities exist, and those carrying out the renovation work must have the practical skills to set up the technology. In this way, all necessary regulations can be adhered to, incentives taken advantage of, and infrastructure either installed or the framework set up for it.

This approach could help combat the rollout of soon-to-be-obsolete charging systems, only installed to meet immediate demand, but without any foresight of future smart-charging systems that are capable of cross-grid communication. But why is this type of connection important when it comes to EV infrastructure?

‘Let’s say you’re in a suburb of Brussels, and there is a system constraint because a lot of demand is coming online at the same time, and there is a need for flexibility so the operator can interact and communicate with these chargers,’ Hader explained. This could allow the grid operator to switch the role of the chargers and instead feed into the grid for a few minutes, with the consent of the EV owner.

But, the future of these systems depends upon the renovations that are carried out now. Even if they only consist of some basic piping, which could one day support smart, flexible and advanced EV charging technology.

Explaining October’s registration figures

In October, none of the big five European markets achieved a positive increase in registrations. With markets entering various states of lockdown to ease a second wave of coronavirus (COVID-19) infections in November, the picture for the rest of 2020 could become murkier still. Autovista Group Daily Brief editor Phil Curry guides you through the figures in the latest registrations round up.

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel. There you will find videos on a range of subjects including autonomous vehiclesnew-car registrationssafety systems, and electrification.