Alix Index: The E-Car Giant Europe Awakens - CO2 Limits as Drivers

CO2 Limits in the EU as Drivers, Not Brakes

From his perspective, additional momentum and purchase incentives in the European market were primarily driven by government subsidies and the strict CO2 limits set by the EU. Currently, due to high demand, there are even significant delivery bottlenecks for new cars. The study authors consider the figures from the last quarter of 2020 as indicative of the development for the entire year. After a slight corona-related drop in the E-index at the beginning of the year, the value in Q3/2020 was already above that of the same quarter in the previous year. Compared to the fourth quarter of 2019, the electric range had doubled by the end of 2020 to 385.7 million kilometers. Sales figures for electric vehicles in Q4/2020 stood at around 1,358,600 units – more than double that of the previous year.

European Countries Leading in Electric Range

Due to China’s significant lead in recent years, the Middle Kingdom remains by far the market with the largest electric range (183 million kilometers), followed by the USA with 48 million kilometers. However, Germany (38 million) and the UK (19 million) in particular are catching up massively. Although Norway doesn’t make it into the top 5, it remains the country with the highest share of sold electric cars worldwide (68%). Alongside Scandinavian countries, the first six countries in Europe also include the Netherlands (41%) and Germany (20%). The former aims to completely phase out the sale of combustion vehicles by 2030.

Electric Car Dwarfs: North American Market Further Lags Behind

North America can show a 41% increase in electric range compared to Q4/2019, but Europe has the highest relative increase with 180%. China, the former main driver of electrification, still sees an increase of 99%. A significant gap between the regions is revealed in the number of electric cars sold. In North America, with only 0.4 million cars sold throughout the year, less than a third of Europe's sales figures were achieved. The same applies to the share of electric vehicles in the cars sold: In the fourth quarter in North America, less than 3% were electrically powered. This trend also impacts the declining market share of American OEMs worldwide. In contrast, European countries saw a significant increase in both range and sold units last year, boosting their share by more than 50%.

Electric Vehicle Sales: VW Overtakes Tesla - Thanks to PHEVs

For the first time, VW was able to overtake Tesla in the last quarter of 2020, with 192,000 electric vehicles sold. However, in terms of worldwide sold electric range, Tesla defended its position decisively, with about 100 million kilometers in Q4/2020, well ahead of VW with about 45 million. This is due to the higher proportion of plug-in hybrids in Europe, which is significantly lower weighted in the cumulative range. Tesla's share of the total range, however, fell by 7% to 26% in Q4/2020 compared to the same quarter last year, while other European manufacturers like VW (+6%), PSA (+3%), and Daimler (+2%) saw substantial increases.

“While Tesla's market share and dominance were almost untouchable last year, they are beginning to crumble now. European, and particularly German, manufacturers are gaining more market share with successful launches of fully electric volume models,” analyzes Dr. Hannes Weckmann, Director at AlixPartners and co-author of the study.

Besides government-subsidized purchase incentives and increasing environmental awareness among automotive customers, the EU-wide limitation of CO2 emissions remains a central driver of this massive structural change. The looming penalty payments make a fleet transformation and sustainable successes in electromobility urgently necessary for manufacturers and suppliers to stay competitive in the market, according to the analysis.

Electric Range Ranking by Models: ID.3 Overtakes Tesla Model 3

The biggest changes can be seen in the range ranking of manufacturers and vehicle models in Europe. Here, Tesla’s Model 3 in Q4/2020 had to cede its top position to the VW ID.3 (19.8 million kilometers, a range share of 14.3%) and now only has a share of 12.0%. The ID.3 was in sixth place in Q3/2020. The Renault ZOE maintains its position in the top 3 (11.6 million kilometers, 8.4%). Following closely is the Hyundai KONA, which improved by three positions (9.9 million kilometers, 7.1%). The Audi e-tron quattro secures its position in the top 5 with 6.1 million kilometers (4.4%), and the Kia Niro jumps five places to sixth (3.5%). The newly entered Mercedes EQC 400 (2.9%) and PEUGEOT e-208 (2.7%) complete the top eight positions. The study authors expect that the high number of announced new electric models will significantly change the ranking throughout the year.

Dr. Marcus Kleinfeld, automotive expert and Managing Director at the consulting firm, sees the first steps towards the electrification of the automotive market as achieved but warns against premature satisfaction:

“Besides airplanes, cars were the most criticized means of transport in recent years for their negative climate effects. Manufacturers and suppliers, long seen as brakes on electrification, must continue to push the transformation of their industry due to the initial visible successes,” he demands.

Even though the goal of climate-neutral car transport is still a long way off, investments in electromobility are gradually beginning to pay off in market shares, Kleinfeld believes. However, this is no reason for the awakened electric giants to rest on their laurels again.