While China has just begun the year of the Ox, judging from January numbers, the European car market may well be celebrating the year of the PHEV, following on from the BEV last year. With 2020 CO2 compliance mostly achieved, in large parts thanks to the 2020 95 per cent phase-in and full value of super-credits, 2021 will undoubtedly see a rise in xEV volumes to meet more demanding 2021 compliance levels in a total passenger car market expected to grow following a 35 year low last year.
While January BEV volumes witnessed a modest 19.7 per cent growth rate over the same period last year, recording 45,970 units (6% penetration), according to the latest European Electric Car Report data the month was likely largely impacted by depleted stocks following the previous month's record volumes (165,600 units; 15.1% mix) as OEMs, in last-minute fashion, raced to achieve EU CO2 compliance levels. Production facilities in Christmas shutdown mode likely also contributed to low xEV inventory. Alongside this, key player Volkswagen presumably began the year by delaying MEB (ID.3/ID.4) deliveries (VW didn't want to comment on this), waiting for a software fix to be resolved. With the software update now available, ID.3/ID.4 volumes are expected to return in March, with Volkswagen also confirming to this report that production volumes at the Zwickau plant are currently at an 800 per day rate (to be raised to 900 from March). In January, a number of key fiscal changes also impacted markets such as The Netherlands and Spain.
Looking at the year's opening month in more detail, premium manufacturers betting their hopes on profitable PHEVs to achieve 2021 CO2 compliance didn't waste any time in rolling out their controversial semi-electric models. To prevent the gap between emissions tested in the laboratory and real-world emissions from increasing, the European Commission, from January, began to regularly collect data on the real- world CO2 emissions and energy consumption using the on-board fuel consumption monitoring devices. This likely explains the reason behind BMW's decision to introduce several measures, such as rewarding drivers who use the electric motor regularly and geofencing technology – switching automatically to EV mode – in some cities. PHEVs have come in for criticism as they benefit from reduced tax rates in many key markets without an obligation to charge the vehicle.
During January, PHEVs accounted for 58.3 per cent of all plug-ins registered in the region, with premium OEMs accounting for just under 60 per cent of these. As the year progresses, thanks to advantageous fiscal rules for PHEVs, tough Malus' and an increased product offering PHEVs will remain in vogue, but BEVs are expected to bounce back from March thanks to the Tesla quarterly boost and VW's BEV bounce.
This is just a summary of the European Electric Car Sales Monthly Market Intelligence Report which is published on a monthly basis and are available here. *Western Europe 18 Markets: EU Member States prior to the 2004 enlargement plus EFTA markets Norway, Switzerland, Iceland, plus UK