In the realm of electric vehicles and the automotive industry, several questions arise. Let’s delve into the intricate details, shedding light on the significant facts and developments while steering away from numbers in square brackets.

Regulatory Pressure and OEMs’ Shift to EVs:

The European Union and other country Original Equipment Manufacturers (OEMs) in the EU found themselves under pressure from the regulation committee. It set challenging targets for new vehicles in 2020/21. These stringent regulations prompted a shift in the OEMs’ perspective, making them consider electric vehicles (EVs) as a viable solution.

CO2 Regulation Evolution

Looking back at the CO2 regulations, the 2009 target was a simpler goal and could be easily met. It aimed at achieving 130 g/km of CO2 for fleets, a milestone that was successfully reached by 2015. However, this law alone is no longer adequate to push the automotive industry toward complete EV adoption.

EU’s Environmental Challenge

The European Union stands as the third-largest emitter of greenhouse gases, primarily from its automobiles. While other sectors have witnessed a 32% reduction in emissions, transportation has seen a 33% increase. The EU Commission’s goal of achieving net-zero economy-wide emissions by 2050 highlights the urgency of this issue. A comprehensive review of target achievements in 2021 and mid-2022 suggests the need for more stringent norms and faster progress toward the 2030 and 2035 targets.

Rise of Electric Vehicles:

Despite challenges and regulatory pressure, the electric vehicle market has been on the rise. Sales have surged, particularly after the COVID-19 pandemic. The digital landscape has gained prominence, with automakers heavily investing in their digital presence to cater to the growing online customer base. Furthermore, electronic industries are entering the automotive sector, bringing disruptive technologies that are reshaping the industry.

Battery Technology Investments

The transition to electric power in the European automotive sector has prompted significant investments in battery production. Battery packs, a fundamental component of EVs, are seeing substantial investments in building production capacity. Notably, many of these initiatives are led by current Asian market leaders, and European firms, including startups, are actively collaborating with OEMs to accelerate battery development.

Challenges in Sustainability

While EVs are gaining traction, the cost factor remains a challenge in the overall sustainability chain. Issues related to material sourcing, end-of-lifecycle management, and recycling are areas that demand attention and innovation.

Impacts of Global Events

Global events, such as lockdown measures in 2020 and the COVID-19 Delta variant, have had significant effects on the automotive industry. Supply chain disruptions, driven by pandemic-related challenges and the automotive semiconductor shortage, have impacted production and sales.

Electric Vehicle Market Trends

In 2021, approximately 2.25 million units were sold, with EVs capturing 19% of the market. Diesel accounted for 21.7% of the market, and it is expected that EVs will outsell diesel vehicles in 2022.

Fuel Type Preferences

In the first quarter of 2022, battery-electric vehicle (BEV) sales increased by 61%, securing a 10% market share. Meanwhile, plug-in hybrid vehicle (PHEV) sales decreased by 6%, holding a 9% market share. Petrol cars maintained a dominant position with a 36% market share, but diesel cars saw a significant decline.

Hybrid Electric Vehicles (HEVs)

HEVs accounted for a 25.1% market share in the first quarter of 2022, making them the second most preferred vehicle type. Subsidies for PHEVs are being reconsidered, as doubts persist about their contribution to lower emissions, particularly for company vehicles.

Global New Car Registrations

Asia contributed 48.4% to the total global new car registrations, followed by America at 24.7%, Europe at 22.7%, and the Middle East/Africa at 4.2% in 2020. However, the industry experienced negative growth in most regions, with Asia showing a -9.7% decline compared to 2019.

Trends in Car Sales

Over the past decade, there have been notable fluctuations in car sales trends. The most significant dip occurred from 2020 onwards.

Fuel Preferences

Petrol cars dominated EU sales from 2017 to 2020. Diesel cars steadily lost their market share, while alternative fuels saw a considerable rise.

CO2 Emission Trends

CO2 emissions from new cars in the EU exhibited a -11.3% decrease in 2019. Since 2013, emissions have followed a dynamic pattern, with both significant increases and decreases.

The automotive industry is navigating a complex landscape, with various challenges and opportunities shaping the future of electric vehicles and the broader automotive sector.

References:

1. Henk Bekker, Jan 2022, “2021 (Full Year) Europe: New Car Sales and Market Analysis”, Available at: https://www.best-selling-cars.com/europe/2021-full-year-europe-new-car-sales-and-market-analysis/; Accessed: 13/08/2023.
2. Henk Bekkler, May,2022,” 2022 (Q1) Europe: Electric and Plug-In Hybrid Car Sales per EU, UK, and EFTA Country”, Available at: https://www.best-selling-cars.com/electric/2022-q1-europe-electric-and-plug-in-hybrid-car-sales-per-eu-uk-and-efta-country/, Accessed: 13/08/2023.
3. Acea, March 2022,” The Automobile Industry, Pocket guide 2021/2022”, Available at: https://www.acea.auto/files/ACEA_Pocket_Guide_2021-2022.pdf#page=20 , Accessed: 15/08/2023.
6. Mathilde Carlier June 2022, “Monthly passenger car sales in Europe between March 2020 and April 2022”, Available: https://www.statista.com/statistics/1104622/monthly-car-registrations-europe/ , Accessed: 16/08/2023.