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9 November 2022

BEVs retains momentum in Europe, as Italy regresses

Q3 new vehicle registration data shows that Europe is still slowly making its shift towards electrification, with plugin electric vehicles taking up 20.4% market share.

While the quarter only showed an improvement of around 2% compared with Q3 2021 in plugin EV uptake, this is partly due to a fall in the number of PHEVs hybrids being ordered, which has quashed plugin gains for the year.

ICE vehicles bore the brunt of market share losses, with petrol vehicles losing 1.5% and diesel losing 1% compared to the year before. These losses represent a 4% and 6% year-over-year drop for new petrol and diesel vehicles respectively, this is largely as a result of less-than-ideal market conditions within Europe moving consumers towards the used market, alongside ever-closer deadlines to ending the sale of ICE vehicles within Europe.

PHEVs have also started to lose popularity, dropping from 9% to 8.5% market share from Q3 2021 to Q3 2022, continuing most of Europe’s move away from the vehicle class as charging infrastructure expansion continues to eliminate its limited use-case.

Mild hybrid HEVs have also been a clear winner, gaining 1.4% market share compared to the year before, and while the technology may be an interim solution, it’s less petrol being consumed on the road which is at least some consolation on the route towards electrification.

This doesn’t tell the whole story though, countries within Europe have been taking different approaches to incentivizing EVs and preferences have emerged for different vehicle types at a national level.

Germany saw just under 106,000 BEVs take to its roads in Q3 2022, compared with 88,000 in Q3 2021, an increase of 20% year-over-year. PHEVs remain somewhat popular in the country but Q3 saw a 0.9% drop in sales compared to the year before, falling from 77,493 to 76,767, Germany is a little behind the curve when it comes to moving away from PHEVs relative to places like France or the UK.

Petrol vehicles in Germany saw a significant drop in sales as expected, falling from 232,441 to 215,910, a 7.1% drop relative to the year before. Interestingly diesel vehicles saw an increase in sales this quarter within the country, a 3.3% increase compared to the same period a year before, but we can safely assume this is an anomaly due to the 15% drop that has been seen over the course of the year so far.

France showed a largely similar story, just with some greater extremes due to its lower vehicle base. The country saw an increase of nearly 40% in BEV sales compared to Q3 2021, and a 14% drop in PHEV sales over the same period, showing significant shifts in favor of BEVs. France saw a marginal drop of 2% in sales of petrol vehicles and a significant drop of 18.3% in diesel sales for the quarter, over the course of this year France has seen 14% fewer petrol sales and 34% less diesel sales relative to 2021.

The two countries diverge when it comes to mild hybrid HEVs, with France selling 15.6% more HEVs this quarter relative to last year and registering nearly 10% more over the course of this year relative to 2021. Meanwhile Germany sold 1.5% less HEVs than in Q3 2021, but is up just over 3% for the year so far.

This divide is clearest in Italy, where the country saw nearly as many HEV sales as Germany, registering over 103,000 new hybrids in Q3, a 20% increase on the year before. Italy’s love of hybrids is coming at least partly from its disdain for BEVs, which saw the country registering less than 11,000 this quarter, a 35% reduction relative to the quarter before and a 23% reduction for the year so far.

Italy is also the only country within the EU to have registered less BEVs than the year before if you discount Austria, which registered 0.1% less than in 2021, which is at least forgivable by comparison. It’s becoming clear that Italy has decided to commit to HEVs until it’s effectively forced to switch to plugin vehicles by European directive.

If that wasn’t bad enough, Italy was also the only major European economy to increase petrol vehicle sales if you discount Greece and Portugal, with a 13% increase in petrol sales for the quarter. This is hopefully anomalous considering Italy has currently registered nearly 24% less petrol vehicles over the course of this year relative to 2021, indicating this is unlikely to be a reliable trend.

Elsewhere in Europe, the UK registered 17.8% more BEVs in Q3 relative to the year before and followed trends very similar to that of France, reducing PHEV, petrol, and diesel sales while increasing HEV sales.

Spain also followed a similar trajectory to that of the UK and France, showing increased BEV and HEV sales, and reduced ICE and PHEV sales.

With the exception of Italy, Q3 has continued to show that past changes in consumer buying behavior have persisted throughout increased electricity prices, and while much of Europe may be staring down the barrel of a prolonged recession, the demand for BEVs in particular has been largely unharmed.

It also confirms much of what we said in our amendment to our EV forecast, including Italy’s shift away from BEVs towards HEVs, much to its own detriment now and in the future.