Battery-electric vehicle registrations close in on diesel cars in Europe
14 February 2023
The uptake of electric vehicles (EVs) in Europe continued apace in the fourth quarter of 2022, buoyed by Germany’s year-end surge in registrations ahead of the lower incentives introduced on 1 January this year.
Battery-electric vehicles (BEVs) enjoyed the highest year-on-year growth of all powertrain types in 2022, gaining 29.3% to capture a 14% market share according to figures released by the European Automobile Manufacturers’ Association (ACEA). Although registrations of new plug-in hybrids (PHEVs) declined, the 2.7% downturn was less pronounced than the 4.1% contraction of the entire European new-car market. Accordingly, their share edged forward to 9% from 8.9% in 2021, reversing the downward trend of the first three quarters of 2022.
In total, almost 2.6 million new EVs were registered in Europe last year, up 14.6% on 2021, increasing their market share to 22.9%. For consumers not ready to embrace EVs, however, hybrid-electric vehicles (HEVs) serve as a stepping stone and became the second most popular powertrain in 2021, overtaking diesel. Registrations across Europe grew 8.4% in 2022, accounting for 23.4% of the market. Therefore, almost every other new car registered in Europe last year featured an electrified powertrain.
Registrations of new petrol-powered cars fell 12.9% year on year. Petrol remains the leading fuel type in the region but its share receded to 36.7% from 40.2% in full-year 2021 and over 50% prior to 2020. Moreover, the lead of petrol over HEVs has narrowed significantly to 13 percentage points, from 20 percentage points in 2021.
Unsurprisingly, diesel is disappearing far more quickly, with registrations down 20.9% last year. Accordingly, their market share has dropped to 14.5% from 17.6% in 2021, exceeding the BEV share by only half a percentage point. This means new cars with an internal-combustion engine (ICE) commanded a 51.2% share of the European market in 2022, compared to 58% in 2021. ICE is therefore perilously close to accounting for less than 50% of the region’s new-car market, a far cry from almost 90% in 2019.
Trending to zero emissions
Lower BEV incentives and the termination of PHEV subsidies since 1 January had a significant pull-forward effect on EV registrations in Germany as 2022 drew to a close. This year-end spurt helped EV registrations in the country to grow 22.2% year on year and their share to gain 5.4 percentage points. However, rising fuel prices and the proliferation of new models also helped their cause and the EV share grew in every European market in 2022, except Italy. As European manufacturers struggle to fulfil orders, the EV share gains could have been even higher.
Despite the inevitable reduction in government subsidies, and higher taxes, the trend for consumers to switch to BEVs will continue. For example, France and the UK have lowered or terminated incentives over the last year, with no significant impact on the BEV share. The impact is greater in Germany because of the larger value reduction in available incentives, as evidenced by the January registration figures. However, the payback is only expected to last for a few months and the BEV share is expected to rise further in 2023, albeit buoyed by lower demand for PHEVs.
EV-volumes.com forecasts that EVs will account for more than one in four European new-car registrations in 2023 and one in three by 2025. The 100% carbon-emissions reduction target will ultimately see an end to the sale of new ICE and hybrid models. However, it is not clear whether this ban will be in force from 1 January 2035, or later in the year, and exemptions are envisaged for smaller markets and specialist vehicles. Accordingly, EV-volumes sees the EV share of the European new-car market trending towards 100% in 2035, but not achieving it. PHEVs are expected to still play a role, albeit a bit part.