Europe was hit hard when the coronavirus pandemic began early this year. Lockdown measures brought economies to a near standstill, prompting governments to enact stimulus plans to keep industries from collapsing. The situation still isn’t ideal, but one industry that looks to benefit greatly from the continent’s response to the coronavirus pandemic is electric vehicles (“EVs”).
According to sales figures from the European Automobile Manufacturer’s Association, the combined market share of EVs and plug-in hybrids increased by 6.8% in the first quarter of the year, a jump from the 2.5% growth rate seen in the same quarter last year. “In the very short term, we have seen that EV uptake rates have been immune to the drop-off in the new car sales,” says John Murray, head of EV research at the consultancy Delta-EE.
He states that there are currently 2 million EVs on the roads of Europe, with the number expected to exponentially increase to 40 million by 2030. “In the first five months of the year, half the cars sold in Norway were electric and 20% were plug-in hybrids. That means 70% of the cars sold have a plug,” he says. Norway’s planned phase-out for internal combustion engines by 2025 is arguably the most aggressive on the continent, but other countries are setting their own targets as well.
According to Murray, UK may meet or even exceed its own 2035 ICE phase-out target thanks to falling EV prices, increasing choice of models, and consumer desire for environmentally friendly choices. Monthly data from the Society of Motor Manufacturers and Traders shows that battery vehicles are performing well in the UK. Compared to last May, new gasoline and diesel registrations were down by around 90% while BEVs were up by 21.5%. This boost may have been due to a tax break for corporate buyers that started in April.
Germany, which has been praised for its response to the coronavirus pandemic, has also passed the most substantial COVID-19 stimulus package in Europe. The country has doubled its EV incentive from $3,370 to $6,743 with manufacturers adding another $3,000 for a total of $9,743 for new vehicles costing less than $52,682. Existing ICE phase-out dates may need to be revised if other countries follow suit.
“I think ultimately the end consumer will be the strongest driver of change. The carmakers now want to get people back into showrooms and create strong demand. I think part of what they need to offer is better and more environmentally friendly propositions in order to get customers back,” says Peter Carlsson, CEO of battery manufacturer Northvolt.
Experts say that North American EV sector players like ElectraMeccanica Vehicles Corp. Ltd. (NASDAQ: SOLO) can only hope that buyers in the U.S. respond with the same enthusiasm to electric vehicles as those in Europe are doing.
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