Customer Logins
Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Customer LoginsEU alternative fuel passenger car registrations flat during Q2 despite plug-in, hybrid gains – ACEA
Alternative fuel passenger car registrations in the European Union (EU) have been flat during the second quarter of 2016, despite demand for plug-in and hybrid variants continuing to grow, according to the latest data published by ACEA.
IHS Automotive Perspective
- Significance: Alternative fuel passenger car registrations in the EU have grown by just 0.6% y/y during the second quarter of 2016, despite demand for plug-in and hybrid variants continuing to grow.
- Implications: Despite the flatness in the topline number, they hide an undercurrent of shifts within the data between types mainly due to regulatory changes.
- Outlook: Looking forward, IHS Automotive anticipates that the share of registrations for vehicles with some degree of electrification will continue to grow, with a tipping point for expected at around 2019-20 as automakers prepare their vehicle ranges to meet the stricter fleet emissions regulations due to come in to force in 2021.
Registrations of alternative fuel passenger cars in the European Union (EU) have been relatively flat during the second quarter of 2016, according to the latest data published by European Automobile Manufacturers' Association (ACEA). During the three-month period ending 30 June, registrations have grown by 0.6% year on year (y/y) to 147,784 units. As a result, registrations slipped back in the first half of the year, with growth now standing at 3.5% y/y to 302,819 units. However, including the two European Free Trade Agreement (EFTA) markets, Switzerland and Norway, registrations for the quarter have grown by 2.8% y/y to 166,550 units, while during the first half of 2016 the improvement stands at 5.7% y/y to 339,485 units.
During this timeframe, battery electric vehicle (BEV) registrations in the EU have increased by 5.1% y/y to 14,579 units, as growth rates in some of the leading markets in the region have slowed, including France (+23.1% y/y) and the UK (+2.7% y/y). However, others have declined or fallen further in to retreat such as Germany (-11.6% y/y), Sweden (-32.5% y/y), Netherlands (-36.2% y/y) and Denmark (-76.9% y/y). Nevertheless, upsides in the market came from gains in Austria (+144.2% y/y) and Spain (+134.6% y/y). However, when including EFTA, registrations on BEVs in the region have slid by 3.0% y/y to 20,663 units, as previous leading market for this type of vehicle fell by 17.6% y/y to 5,319 units, while Switzerland fell 21.9% y/y. Overall BEV registrations in the first half of 2016 have now reached 18.6% y/y to 31,099 units, although including the weaker performing EFTA, it is now only up by 7.2% y/y at 44,381 units.
Registrations of plug-in hybrid electric vehicles (PHEVs) in the quarter have been stronger with an increase of 9.6% y/y in EU at 18,862 units. This has been underpinned by strong gains in the UK, which has increased by 58.7% y/y to 6,061 units to become the largest market for this type of vehicle in the region. It has been supported by a surge in Sweden (+166.3% y/y) and Belgium (+145.2% y/y). However, the rate of growth in France has significantly weakened to just 10.8% y/y, while Germany has edged into decline with a fall of 7.1% y/y. However, the biggest single drag on the market has been the Netherlands, which has gone from being the largest market during the same period a year ago to falling 72.6% y/y to 1,661 units. When the data for the EU is added to EFTA, the picture becomes even more positive with a PHEV gain of 25.5% y/y recorded during the quarter to 25,341 units. This has been driven by a surge in demand for this type of powertrain in Norway, which has jumped by 136.5% y/y to 5,843 units. The performance this quarter has seen PHEV registrations during the first six months in the EU grow by 17.7% y/y to 38,046 units, while including EFTA this becomes a jump of 35.4% y/y to 49,726 units.
Elsewhere, another powertrain type to have a strong month is hybrid electric vehicles (HEV). Registrations of mild- and full hybrids have grown by 22.6% y/y in the EU to 63,707 units. While France, which saw 10,615 units registered, fell by 22.6% y/y during this period, and the UK recorded a more moderate improvement of 7.8% y/y to 11,841 units, other markets have contributed more robustly. This includes Italy (+46.1% y/y), Germany (+25.3% y/y), Spain (+100.8% y/y) and Sweden (50.7% y/y). The addition of EFTA to the EU total brought with it further improvements with an increase of 24.4% y/y to 69,582 units, as hybrid registrations in Norway leaped 60.0% y/y. Overall, EU registrations of HEVs during H1 have grown by 25.8% y/y to 132,897 units, while in EU+EFTA registrations are up by 26.6% y/y to 144,051 units.
The big drag on alternative powertrain registrations have come from "Other" fuel types which includes natural gas, liquid petroleum gas (LPG) and ethanol (E85). In the EU, this type of vehicle has seen a fall of 20.8% y/y to 50,211 units. The main reason for this has been a contraction in Italy for these types of vehicles, with a fall of 22.3% y/y to 41,420 units. However, these was little impetus for improvement from elsewhere, with even the contribution of EFTA adding to the woes with a decline of 20.9% y/y to 50,453 units. This added to the issues seen during the first quarter and as a result the YTD for the EU is now down by 21.5% y/y to 99,795 units while in EU+EFTA the contraction is 21.6% y/y at 100,198 units.
Outlook and implications
While the top line registrations for alternative powertrain registration in Europe are flat, they hide an undercurrent of shifts within the data between types. This will have partly come about due to regulatory shifts. Indeed, some markets have seen exceptionally high rates of growth in demand for some powertrain types underpinned by market incentives which have either been made stiffer or withdrawn altogether, leading to a reduction in the rate of improvement or big slumps. Among those has been the UK, which has adjusted the rates offered to many BEV and PHEV models from the 1 March. The impact on PHEVs could be far greater in the second half of the year as orders need to be fulfilled for the earlier scheme by the end of November 2016, although this may be offset by the rising numbers of vehicles available. An even greater impact from this situation can be seen in the Netherlands, and the high base of comparison caused by consumers rushing to register such vehicles in the second half of 2015 will hit the wider rate of growth in the second half of 2016. There has also been a shift in EV and PHEV demand in Norway which is likely to reflect customers rushing to beat the fear of EV incentives being withdrawn, while other customers are attracted by the flexibility offered by PHEVs, of which there is a growing range available.
However, other markets should help to offset this downturn. Indeed, BEV and PHEV sales are being helped amongst others by the rebound being seen by those markets heavily hit during recent economic upheavals, as they become part of the broader fleet replacement after a period of hiatus. Furthermore, the German government has now chosen to push forward for incentives for BEV and PHEV ownership, although it is limited to those OEMs prepared to match the German government's contribution.
Looking forward, IHS Automotive anticipates that the share of registrations for vehicles with some degree of electrification will continue to grow. However, the tipping point for growth is expected to be around 2019-20 as automakers prepare their vehicle ranges to meet the stricter fleet emissions regulations due to come in to force in 2021. Beyond that point demand for hybrids which grow strongly. However, we still expect electric vehicles to make up a fraction of the market by the end of our forecast.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.