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Customer LoginsEuropean electrified passenger car demand grows further during Q3 2016 – ACEA
Demand for electrified passenger cars has continued to grow during the third quarter of 2016 according to the latest data published by ACEA.
IHS Markit Perspective
- Significance: Demand for electrified passenger cars has continued to grow during the third quarter of 2016 according to the latest data published by ACEA.
- Implications: The data reflects the push by regional and local legislators towards reducing emissions.
- Outlook: IHS Automotive anticipates that the share of registrations for vehicles with some degree of electrification will continue to grow, with a tipping point expected around 2019-20 as automakers prepare their vehicle ranges to meet the stricter fleet emissions regulations due to come in to force in 2021.
The European market has seen a further uplift in the number of electrified vehicles during the third quarter of 2016. The data were released as part of the European Automobile Manufacturers' Association (ACEA) revealing its registrations of alternative fuel vehicles for the same time frame. According to the trade association, demand for 'electric rechargeable vehicles' comprising both battery electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV) gained by 20.2% year on year (y/y) during the three months ending 30 September to 35,237 units in the European Union (EU). A further 12,965 units were registered in the European Free Trade Agreement (EFTA) market, a gain in itself of 40.0% y/y. Overall, during the first nine months of the year, registrations of such vehicles in the EU reached 105,241 units, a gain of 18.9% y/y, while in EFTA the growth rate was 30.5% y/y to 38,074 units.
On an individual basis, the market for BEVs in the EU has grown by 11.8% y/y during the past quarter to 14,452 units. In spite of improvements in the German market of 22.0% y/y, a 25.1% y/y gain in UK and a more than doubling in Austria, the performance in the region has been hit by flat registration data in France. Furthermore, registrations in Sweden slid by 7.1% y/y while in Denmark they have halved. This relatively weaker performance has been a drag on the categories' year to date (YTD) for the EU, which is now up by 17.9% y/y to 45,403 units.
BEVs are struggling even more so in EFTA where registrations have fallen by 4.6% y/y to 6,585 units primarily as a result of a weakening in sales in Norway. This has meant that registrations of such vehicles are now down by 10.1% y/y during the YTD.
Registrations of PHEVs have been far more buoyant though. During the quarter, demand has grown in the EU by 26.4% y/y to 19,998 units. The leading market for this type of passenger car has been the United Kingdom where 6,195 units were registered, an increase of 59.7% y/y. However, while there has been strong gains also from the French and German markets there have been even more considerable improvements elsewhere. This includes Sweden (+192.0% y/y) and Belgium (+249.9% y/y). The extent of gains was offset by the 58.1% y/y fall seen in Netherlands to 2,380 units. Nevertheless, the growth of registrations of such vehicles in the EU during the YTD now stands at 20.5% y/y to 58,070 units.
The gains in PHEV registrations have been even more considerable in EFTA though, with an increase in the quarter of 180.9% y/y to 6,287 units. Again, the market in this region is heavily influenced by Norway, which has seen a jump of 212.7% y/y during the past quarter alone to 5,541 units. This has helped registrations in EFTA increase by 171.1% y/y during the YTD to 17,967 units.
The latest ACEA alternative fuel vehicle data have also shown that demand for hybrid electric vehicles (HEV) has also improved strongly this quarter. Combined registrations of full hybrid and mild hybrid passenger cars have increased by 29.2% y/y to 67,802 units. The majority of markets in the region have recorded considerable double-digit percentage gains this month, although there was some drag from France (-20.0% y/y) and the Netherlands (-11.8% y/y) in particular. The YTD for HEVs in the EU has further improved and for the nine months has now grown by 27.1% y/y to 200,854 units.
As for HEV sales in EFTA, registrations have jumped 60.6% y/y to 7,463 units in the third quarter, as growth in Norway hit 84.2% y/y to 5,043 units. During the year to date (YTD), registrations have now grown by 44.9% y/y to 18,617 units.
ACEA has also published the data for "Other Alternative Fuel Vehicles" comprising of those powered by natural gas, liquid petroleum gas (LPG), and ethanol (E85). Registrations for such vehicles have fallen by 26.2% y/y in the EU to 34,384 units. This has largely been driven by a 27.1% y/y fall in the Italian market to 27,960 units. The YTD data for this type of vehicle has now shown a 22.8% y/y decline to 134,143 units.
Outlook and implications
The data published by the ACEA underline the general trends in terms of alternative powertrains and particularly in terms of electrification. This is largely being driven by legislators on a regional level - who are setting emissions levels to be met by OEMs - and at a local level, where they have pushed customers through incentives and taxation. The rate of growth or decline in many larger markets for these vehicles on a country level is largely a result of these benefits being implemented or withdrawn. Indeed, Germany has been a market that has seen the government implement new support measures for such vehicles, which has helped lift sales of both BEVs and PHEVs (see Germany: 28 April 2016: German government and OEMs agree EV and PHEV subsidy programme), while there has been some uplift due to popular local OEMs widening their range of vehicles with these powertrains. Furthermore, there has also been a change in circumstance in Norway which has seen demand for PHEVs draw level with that of EVs, as while customers pulled forward registrations of EVs on fears of withdrawal of some incentives, other customers are attracted by the flexibility offered by PHEVs. However, the UK market has seen growth continue in both the BEV and PHEV markets despite changes to the incentives in recent times (see United Kingdom: 18 December 2015: UK government announces changes to plug-in car grant). Despite the changes, the market for these vehicles remains supportive for these types of vehicles.
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 will 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.