In a metric that has shown an absolute opposite trend to otherwise dreadful industry numbers, electric vehicle sales in Europe clocked a 72% uptick in the first quarter of 2020, says a new report from Canalys research. This comes when overall Q1 auto sales in Europe have shown a drop of 1 million units as compared to previous year’s same quarter.
The results were in line with expectation as there has been a general slowdown in sales of vehicles from the last 3 quarters. Electric Vehicles however, has continued its steady increase from the past to grow in Q1 of 2020 despite COVID effect. Despite that 72% uptick though, analysts believe these numbers could have been better sans COVID-19. “The impressive EV results could have been even better,” said Chris Jones, Chief Analyst for the automotive sector at Canalys.
Demand however, is set to pick up. “Demand for EVs outstripped supply and there are long waiting lists and lead times for new high-profile EVs. Some automotive OEMs were forced to delay launches and some even kept older EVs on the market to satisfy demand – the VW e-Golf had a record sales quarter in Europe. Government incentives and trade-in schemes will mean substantial discounts on new EVs – all good news as dealerships reopen and the market picks itself up”, added Jones.
The slump in overall automotive numbers has been attributed to lockdown which came into effect in Wuhan province on Jan 20 (the global hub of auto parts manufacturing). This resulted in breaking down of the supply chain. The existing inventories with manufacturers enabled the industry (both gasoline & electric) to sustain for up to end of Feb, by this time auto companies were reporting shutdown of plants due to lack of spare parts. This did affect part sales which got further compounded as the COVID spread virulently to Europe putting it under lockdown.
The consistent increase in sales of electric vehciels has been a result of the improvement in battery technology, resulting in better mileage. The increased range over 300km per charge, coupled with innovative transport initiative of EV bicycles, bicycles/scooter on rent has raised the interest manifold, said Canalys.
There are currently more than 75 EVs and PHEVs available in Europe, with more on the way. The Tesla Model 3 led sales with over 20,000 deliveries in Q1, while the most successful of the newly launched models was the Peugeot e-208.
Despite COVID-19, there appears to be a silver lining for EVs. The repulsion of the general public to mass transport may spur demand for low end and economical version of EVs for the public to meet there daily commuting needs. The auto industry will have to accordingly align their strategies with the public need to further cut vehicle pricing and come up with an innovative microfinance scheme to spur demand.
Globally too, EV adoption has started to show decent uptick, largely as a result of some aggressive and favourable government policy. India for example, has introduced a string of initiatives to promote environment-friendly transportation policy by introducing BS 6 & FAME initiative to put EVs on the fast lane of adoption.
