Where are we going? Market outlook
ECG — 2023-10-05
News from ECG
Where are we heading? ICE’s out and ZEV’s in?
Annual light vehicle sales in the region of Europe are forecast to hit 16.3 million units in 2023, rising to 18.9 million units per annum in 2035 as per the latest data from ECG data partner S&P Global.
Meanwhile the European common goal is for a carbon neutral landscape where zero emission vehicles (ZEVs), such as battery electric vehicles (EVs), will be the only vehicle options for the populations in these lands. The European Automobile Manufacturers Association (ACEA) confirms the EU target that by 2035 CO2 emissions from new passenger cars and light commercial vehicles should be -100% of what they were in 2019.
In our latest ECG Business Intelligence report we look at the data, we deep dive into the penetration rates of electric vehicle adoption and we look carefully at the players in the market.
Using the ACEA outlook, we note that the volume of ZEVs on Europe’s roads today amount to 12.5 million units in 2023. This is just 4.39% of the total car parc on EU roads this year. Yet, by 2030 the volume of ZEVs must increase to 87.1 million units, accounting for 28.8% of the total car parc in Europe. Therefore between 2023 and 2030, that’s 7 years, the volume of ZEVs must increase by over 74.6 million units.
Let’s look at 2035. The volume of ZEVs is predicted to be 162.8 million units, accounting for 52% of the car parc. Therefore between 2023 and 2035, a 12 year period, the volume of ZEVs must increase by 150.5 million units.
For this to happen we need high penetration levels of ZEVs in markets in Europe. However, while some countries have a higher penetration rate of battery electric models, the year to date EV market share in the EU is just 13.9%, as per ACEA data. On a month-on-month basis, the EV market share is fluctuating with some months gaining percentage points, and then seeing drops. This indicates that consumers are still unsure about EVs, the uptake is not consistent and unless more is done to raise this by legislation, the targets unfortunately will not be reached. Maybe more time is needed, but equally more incentives are needed if the future is really to be predominantly ZEVs.
If we look further out in the outlook, the volume of ZEVs must account for over 92% of the parc in 2050, as per the European Climate goals, when volumes of ZEVs will be over 311.3 million units. So, to reach these targets, more has to be done today to raise the market penetration levels across Europe. What we don’t want, however, is fields of unused, new battery electric cars just discarded before the market is ready to accept them.
Back to today— annual sales forecasts expect Europe to have new light vehicle sales of over 16.3 million units this year (12.4 million in the EU alone) rising to over 18.9 million, which is 13.59million in the EU by 2035. All of which are going to need to be ZEVs!