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The Electric Revolution could be over before it has even begun

Is the Electric Revolution over before it has even begun? Manufacturers, governments and automotive experts are pushing the notion that we are on the cusp of a radical shift towards electric mobility. But the cold, hard facts on the ground tell a different story.

The cold, hard fact is that sales of battery-electric vehicles (BEVs) in Western Europe has stagnated last year. According to figures released by Automotive Industry Data, BEV sales in 2016 grew 4.6% to 94,056 units, but the overall automotive market in Western Europe expanded by 5.8%. As a result, BEV market share remained stuck at a meagre 0.68%.
Lofty predictions
”(This) suggests the (electric) revolution is struggling for oxygen”, writes Forbes Magazine, which contrasts the anemic sales results with some of the loftier predictions about the electric-vehicle tsunami that would soon make fossil-fuel vehicles as obsolete as, well, fossils:
→ In 2016, Morgan Stanley predicted BEV sales would take up 10%-15% of the global new-car market by 2025, tripling its previous estimate. 
→ Volkswagen has an even higher prediction: 25% market share for battery-electric vehicles. 
→ According to Barclays Equity Research, global BEV penetration will be over 25% by 2030 – that's globally: in Europe, the figure will be 40%. That prospect led Barclays to predict an average annual increase in vehicle efficiency of 3% between now and 2030.
Market plateau
The AID report sees little evidence for those optimistic estimates. It points out that BEV demand continues to register a below one percent – a great deal lower than previous, equally optimistic estimates had predicted for now. 
The report points out that “European consumers’ appetite for today’s still high-priced electric cars, despite tempting financial incentives and notable infrastructure improvements, is not yet strong enough to finally kick-start West Europe’s evidently stalled electric car market”.
Or, put less diplomatically: “The unpalatable message (is) that of late, Europe’s BEV market appears to have plateaued”.
Absurd targets
As an example, Forbes points to Germany, Europe's biggest car market. BEV sales in 2016 totalled 12,755 units, down 6.2% on the previous year – despite the €4,000 purchase subsidy for EVs, introduced by the German government in mid-2016.
The anemic sales highlight the absurdity of the government target to have 1 million EVs on German roads by 2020. And yet Germany was among the most dynamic markets for BEVs in Europe last year, bested only by Norway (24,233 units) and France (22,748 units).
“Electric car demand (in Western Europe) has come to a screeching halt, offering few prospects of a quick turnaround,” says AID.
Revolution postponed
And yet, hope springs eternal. Experts like investment researchers Evercore ISI see the victory of electric cars over fossil-fuel cars as “inevitable but not imminent”, writes Forbes. So, the Electric Revolution is not over – it has just been postponed. By how long?Evercore ISI's more modest prediction is that BEVs and PHEVs will have a global market share of 3.5% by 2020, and 10% by 2025 – with 'mild hybrids' adding another 10%.
“We need to be realistic about where technologies and costs stand today and what investment and progress in needed to drive a faster technological convergence”, reports Evercore ISI. “The sad truth is: customers don’t pay more money for electric cars and they certainly don’t pay for better fuel economy”. 
That will change if and when oil prices start rising again – but that is another trend that has been predicted often, and has yet to materialise.
Image: Glen Wallace, CC BY-SA 2.0
08/02/2017  |  Frank Jacobs


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