Why Europe Beats USA Again In Electric Car Sales

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As the years transition, lists of EVs coming to market in 2019 are omnipresent. But there is a problem with those lists. First, they are mainly for the USA market, and second, the availability of those new models is not great — only in California or a handful of “zero-emission vehicle (ZEV) states,” or some other very limited supply formula.

Why?

The understandable reaction of many is that the carmakers are not interested in bringing electric vehicles to market, that these are only “compliance cars” that they have to sell in certain states. But brands that have announced a switch to 100% battery electric vehicles in the short or mid term, like Jaguar and Volvo, are very serious.

And brands that have gone all-in, like Smart and Polestar, don’t make compliance cars. They are just as committed as Tesla.

In 2012, the US electric car market was the leading market in the world, thanks to the Chevy Volt, Nissan LEAF, Toyota Prius PHEV, Ford’s two Energi models, the Mitsubishi i-MiEV, and the Tesla Model S, among others. In Europe, Norway and the Netherlands started ambitious incentive programs. Those were later followed by incentive programs in other European countries, less ambitious but offering EV drivers incentives nonetheless. In 2014, China started its electrification efforts. It used the “Let a Hundred Flowers Blossom” approach to get rapid development of local production in an open and competitive market.

And then something strange happened. While the rest of the world slowly started to grow its EV market, the US market got stuck. In fact, 2015 sales were even lower than 2014 sales. In 2016, there was a market recovery, but outside Tesla, there was only about 20% growth. Not very much for a young market with this much promise for a great future. Loren McDonald did write a great article about the market push of new models.

The article does not explain why the USA market is developing slower than the European or Chinese markets, and why older models are doing great in Europe.

The Chinese used, like Norway, a combination of financial and non-financial incentives to push EV adoption, like parking permits and registration benefits. Combined with the many local governments that hoped to push their champions to become the next industrial giant, the Chinese EV market started to grow very fast.

Plug-in Vehicle Sales

Year	USA	Europe	Europe’s Share of Combined Sales
2012	52,607	43,543	45%
2013	97,507	67,026	41%
2014	122,438	100,060	45%
2015	116,099	193,439	62%
2016	158,614	222,619	58%
2017	199,818	306,143	61%
2018 (Jan–Nov)	312,877	345,312	52%

^{Sources: InsideEVs & EV Sales Blog}

But the growth in Europe was more organic. There were many different incentive schemes, often less generous than the US schemes, and badly publicized. Still, the European market overtook the US market and even the Model 3 avalanche this year could not close the gap.

In a previous article, I speculated about non-US carmakers not exporting to the USA, that it was more profitable to deliver their products to customers who had signed a sales order and placed a deposit. Putting cars on a dusty parking lot at a dealer not really interested in selling them is a waste of resources. But the sales of locally produced plug-ins like the Chevy Bolt, Nissan LEAF, and Chrysler Pacifica Hybrid are also far lower than might be expected.

In 2017, sales through dealers were 150,000 in the USA and 280,000 in Europe. (I get these numbers by omitting the Tesla sales.) This is contrary to the belief that carmakers are only producing compliance cars. They are mostly the same carmakers in Europe as in the USA that make and sell these EVs.

The big difference is the sales channel. The favorite bogeyman of many a car-buyer story is the American auto dealer, who repeatedly fails to sell EVs. In Europe, most sales are by special order. Waiting three months for even a simple Renault Twingo or VW Golf is normal. In the USA, cars are bought like jeans at Walmart. The customer expects to have a wide choice and to leave the premises with the product of his choice in one or two hours.

There are over 4,000 Chevy dealers in the USA. In colors, trim levels, and options, there are hundreds if not thousands possible configurations for the Chevy Bolt. No dealer can ever have most configurations in stock, only a small sub-selection of hopefully the most popular models. This many dealers can only have adequate cars in stock of products that sell in high volumes.

The tactics employed by the Japanese and Koreans when they entered the USA car market decades ago should be used again for plug-in vehicles (PEVs). But the established dealerships of Chevy and Nissan have no reason to try to build a PEV business in that manner, and GM and Nissan don’t push them to do it.

Better markets elsewhere and products that are hard to sell can’t be the whole reason why the toughest salesmen fail to sell electric cars, though. If they wanted to sell them, they would sell them — but they don’t.

To explain this, I have a wild-ass guess (WAG), just a gut feeling that might have some truth at its core. The slowdown of dealer sales started in 2014, when Tesla became successful and refused to sell through dealers. If dealers in their mind equated Tesla and PEVs as the same thing, they may well have developed an aversion against selling PEVs. Then it probably went from “Tesla is the enemy” to “PEVs are the enemy.”

2019 Prediction

With this in mind, we can look in a completely different way at the sales expectations for 2019.

I have made a list of most models that are new (or refurbished enough to be attractive again). Some have officially entered the market in the last month or few months. In reality, 2019 is when sales begin in earnest. Mini and VW have a bit of a reputation using sliding windows in their planning. But it appears they have at least started the preparations.

Brand	Model	Battery (kWh)	Price
Audi	e-Tron	95	$ 75,000
BMW	i3	42	$ 45,000*
Hyundai	Kona EV	64	$ 38,000*
Hyundai	Ioniq EV	39	$ 34,000*
Jaguar	I-Pace	90	$ 69,500
Kia	e-Niro	39-64	$ 40,000*
Kia	Soul EV	39-64	$ 38,000*
Mercedes	EQC	80	$ 70,000*
Mini	Electric	42	$ 30,000*
Nissan	Leaf E-Plus	60	$ 35,000*
Porsche	Taycan	90	$ 90,000
VW	ID Neo	48	$ 30,000*

*Prices are determined after extensive studies using tea leaves, different crystal balls, laying the tarot, and drawing each car’s horoscope. If at some future date a dealer (or, heaven forbid, a carmaker) decides to use a different price, the stars are at fault. You can not hold me responsible (I don’t know what that is).

These are all models that can do very well in their segment, if a serious effort is made to sell them. For the reasons discussed above, I doubt that will be the case.

They are all production constrained by their battery supply and overly careful planning. Overstock is the nightmare of every production planner, and they don’t yet believe in the market potential of these cars like we do.

My guess is they will all sell twice to 10 times as much in Europe as in the USA, even with the stiffer competition of the cars that will enter the European market besides these models, vehicles shown in the next table.

Brand	Model	Battery	Price
DS	3 Crossback E-Tense	50	€ 35,000*
Opel / Vauxhall	Corsa	60	€ 30,000*
Peugeot	208	60	€ 30,000*
Peugeot	2008	60	€ 35,000*
Renault	Zoe (next gen)	50?	€ 27,000*
Seat	e-Mii	37	€ 20,000*
Skoda	e-Citigo	37	€ 19,000*
Tesla	Model 3	50-75	€ 37,000–80,000*
VW	e-Up!	37	€ 21,000*

Beside these cars I expect 1 or 2 surprises from Nissan and Renault. They are in the habit of starting production before they announce the car to the public and have some SUV or CUV in the pipeline. Or perhaps we will see an unexpected offering from a Japanese or Chinese carmaker.

The DS 3 and the Peugeot 2008 are direct competitors to the Kona EV and e-Niro. The other Europe-only cars are too small for the US market.

With these New Year’s lists ought to come a prediction on sales and market growth. With all of these new entrants, 2019 will be a very interesting year, both in the USA and in Europe. My hope is the carmakers will surprise us with a capacity for high-volume production, that buyers have enough choice of models with decent range, charging speed, and a useful charging network.

I expect sales of 400,000 in the USA and 600,000 in Europe, and I hope I am completely wrong, that the numbers will be far higher.