First, this meme from the Tesla bears is false. They do buy Tesla cars, in reasonable numbers.
Second, due to a minuscule construct of nucleic acid encapsulated in proteins (aka Covid-19), there is no supply of freshly made vehicles.
Third, and this is the reason overblown by the bears, after years of only having Tesla as a mature fully electric vehicle (BEV), there are now more choices.
This last reason is what this article is about.
There is a huge misunderstanding about the EV market. What a sensible EV is, is often discussed. But people are not sensible, they are not rational, and buying a car is mostly an emotional decision. If it was rational, 90% of the vehicles on the road would be Volkswagen Golf size or smaller.
In Europe, this size is about the average, mainly because bigger is too expensive. In the USA, the Golf is not really for sale, because it is too small.
About a decade ago, when battery prices were far too high to make a mass-market BEV, we saw three solutions for the battery price challenge. The Leaf had a tiny, cheap battery and a short driving range. The Volt had an even smaller battery with a gasoline range extender. The Tesla had a choice of 40 kWh, 60 kWh, and 85 kWh batteries for a price that put it out of reach for most people.
The Leaf never reached the 250,000 sales per year in the USA that was expected. The Volt is history. The best-selling Model S was the most expensive, 85 kWh model. The 40 kWh model was never produced because of lack of demand. The Leaf was stuck at a tiny market share in a huge market. The Tesla conquered a huge market share in a tiny market.
In 2012, the lesson was clear. At least for those who could read the writing on the wall. To be more than a small, niche product, an afterthought of marketing, you need to have at least the same capabilities as the fossil fuel vehicles you are competing with. The Tesla Model S now has a 100 kWh battery, and many people hope for an announcement of an even bigger battery.
The Modern Age of the BEV
While the Chevy Bolt was the first non-Tesla with a decent range for an affordable price, it lacked superfast charging capability and was never offered in decent volume in Europe. The Jaguar I-Pace was the first serious contender in late 2018. Together with the Hyundai Kona EV and Kia Niro EV, it was the start of the modern age of the BEV. At last, there were mature BEVs other than Teslas in the market.
Look at the following table of BEV sales in Norway this year. It is not about the May sales numbers. For that, you should wait for José Pontes’ analyses in a few days.
This is about what the many new models that are entering the market are doing. More choice, lower costs, better cars. In the list, the new models are green and the models that were recently rejuvenated with at least a bigger battery pack are yellow. We have not seen a list like this before. Gone are the shopping carts or glorified golf carts. These are all vehicles up to the job.
The Audi e-tron started selling in volume when the smaller-battery, lower-priced trim entered the market. The smaller battery was not relative to the far bigger reduction in price, creating a very different value proposition.
The Model 3 is already 15 months old. That is middle aged in this market. The oldies, VW e-Golf and Opel Ampera-e (Chevy Bolt), are at the end of their lives and heavily discounted. The BMW i3 is the only older BEV that has stayed relevant without a battery upgrade in recent months or large discounts. It’s a unique proposition, as it always has been.
Norway is the most important BEV market outside of China. It is the first market for most new models. Many of these are not yet for sale in most of the EU countries. The reason it gets priority is not that the volumes are so high. The reason is that it’s extremely difficult to sell non-electrics there. Thus, what we see is a more normal auto market, a market with a number of different models in every segment to choose from. In the next 12 months, at least another dozen models will enter this market. Among them are the VW ID.3 and VW ID.4, the Polestar 2, the Ford Mustang Mach-e, and let’s not forget, the Tesla Model Y — production in Brandenburg could start in another 12 months.
What is happening in Norway now will be happening in other European markets in the next few months. It is great that this will be supported by the many new incentives to help the economy recover from the Corona dip.
Looking at this table, I get excited about the future. Reading José’s articles about the different markets make me long for real, meaningful numbers. They suggest growth rate in the triple digits, and not all starting with a “1” or a “2.” Is the S-curve really starting to climb in many European countries?
I am not only angry at Corona because it locked me up for months. It also made my dear tables of BEV sales in Europe nearly meaningless. The market is really FUBAR.
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