Europe’s auto market saw diesel share fall below 20% for the first time in Q2 2021 from nearer 30% a year ago. Meanwhile plugin electric vehicle share more than doubled year-on-year to 16.9% in Q2.
This is our first report drawing on quarterly powertrain data from the European Automobile Manufacturers’ Association (ACEA). The data region is EU + EFTA + UK and counts all passenger autos, with Q2 recording 3,405,804 total sales.
For those wanting more granular coverage, our regular monthly Europe reports include timely market share data for plugin electric vehicles, including detailed data on the best selling plugin models and brands. (Note that the monthly Europe report draws upon a slightly larger data region, including Ukraine and Turkey).
The ACEA quarterly data graphed above has the advantage of tracking the market share of all powertrain types, so we can see the entire market’s evolution over time. The quarterly resolution has a consolatory silver lining of smoothing the erratic month-by-month results of those automakers who mainly deliver at the end of each quarter (Tesla, for example).
Diesel In Decline, Electrification Gaining Fast
Europe’s diesel share of new sales dropped dramatically to 18.4% in Q2 2021, from 27.9% in Q2 2020. That’s a huge one-third cut in share over the course of 12 months. At this rate, diesel will be below 10% share in Europe by Q4 2022 or Q1 2023.
Diesel share peaked in Europe in 2011 with a huge 55% of the market, but started falling after the late-2015 diesel-gate scandal. Still at almost 35% share at the end of 2018, diesel’s rate of decline has dramatically accelerated over the past two-and-a-half years due to the rapid growth of electrification, especially plugins.
Plugin electric vehicle powertrains have more than doubled their market share over the past year, hitting 16.9% in Q2 2021, from 8.4% in Q2 2020. The combined plugin result of 16.9% was slightly weighted towards pure electrics (BEVs, totaling 289,625 sales) at 8.50%, with plugin hybrids (PHEVs, 284,940) contributing 8.37%. Both categories roughly doubled their share from a year ago.
Non-plugin hybrids (HEVs) also doubled their share (to 20.3%) helping to speed the decline of diesels. Note that, despite eating into non-electrified combustion powertrains, HEVs themselves are also only a temporary quick-fix to reducing emissions, and have no long term future in Europe. The EU is mandating an end date of 2035 for sales of any non-plugin powertrains, and most European markets are anyway moving towards plugins much faster than this.
As a reminder from our latest monthly report for Europe, here are the most popular plugin models year-to-date (this model data includes the markets of Ukraine and Turkey):
Forecast For Remainder Of 2021
Europe’s Q1 and Q2 trends in powertrain share demonstrate a very positive track for the growth of plugins. In all recent years, the second half of the year shows a further substantial uptick for plugin share.
If last year’s trendline serves as a decent guide (see top graph), we can estimate that Q3 2021 will see plugins accelerate to close to 20% share, and there’s an odds-on chance that we will witness 25% share or higher in Q4.
Is this too ambitious for Europe’s Q3 and Q4 2021? Will the ramp up of plugin vehicle production volume (and battery production) be able to keep pace with this kind of demand? If available volumes do prove to be a temporary bottleneck, will prospective buyers simply refuse to buy another combustion vehicle and simply wait a little longer for a plugin to come available?
Even if buyers do have to wait for a plugin to come available, their steadfast refusal to waste money on another combustion vehicle (which we have dubbed, “the Osborne Effect“) will still boost the relative share of plugins. How do you think it will play out? Please share your thoughts in the comments below.