France, Europe’s second largest auto market, saw plugin electric vehicle share of 24.4% in December, a new record high, with pure electrics taking 14.6%. Diesel meanwhile dropped to a new record low of 17.4%. The overall auto market, at just under 160,000 units, was down some 15% from pre-pandemic seasonal averages.
December’s record 24.4% result for combined plugins comprised 14.6% full electrics (BEVs) and 9.8% for plugin hybrids (PHEVs), continuing a shift towards BEVs over recent months, while PHEVs’ share has almost plateaued over the past 6 months.
The 2021 Q4 share for combined plugins was 23.7%, up from 15.4% in Q4 2020. BEVs have grown share more steeply, from 8.4% in Q4 2020 to 13.8% in Q4 2021.
Diesels meanwhile hit a record low share of 17.4% in December, and 18.3% in Q4 overall, down from 26.5% and 29.4%, respectively, in 2020.
In terms of absolute sales volumes, BEVs’ Q4 performance has also remained relatively strong, increasing 37% year-on-year (to 55,175 units), in the context of overall auto market volume falling 17.5% year-on-year. For example, diesels’ Q4 2021 volume (73,029 units) was just 51% of what it was in Q4 2020 (see the foot of the article for a sales-by-powertrain graphic).
Here’s the powertrain share evolution over the past two years:
Top 3 BEV Models Of The Moment
Unlike last month, we haven’t been blessed with early industry publication of December’s detailed model data. When that data comes available later this month, keep an eye open for Jose’s update. We do have some limited data for the few models which are both BEV-only and popular enough to appear in PFA’s overall top 100 autos list.
Smoothing out the erratic monthly logistics variables, the trailing 3 months’ best selling BEVs in France were as follows:
Tesla made its usual end-of-quarter push with the Model 3 in December, but remained behind the Renault Zoe and Dacia Spring in Q4 overall. Side note; the Tesla Model Y appears not to have been prioritized in France in December, seeing only 292 units (from 642 in November).
We can’t yet calculate the full year scores for a wide spectrum of models (to create a decent ranking), but we already know that the Tesla Model 3 and Renault Zoe closely competed for 2021’s top spot, with 24,911 and 23,573 units respectively. The Peugeot e-208 has almost certainly taken 2021’s #3 spot (an estimate ahead of actual December data), with likely close to 18,000 units for the year.
Note though that the Dacia Spring newcomer is right now doing twice the current volumes of the Peugeot e-208, yet has only accumulated 11,386 full year. If we want to understand the present and near future of the fast changing BEV landscape, monthly and quarterly data is more relevant than full-year data.
From the current snapshot, we can expect the Dacia Spring — Europe’s most affordably highway-capable BEV — to dominate the French market in H1 2022.
France’s plugin share over the past 3 months has grown steadily, but has not matched the steep final-quarter uptick we have become accustomed to in previous years. The good news is that this is largely due to PHEVs not growing strongly from Q3 to Q4 (8.9% to 9.8%), whilst BEVs are in fact still growing very strongly (10.2% to 13.8%… in just 3 months). BEVs are the only powertrain in the longer-term future of passenger vehicles, so their continuing strong growth is what matters most.
What can we expect to see in 2022? There are a couple of schools of thought on this. Electric vehicle skeptics believe that Europe’s recent surge in plugin share has mainly been driven by the relative tightening of 2020 and 2021 emissions regulations, applying to auto makers. Since that regulatory tightening will only proceed relatively more gently in 2022 to 2025, that assumption is that auto makers will only tread-water and move gradually over the next two or three years. So the claim is — the last two years of sharp growth is over.
Dacia Spring. Image Courtesy: Dacia
The other school of thought — the one that most proponents of plugins, including we at CT, follow — is that EVs are an inherently better and more economical technology for consumers compared to ICE-only vehicles, and the transition will be consumer-led. Thus, once the cat is out of the bag and consumers are aware of EV’s advantages, it is consumer demand which will ultimately shape the transition.
A key point here is the dynamics of supply and demand in the crux of the transition; as consumers increasingly notice that the newer better technology is available, they increasingly perceive the older technology to be obsolete, and stop buying it.
Even if high production volumes of the new technology are slow to roll out (witness the very long waiting lists for almost all BEVs), that doesn’t mean that consumers will resign themselves to buying yet another example of the now-obsolete technology. They will instead just hold on to their existing vehicle longer, and wait patiently for a plugin.
Many readers will remember the same transition dynamics occurring with the advent of smartphones some 15 years ago. Of course a new car costs tens of thousands of Euros, so consumers will be even more vigilant in their choices.
That’s the consumer-demand-led theory. What’s happening on the ground?
Every new car buyer in Europe is now aware of plugin vehicles, the automotive media, whether in print or video, are all over them, and there are now dozens of compelling models available, at ever lower price points. The Dacia Spring’s surging popularity in France is just one example of this. This tells us that the cat is certainly out of the bag on EV awareness and consumers are seriously interested in these vehicles. Most current surveys have a majority of prospective car buyers looking to get into an EV for their next purchase.
On the flip side, the sales of non-plugin vehicles are seriously down from their peak in 2017:
So, the range of evidence; surging awareness of, and interest in, plugins; precipitous drop in sales of non-plugins; and very long waiting lists for BEVs; together support the consumer-led transition theory.
There are confounding factors like the pandemic, and the much talked about “chip shortages” (which may be a fig leaf for actual falling demand for non-plugins). But behind the noise, there does appear to be a clear signal that the transition is now in full effect.
Is so, we can expect the transition to continue along at a brisk pace. If the tide is turning, auto makers who want to continue in business will have to follow consumer demand, or simply go out of business for lack of sales, or rapidly diminishing sales.
For every manufacturer who tries to hold back the tide, there are others which will follow consumer demand. The latter include Tesla, and other international BEV-forward brands (Polestar, BYD, and several others), and the talking-up-the-transition large manufacturers like VW Group. There are also plenty of low-cost manufacturers in China, many of them international joint-ventures (like the Renault Group’s Dacia Spring) which are capable of serving the more affordable end of the market.
To be on the wrong side of history in a technology transition is not a good business plan — just ask Kodak, or Nokia (amongst many others).
Overall, we can expect the share of plugins to continue at pace in 2022 and 2023. Even if plugin volumes don’t ramp all that fast, the continuing fall in fossil-only volumes will mean that the plugin share of the market will continue to increase rapidly. This in turn will force manufacturers to continue to transition their offerings to plugins, if they want to remain relevant, reinforcing the transition.
If you were to twist my arm to put a number on it, given how things look right now, I would expect that monthly plugin share in France will be at least 35% by last couple of months of 2022, and at least 45% by late 2023. What do you think? Please let us know in the comments.
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