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UK Starts 2022 Above 20% Plugin EV Share — May End Close To 50%

The UK saw plugin electric vehicle share hit 20.4% in January 2022, up from 13.7% in January 2021. Full battery electrics almost doubled their share year-on-year, to 12.5%. Diesels continued their retirement walk, with just 5.2% share, from 12.3% year-on-year. Overall auto volumes recovered slightly from last year, but were still down by around a quarter from long term seasonal norms, at 115,087 units.

 

January’s combined plugin result of 20.4% comprised 12.5% full battery electrics (BEVs) and 7.9% plugin hybrids (PHEVs). This 61:39 weighting represents a slight, temporary, dent to BEVs compared to recent weightings, mostly due to Tesla’s BEVs not delivering in significant volume at the start of the quarter.

A year ago, the two categories were evenly weighted. Since then BEVs’ share has nearly doubled from 6.9% in January 2021, to 12.5% last month. PHEVs meanwhile only grew from 6.8% to 7.9% share over the same period. BEVs are thus the outstanding growth story in the UK auto market.

Smoothing out the monthly variance, the trailing quarter’s plugin share stands at 27.1% (up from 18.3% YoY). BEVs alone constitute over two-thirds of that, at 18.2% (from 11.4% YoY).

Diesel-only powertrains continued towards their exit, down to 5.2% share from 12.5% YoY. Diesels are still on track to be barely detectable as a trace (around 2.5% or less) by the end of this year.

Petrol-only powertrains had a slight reprieve in January, but have still lost a relative 10% of their share YoY (49.8% to 44.7%). As diesels get out of the way, we can expect the continued growth of plugins to eat into petrol-only share ever more strongly over the next couple of years.

Plugless hybrids (both HEV and 48v mild) are the closest stepping stone for laggard manufacturers to hop to, on the way to full electrification, and they grew from 24.2% to 29.7% share YoY. Obviously these have no long-term future either, as the industry moves towards all plugins, and eventually to all BEVs.

UK’s Popular BEV Brands

With Tesla habitually absent at the start of a quarter due to juggling international logistics, Kia, Mercedes, and Volkswagen, took the top three spots in the monthly brand rankings:

In a RHD market like the UK, there’s plenty of variability to monthly delivery shipments, across many brands, so the above shares alone don’t reliably indicate long-term patterns.

We can take a step back and look at the trailing quarter performances, for a more stable view of which brands the UK’s BEV buyers are choosing:

Obviously Tesla continues to strongly dominate, and took 21% of the UK BEV market over the past 3 months, almost three times the share of runner up Volkswagen. Recall that the Tesla Model 3 was the second highest selling vehicle in the overall UK market in 2021.

Of the other volume brands, BMW, Mercedes, Nissan, and Mini, have been steadily climbing the rankings since Q3 last year. Shout out to Porsche’s climb also, though it’s not a volume brand. Over 30.6% of Porsche’s January UK sales were BEV (and many of the others were PHEV), far ahead of the overall market.

Others brands which are significantly growing over the past half year, and worth keeping an eye on, are Polestar and Volvo, though they are still in the second half of the table, each less than a tenth of Tesla’s volumes.

In terms of manufacturing groups’ BEV market share over the trailing quarter, the competition is much tighter, with Tesla scoring 21.0% share and VW Group scoring 19.1% share, each barely changed from last month.

Tesla estimates that any Model 3 ordered today in the UK can be delivered before the end of March, so less than two months’ wait. For VW Group, on the other hand, many of its BEVs have a 12 month waiting list, according to reports from UK auto leasing companies.

The same long wait applies to several other non-Tesla brands’ BEVs. If Tesla’s competitors would increase their production volume, they would certainly grab more market share. How much more? Who knows? The demand for BEVs is very high in the UK (and throughout Europe), and only Tesla is so far serious about tapping in to that demand.

UK EV Outlook

BEVs are growing strongly in the UK now, and should consistently grab around 20% share (or higher) by June, catching back up to their 2021 Q4 peak share. With PHEVs looking to be treading water around 8% share recently, those contributions should give a combined plugin monthly share of just under 30% at the end of H1.

In the second half of this year I expect to the supply of BEVs improve further, and perhaps the supply of PHEVs also. I would estimate that in September we could see combined plugin share in the mid-30% range, and into the mid-40% range in the December peak. There’s a decent chance of that peak result getting closer to 50% than 40%!

The full year 2022 plugin result should work out to right around 30% share, and above 40% in 2023.

Much of the plugin share gains will be due to the accelerating exodus away from combustion-only powertrains, rather than simply relying on exponential growth in plugin production volumes. We have referred to this aversion to purchase the old technology, even if it requires waiting for the new technology, as the “Osborne Effect.”

The UK’s industry association, the SMMT, is projecting that 2022, and 2023, will climb back towards 2019’s volume of 2.3 million units, with 1.9 m and 2.125 m, respectively.

I think that’s far too ambitious, given the Osborne Effect mentioned above. I’d expect this year and next to both be around 1.75 m at most, if not barely changed from the 1.65 m of 2021. It’s even possible that overall auto volume decreases over last year, as more and more people join a queue for a future BEV.

What do you think? Are you on a waiting list for a BEV in the UK (or elsewhere in Europe)? If so, what was your wait time when you joined the queue? Please share your experience in the comments.

 
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Max is an anthropologist, social theorist and international political economist, trying to ask questions and encourage critical thinking about social and environmental justice, sustainability and the human condition. He has lived and worked in Europe and Asia, and is currently based in Barcelona. Find Max's book on social theory, follow Max on twitter @Dr_Maximilian and at MaximilianHolland.com, or contact him via LinkedIn.

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