Germany’s Plugin EVs Continue To Grow, Despite Headwinds

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Europe’s biggest auto market, Germany, saw plugin electric vehicles grab 25.3% share in May 2022, from 23.4% YoY. Full battery electrics increased their share by close to 1.25×, whilst plugin hybrid share dipped slightly. Overall auto volume fell 10% YoY, and was down by 35% from the 2018–2019 seasonal average.

Market Share Trends

May’s total plugin result of 25.3% included 14.1% battery electrics (BEVs), and 11.2% plugin hybrids (PHEVs). This compares to 11.6% and 11.8%, respectively, twelve months ago.

In terms of unit volumes, BEVs were up 9.1% YoY, and PHEVs were down 14.8%. With the broader market volume down 10.2%, combustion-only powertrains took the biggest YoY hit, with a 15.7% drop in volume. Their combined share now stands at 56.4% from 60% a year ago. We can expect this to fall to close to 50% by the end of Q3 2022.

Recall our report from last month noting that German auto production fell 14% in March, with an overall drop in capital goods production of 6.6%. And with high inflation, auto manufacturers also said they are passing on higher costs to consumers, thus affecting demand.

Despite significant supply chain disruptions and cost increases, VDIK president Reinhard Zirpe claimed “order backlogs are reaching a historic record level. This shows: Customers want to buy cars, but the industry can only deliver to a limited extent.”

If this is supposed to imply that auto demand is at the same volume as it always has been — despite significant consumer-facing inflation and economic uncertainty — colour me skeptical. I would think the best we can say is that both demand and supply are significantly down, but supply is doing worse, so waiting lists are growing.

Best Sellers

Unfortunately we don’t yet have the KBA data release on the top selling models in May. Jose will have a detailed report later this month.

Meanwhile, here’s a reminder of how the trailing 3-month bestsellers chart looked at the end of April (repeat — not the latest data).

With the Shanghai gigafactory’s production disrupted in recent months, it’s likely that Tesla’s dominance has been eroded in May, though it will quickly resume strength by the end of Q3.

Outlook

The economic pressures have not let up in Germany, with supply chain disruptions and cost inflation (particularly of energy) hitting hard on the auto industry.

Nevertheless, with road-fuel prices also at record highs, interest in plugins is at an all time high, and interest in non-plugins is at a relatively low ebb. Plugin production capacity — in part due to supply chain disruptions — is however inadequate to supplying all the vehicles that customers want.

So whilst volume growth of plugins will not be impressive this year, their market share — relative to other powertrains — will continue to climb at a healthy clip. At the moment, I estimate that we should see above 40% plugin share by December, though in an auto market perhaps 30% down in volume from pre-covid norms.

What are your thoughts on the German, and broader European auto markets? Please jump in and join the discussion below.