Electric car sales shoot despite the late release by manufacturers due to Covid -19

Europe saw a surge in electric and hybrid car sales towards the end of 2020. Car manufacturers had been preparing to change their manufacturing dynamics from ICE (internal combustion engine) cars to hybrid and electric cars, following the governments’ directive to cut the production of carbon-emitting vehicles.

However, the expansion of the EV and hybrid sales was abruptly cut short by the emergence of the global, deadly coronavirus. Car assembly was halted as governments ordered total lockdowns across the globe. This led to delayed production of new cars and distribution of ready ones.

When Covid-19 cases were controlled, governments opened up economies. Manufacturers were in a rush to release their car models, and consumers dashed to procure their favorite emission-free models. The result was a spike in hybrid and EV car sales towards the end of 2020. According to research conducted by Bernstein, 300,000 of 730,000 battery EVs ordered before Covid-19 struck were delivered in the last three months of 2020.

Some carmakers met their yearly target despite the late release. For instance, Daimler hit its target sales through a collective effort to drive its sales right as the year ended. Others like Volkswagen missed their target, but only with a small gap. Jaguar Land Rover faced a couple of problems in 2020. Firstly, when Covid-19 struck, the company’s supply of raw materials was cut short. Towards the end of the year, the carmaker announced it was halting production in Castle Bromwich. Jaguar managed to sell its Jaguar I-Pace EV, which accounted for 69 percent of the company’s car sales in Western Europe for December.

Government rebates for EVs contributed to the late success. For example, in Germany, the government has tripled the subsidies offered when consumers purchase EVs. An electric car buyer will pocket €9000 in a discount when they buy a new car.

According to figures released by Germany’s car market leader, AutoScout24, searches for EVs rose by 80 percent in the second half of 2020. Data also showed that for all the cars sold in 2020, 13.5 percent were electric.

“Incentivisation obviously has played a very important role in 2020 to really push electrification over a kind of tipping point,” said Pieter Nota, sales chief at BMW.

Government rebates alone cannot sustain the high sales. Countries have to expand their charging infrastructure to ensure car users have a reliable supply of power. “The next few months will show whether demand can continue at this high level. The decisive factor here will not be the cost subsidies alone, but also the expansion of the charging infrastructure,” said Jochen Kurz, a director at AutoScout24.

Governments scheduled bans on conventional cars has also driven the high EV sale. After the UK announced its plan to ban petrol car sales by 2030, the search for EVs on online car sales doubled, revealed Autotrader. In 2020, 16 percent of all car sales were either electric or hybrid.

Hyundai sold the highest number of EVs in Europe last year. The company sold 13 percent of the total EVs sold across Europe, courtesy of its well-known EV, Kona model.

 According to Matthias Schmidt of Schmidt Automotive Research, the crown for the most registered electric car model went to Renault’s Zoe model. The French carmaker’s model surpassed Tesla’s Model 3 and Volkswagen’s ID.3, accounting for 95 percent of the total EV sales in Western Europe. Tesla sales across Europe fell by 16 percent. Pandemic lockdown interrupted the distribution of cars from assembly factories to consumers across Europe.

BMW intends to double its electric car sales this year. “We aim to increase the sales of our electrified vehicles by more than half in 2021, and that underlines the importance of electromobility as a major growth driver in the company,” said Nota.

Hybrids use both the combustion engine and battery to power their propulsion. Critics have disregarded hybrid vehicles claiming they solely rely on the ICE and only a small distance is powered by electric power. “I would expect that hybrids will go down rapidly when fiscal stimulus is reduced. When the subsidies end for hybrids, no one buys them because it’s not the real thing,” said Markus Duesmann, Audi CEO.

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