Review of Europe's new energy vehicle market in 2019 and outlook for this year

China's new energy vehicles did not start very well in 2020. At present, Europe should take two steps forward in 2020. In 2019, Europe's new energy vehicles reached 564,200 units, an increase of 38.9% from 407,000 units in 2018. It is still possible to hit 1 million in 2020. However, we should see that the volume of Tesla Model 3 in Europe is 95,240 units, which accounts for 60% of the increase. If the Model 3 is removed, the growth rate will drop to 15%.

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The growth of the European new energy vehicle market
                                
can be seen from the figure below. In 2018, less than 100,000 units were sold per quarter, and in 2019, each quarter was more than 130,000 units. In the fourth quarter of 2019, the sales reached nearly 164,000 units. If we divide the PHEV and BEV of different brands, Tesla's Model 3 can be pulled out as a separate category. In 2019, the sales volume in Europe was 95,247 units, with a market share of 17%. In 2019, we saw the efforts of European car companies in the local market. They still made considerable efforts in PHEV and BEV, but the overall growth was not particularly satisfactory. 

Figure 1. Growth of electric vehicles in Europe by quarter 

The top 10 new energy vehicles in Europe are shown below. The LEAF, which ranked top in 2018, is the only model that has regressed. Compared with 2018, only 3 PHEVs are in the top 10 in sales. The biggest change in 2019 is that all the popular models are concentrated on pure electric models. Audi's E-tron and Hyundai's KONA performed well, while popular models such as Model 3 directly opened up a large gap. Of course, Tesla's sales of Model S and Model X in Europe are still declining. In 2018, there were nearly 30,000 units. With the substitution effect of Model 3, it has dropped by about 45% to about 16,000 units. The sales of PHEVs that were not fully prepared during the WLTP operating condition switching process also suffered certain losses. 

Figure 2 Comparison of best-selling new energy vehicles in Europe in 2019 and 2018

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Market by country

At present, the new energy vehicle market in Europe has been divided into the first and second echelons, and there are also some car markets without policy encouragement. The first echelon includes Germany, Norway, France, the Netherlands and the United Kingdom, especially Germany and the Netherlands, which grew rapidly last year; in 2019, Germany's new energy vehicle market reached 108,629 units, an increase of 61%. Germany is currently the largest electric vehicle market in Europe, and the Netherlands has increased by 146% to 66,600 units.

Figure 3 Sales of new energy vehicles in Europe by country 

These five countries can be divided into two categories: Norway and the Netherlands mainly adopt tax exemption policies such as purchase tax, ownership tax, and value-added tax, and provide different degrees of exemption for BEV and PHEV. Germany, the United Kingdom, and France adopt policies mainly including tax exemption and car purchase subsidies.

The specific measures are shown in the table below. Many of the measures will expire in 2020, and there will be a rush to buy cars. This can actually be understood as the cultivation measures taken by consumer-oriented markets and countries with automobile industries such as the UK, France and Germany will be longer. For example, Germany has extended subsidies for electric vehicles, and a lot of the money here is paid by the car companies themselves. 

Table 1 Policies of major European countries selling new energy vehicles

Therefore, in the long run, as several major automobile markets will continue to grow after 2020, A00-class pure electric cars will gradually develop into a trend in countries such as Spain and Italy. However, this will still require certain support from the government. 

Figure 4 New energy vehicle sales in five major countries 

Due to battery costs, incentive policies and other reasons, we have seen that starting from 2019, PHEV began to be at a disadvantage compared to BEV under favorable market conditions, especially in the Netherlands. With the improvement of charging infrastructure and the increase in electric vehicle range, countries with smaller land areas have a very high proportion of pure electrification. 

Figure 5 Sales ratio of PHEV and BEV in major European countries 

In the December market, Chinese electric cars also started to be sold in Europe. MG's EZS sold 967 units in the Netherlands, which is a sign of success.

Summary: The European market is currently the point where everyone is looking forward to the explosion of new energy vehicles. If it can really reach a scale of 1 million by 2020, it will be very beneficial to the long-term development of new energy vehicles, especially since Volkswagen has invested heavily in Europe to promote this process.