Breakthrough for electric vehicles

Breakthrough for electric vehicles

The sales boom of purely electric vehicles (Battery Electric Vehicle, BEV) is reaching new dimensions in Austria - with a current market share of 18%, they have now reached the mass market. Production by European car manufacturers is also picking up speed again. This is shown by the “Electric Vehicle Sales Review” by PwC Autofacts and Strategy&, PwC's strategy consultancy, in which the new registration figures in 20 selected markets worldwide are evaluated. Accordingly, 65.6 percent more BEVs were sold in Austria in the second quarter of 2023 than in the same period last year - specifically, that is 12,137 newly registered vehicles. This is a significant jump compared to the first quarter of this year, in which the increase was 56.8 percent - and thus 11,235 BEVs sold. “This development is strongly supported by the continuous expansion of the charging infrastructure by various players,” explains Johannes Schneider, partner at Strategy& Austria.

Hybrid vehicles continue to dominate in Austria with a market share of 20.6 percent. A total of 26,079 hybrid models were newly registered in Austria in the past six months. With 8,812 vehicles sold, plug-in hybrids (PHEVs) account for 7 percent of all new registrations in the first half of 2023. In total, electric vehicles (BEV, PHEV and hybrids) account for 46 percent of the overall market with 58,263 new registrations in the first half of 2023. The three largest European markets - France, Germany and the United Kingdom - are also at the tipping point to become mainstream, with a BEV market share of around 16 percent each and increases of between 32 percent and 48 percent in the first half of this year compared to the same period last year. At 2 percent, Norway's BEV sales have the lowest year-on-year growth of the countries examined, which is due to an already saturated BEV market - with 83.1 percent, BEVs have the largest market share worldwide here.

After the pandemic and chip shortage, production by European car manufacturers is now picking up again, but at the same time incoming orders are falling slightly. OEMs therefore have to reduce their production or discount their vehicles more heavily. Car manufacturers on the German market are increasingly relying on discounts and are also granting them for BEVs. For example, the average price discount for BEVs in the premium segment increased by 26.6 percent within a month and was 13.8 percent in July this year. "The break caused by a lack of chips, which artificially limited the BEV supply and, not least, brought large profits to European manufacturers, is over," says Günther Reiter, Automotive Leader at PwC Austria, and continues: "The early adopters and convinced buyers have stocked up. Now the mainstream buyers are taking action, but they have stricter criteria in terms of product and price." In the end, those brands that control their supply chains as is usual with combustion engines and convince the volume market with vehicles suitable for everyday use will emerge as winners.

While German car manufacturers had to give up their dominant position in the overall Chinese market in the last quarter, they can still maintain their position in their home market. In June, they together had a market share of over 45 percent and accounted for three of the five best-selling car brands. The most successful Chinese producer MG has a 3.7 percent market share. However, the MG 4 is already in seventh place in the ranking of the most popular BEV models in the four most important EU markets of Germany, France, Italy and Spain in the first half of 2023 and is therefore ahead of the Volkswagen ID.3, Renault Megane Electric and Audi Q4 e-tron. The ranking is dominated by the Tesla Model Y, followed by the Fiat 500e in second place and the Volkswagen ID.4 and ID.5 in third place.

The ramp-up of battery cell production in Europe is making great strides. The Chinese market leader CATL has opened a factory with an annual storage capacity of 14 gigawatt hours in Arnstadt, Thuringia, after five years of construction. An even larger plant is planned in Hungary. “With CATL’s German production capacity alone, 200,000 plug-in hybrids can be equipped, which is almost a fifth of all vehicles produced in Germany,” says Strategy& expert Schneider. However, German manufacturers in particular are now faced with the question of whether they should become heavily dependent on battery suppliers who offer favorable conditions for exclusive purchases in order to reduce costs in the currently critical phase. Or whether they should resist advertising and regain strategic control over the supply chains in the long term by setting up their own production.