Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: All or nothing: Why circular business models require a holistic approach
    • Capgemini: Invent Head on automotive takeaways from CES 2023
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • Capgemini: The circular economy is spurring new thinking on EV batteries
    • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Automotive News Europe
September 22, 2018 01:00 AM

EU electrified car push is driven by rules, not market demand

Nick Gibbs
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    The Jaguar I-Pace is the first full-electric model from an established automaker with the performance and price tag to challenge Tesla. Others will follow soon.

    Automakers are pouring money into electric vehicles as local and Europewide legislation pushes them to electrify their lineups with different combinations of battery technology — whether they want to or not. The small number of EVs available, either full-electric cars or plug-in hybrids, is slowly increasing as the battery technology improves and battery costs decline.

    This year, Jaguar launched the I-Pace, the first full-electric model from an established automaker with the performance and price tag to challenge Tesla. In the volume sector, Hyundai introduced long-range capability -- up to 480 km (298 miles) -- with the Kona EV SUV.

    German premium brands are launching their fight back against Tesla - Audi with the e-tron SUV and Mercedes-Benz with the EQC. The choice of high-end, long-range (400 to 500 km) electric cars will expand further when Porsche launches the Taycan sedan.

    Reuters
    Daimler unveiled the near-production EQ SUV at the Paris auto show.

    Electric cars are perceived to be image-boosting. Whether that is a result of Tesla's efforts or a backlash against polluting diesels is difficult to say. But over the past 12 months, automakers looking for positive publicity have made bold promises to electrify their global fleets in the midterm.

    • By 2023, 86 percent of all PSA Group's models will have an electric or plug-in option.
    • By the end of 2022, Fiat Chrysler Automobiles will have launched more than 30 nameplates with electric drivetrains.
    • Starting in 2019, every all-new Volvo launched will have some form of electrification. This will include 48-volt mild hybrid, plug-in hybrid and full-electric powertrains. Volvo's headline-generating announcement, made July 2017, inspired many others to follow suit.
    • Renault plans to launch eight full-electric models and 12 electrified models by 2022.
    • The Volkswagen Group has announced it will launch 25 electric vehicles by 2020 and plans to sell up to 3 million EVs annually by 2025.
    • By 2022, Ford will have 16 dedicated battery-electric vehicles globally.
    • Also by 2022, Daimler will electrify the entire range of Mercedes cars.
    • Every new Jaguar Land Rover vehicle will be electrified by 2020.
    • One-third of all Maseratis will be electrified by the mid-2020s.
    AUTOMOTIVE NEWS EUROPE MONTHLY MAGAZINE

    This story is from Automotive News Europe's latest monthly magazine, which is also available to read on our iPhone and iPad apps.You can download the new issue as well as past issues by clicking here.

    Legislatively driven

    These bullish announcements suggest an enthusiastic switch to electric, but the reality is somewhat different. For many automakers, the word "electrified" encompasses mild hybrids, which gives standard combustion engines a small electric boost for an equally small decrease in CO2 emissions. From the auto companies' perspective, it's clear that switching to electric is largely a response to legislation rather than consumer demand.

    In June during FCA's investors' day, where the company revealed its electric ambitions within the new five-year plan for the company, Chief Technical Officer Mark Chernoby described the European Union as the "most challenging regulatory/consumer environment in the world."

    FCA traditionally had been the automaker least interested in battery power, citing the slim-to-zero returns. Its former CEO, Sergio Marchionne, famously asked consumers in 2014 not to buy its only electric car, the Fiat 500e, because the company lost $14,000 for each one sold.

    Now, however, FCA is working on a new electric Fiat 500 as part of its wider EV plan. The company had little choice, Chernoby said, describing the fines in Europe for not achieving average CO2 targets by the 2020-21 time frame as "significant."

    Diesel decline

    Meanwhile, consumers are abandoning the carmakers' low-CO2 fuel of choice — diesel — as cities across Europe target the fuel to combat emissions problems. In response, FCA plans to drop diesel in Europe by 2021.

    The EU is encouraging this switch toward EVs. The European Commission has set out proposals for new CO2 targets for 2030 that would force manufacturers to cut fleet average emissions by 30 percent from 2021 levels.

    Electrification is key to this. The EU has set a benchmark of 15 percent of all sales to be either electric or plug-in hybrid (below 50g/km of CO2) by 2025 and 30 percent by 2030. Any automaker that achieves sales above these targets is rewarded with a higher average CO2 target.

    "The framework aims to support a gradual transition from vehicles powered by conventional engines to electric vehicles," the European Commission wrote in November.

    Limited uptake

    The manufacturers themselves are less keen on being made to switch. "Currently the reality is that the market uptake of electrically chargeable vehicles is low, and this is not due to lack of availability and choice," Daimler CEO Dieter Zetsche said last September. Zetsche was speaking in his role as president of the European auto industry association, ACEA, which continues to press the European Commission to relax the pressure to electrify by softening the 2030 emissions targets. ACEA proposes a 20 percent cut instead.

     In June, ACEA again attacked the commission over electric cars, warning that "affordability is a major barrier to customers." The manufacturers' group contends that EV growth is occurring only in rich countries such as Norway, where average gross domestic product is twice the EU average.

     As an example of that barrier, ACEA singles out Estonia, where just 43 plug-in hybrid vehicles were purchased in 2017. "A forced push for electrification could lead to social exclusion in these countries," ACEA wrote in its report, "Making the Transition to Zero-Emission Mobility."

    The association, which speaks for all European automakers, repeated Zetsche's point about slow acceptance of EVs. "Consumers looking for an alternative to diesel now often opt for petrol vehicles or hybrid ones but are not yet making the switch to electrically chargeable vehicles on a large scale," ACEA wrote. Last year the market for plug-in vehicles was just 1.8 percent of the total market, according to figures from market analyst JATO Dynamics. At its current low rate of growth, ACEA argues, the market share would be 3.9 percent by 2025 and 5.4 percent by 2030.

    Infrastructure issues

    ACEA said that the lack of charging stations is holding back sales. It calculates that at least 2 million chargers will be needed by 2025 to service the demand forecast by the EU. Of the nearly 100,000 charging points currently available, ACEA says, 30 percent are in the Netherlands and 22 percent in Germany. Romania, by contrast, has just 116 stations.

    ACEA Secretary General Erik Jonnaert called on the EU to force its member states to increase the number of publicly available charging points. "Without this, consumers will never be convinced to make the switch to electrically chargeable cars on a large scale," Jonnaert said.

    The automakers' EV pessimism, as expressed through their European association, contrasts sharply with their public enthusiasm. But analysts and the automakers think the market for plug-in vehicles will grow sharply anyway. The consulting firm AlixPartners forecasts that plug-ins, both battery-electric vehicles and plug-in hybrid EVs, will account for at least 20 percent of European sales by 2025, beating the European Commission's 15 percent benchmark.

    The VW Group has reached the same conclusion, telling the analyst firm UBS this year that it predicts the split in 2025 will be 12 percent BEV (battery-electric vehicles) and 8 percent PHEV (plug-in electric vehicles). The VW Group consistently has said it thinks a third of its sales will be pure EVs by 2025. The analyst firm LMC Automotive thinks the 2025 figure will be 18 percent, split between 11 percent BEV and 7 percent PHEV for a total market of 3.7 million vehicles.

    By 2020, LMC estimates, the market for EVs will quadruple to 1.15 million, up from 280,767 last year. It thinks plug-in hybrids will remain ahead at just over half the total before being overtaken in the subsequent five years as BEVs become more affordable and the charging network expands.

    Massive investments

    The investment being poured into electric cars is immense. FCA, for example, plans to devote 20 percent of its total capital expenditure budget up to 2022 (9 billion euros or $10.5 billion) to developing electrified vehicles. By 2022, FCA expects 40 percent of its European vehicles to be mild hybrids, 20 percent "high-voltage electrification" (BEVs or PHEVs) and 40 percent nonelectrified.

    Globally, automakers and suppliers are investing $255 billion in electric vehicles up to 2022, compared with around $25 billion in the previous eight years, AlixPartners has calculated. The money will not just go into the drivetrains but also into trying to make the EV driving experience superior to that of conventional combustion engines -- key to stimulating demand.

    UBS reports that the first of the new-generation VW electric cars -- the I.D. Neo, arriving in 2020 – will come with augmented-reality head-up display and optional inductive wireless charging. The Porsche Taycan will use an 800-volt system for ultrarapid charging (10 to 15 minutes) and consistent rapid acceleration without sacrificing on performance.

    Autonomous technology increasingly will be part of electric cars. For example, the BMW iNext SUV, scheduled to be launched in 2021, will be "fully electric, fully connected and also offer highly automated driving," BMW CEO Harald Krueger said in May.

    'More expensive'

    Automakers currently unable to command premium prices will use the high-tech allure of electric cars to persuade buyers to pay extra. "We believe electric vehicles in the future will necessarily be more expensive, so we need to find the target group who are ready to pay more," said Alain Favey, Skoda's head of sales and marketing. "It's a matter of getting the cars so attractive with a content that is so compelling that people will be ready to pay more."

    Skoda will sell an electric version of its Citigo minicar in 2019 and a production version of the Vision E, built on the new VW Group MEB platform, in 2020. To be successful, automakers must target a different audience, said Christoph Stuermer, global lead analyst at PwC Autofacts. "Trying to sell a different thing to the same kind of people can't work because the properties of battery-electric cars today are worse than for combustion-engine cars," he said.

    Applying the same marketing is a recipe for failure, Stuermer said. "Electric cars have not been product-managed or marketed in any professional way," he said. "Take the engineers off the piste and let the product managers start doing their job." Stuermer praised the Renault Zoe as being different enough to appeal to this new crowd. "The Renault brand is slightly nonblingy, it has a cool appeal, and it sells like hotcakes," he said. "In most cases, electric-car buyers are not people who like to show off."

    RECOMMENDED FOR YOU
    2022 Eurostar winner Enrico Salvatori of Qualcomm
    Recommended for You
    Enrico Salvatori
    2022 Eurostar winner Enrico Salvatori of Qualcomm
    Christian Dahlheim
    2022 Eurostar winner Christian Dahlheim of VW Financial Services
    Milan Nedeljkovic
    2022 Eurostar winner Milan Nedeljkovic of BMW
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
      • ANE Eurostars
    • More
      • Publishing Partners
        • Capgemini: All or nothing: Why circular business models require a holistic approach
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us