SUVs, midsize cars gain from EV boom; segment poised to top 1M this year

SUVs were Europe’s top-selling electric car body style in the first quarter of 2021, new data shows.

However, the midsize segment had the highest share of electric models at 17 percent due to strong demand for the Tesla Model 3, Europe’s best-selling electric car during the first three months.

Overall sales of electric cars climbed 55 percent to 197,157 during the quarter, according to data from JATO Dynamics.

Europe’s full-year EV sales are expected to top 1 million for the first time in 2021, according to analyst firm LMC Automotive.

The big Q1 gain for EVs came despite the closure of dealerships in key markets such as France and the UK because of the pandemic.

Electric cars accounted for 6.6 percent of total Q1 sales in the region, figures from industry association ACEA show.

A late-quarter spike in registrations for the Tesla Model 3 helped make it Europe’s No. 4-selling model overall in March, finishing behind the Volkswagen Golf, Peugeot 208 and Opel/Vauxhall Corsa with sales of 23,507, according to JATO

Government-funded subsidies, particularly in Germany, helped drive EV sales during the period.

“Thanks to generous incentives, the German market is becoming a magnet for manufacturers hoping to offload electric cars to remain CO2 compliant,” Berlin-based analyst Matthias Schmidt wrote in a recent report.

Germany accounted for a third of all full-electric and plug-in-hybrid passenger car sales in western Europe during the quarter, according to Schmidt’s data.

Germany’s 63,732 plug-in sales were double that of the UK’s, the next biggest market in the quarter, JATO Data shows.

Germany’s package of EV purchase incentives, which total up to 9,000 euros, has massively reduced the cost of buying or leasing an electric vehicle.

For example a deal on the Leasing Time website for the Hyundai Kona EV, Europe’s No. 4-selling electric car for the period, offered the car at 139 euros a month over two years with 850 euros up front.

The incentives pushed VW’s e-Up electric minicar to the top of the EV charts in Germany in the first quarter, according to Schmidt’s data, resulting in the car selling out.

“Demand is so high we can’t deliver the car because we don’t have enough batteries,” a VW spokesman told Automotive News Europe. “The big run came with government incentives, which we never planned for.”
Minicars were the segment with the second-largest share of electric sales in the first quarter at 16 percent, JATO figures shows (see chart, below).

The e-Up was the best-selling electric minicar in Europe in the first quarter and seventh overall with a volume of 8,589, up 126 percent, according to JATO numbers.

The Smart ForTwo was next in the minicar segment at 7,158, up 201 percent, followed by the new Fiat New 500 at 7,122.

Increased competition from new launches hit the Renault Zoe the hardest. Sales of the small car fell 39 percent in the first quarter to 12,383, knocking Europe’s best-selling EV in 2020 down to second place just ahead of the VW ID3 compact.

“We knew competition was coming so it’s not a big surprise,” Renault Group Chief Financial Officer Clotilde Delbos said during a call with investors to discuss the company’s Q1 results.

Competitors in the Zoe’s segment included the Peugeot e-208, Europe’s No. 6-selling electric car in the first three months with a volume of 9,844, as well as the Opel/Vauxhall Corsa-e at 5,848.

Delbos said Renault is still confident the Zoe full-year sales will hit 100,000 “or close to that,” matching 2020, when the Zoe rose into the top 10 ranking of all small car sales in Europe for the first time.

Delbos also pointed to orders reaching 5,500 for the new Twingo electric minicar, as well as 10,000 pre-orders for the low-cost Dacia Spring electric minicar, which goes on sale officially in June. “We really have the right lineup to meet out [CO2 emissions] targets in 2021,” she said.

VW’s ID3 was the No. 3-selling EV through three months with a volume of 11,458, but the rollout of the ID4 compact SUV impacted demand for the lower-riding car in March. VW managed to sell 5,472 units of the recently launched ID4 during the quarter, of which 4,728 were registered in March. The ID3's March sales reached 5,137, according to JATO numbers.

The ID3 was completely eclipsed by the ID4 in Norway in March, finishing 43rd with just 77 sales after a third-place ranking in March 2020, according to figures from Bestsellingcarsblog.com.

The ID4 took over the No. 3 spot in Norway in March this year with sales of 856, finishing behind the Tesla Model 3 and Toyota RAV4.

Norway remained Europe’s largest plug-in market by share at 52 percent of overall sales during first quarter, according to JATO.

The VW spokesman said the ID3’s sales were impacted because “we had to fill up the order pipeline for the ID4” in March.

This led to a reduced ID3 volume, he said, adding that VW currently has no problem with semiconductor supply for its electric models, which get the part from a different supplier than the company uses for its combustion-engine cars.

Sales of EVs in 2021 will build in successive quarters to reach 1.2 million by year-end, analyst company LMC Automotive believes. That would be up from 733,109 in 2020, according to JATO.

The growth in sales of full-electric cars will see their share climb to 11 percent, up from 8.6 percent last year as automakers work to comply with tougher CO2 fleet emissions targets.

“Regulation and policy are definitely the main drivers now,” said Sam Adham, LMC senior powertrain analyst.

Changes this year include the end of the rule that allowed automakers to exclude their top 5 percent worst emitters from the average calculations, as well as a less generous supercredit weighting for EV sales.

The share of EVs in Europe will increase “in a linear fashion,” LMC believes, to reach 21 percent by 2025. However, they could increase faster if, as expected, the European Union enacts a tougher CO2 target in 2030 of a 50 percent reduction from 2021 figures, up from a 37.5 percent reduction.

“That would lead to automakers enacting more drastic shake-ups to their long-term production plans and model portfolios,” Adham said. “After all, 2030 is only a little more than one model life cycle away.”