Article Type: Insights

Five automotive tech advances to look forward to in 2021

The Christmas and New Year season was very different this year. , the low-key break left more time to reflect on the past 12 months that have rushed by and what new technologies 2021 might bring the automotive industry, observes Autovista Group’s chief economist Dr Christof Engelskirchen. Let’s keep fingers crossed that by the summer, we will be in a position to enjoy 2021 even more.

1. AWD in BEVS

It is surprising how few of the available battery-electric vehicles (BEV) feature all-wheel drive (AWD), when you consider how much easier it would be to deploy this technology compared to an internal combustion engine (ICE) and even a plug-in-hybrid electric vehicle (PHEV). One electric engine at each of the four wheels seals the deal. It would represent a unique selling point in several segments, and could be leveraged as an argument towards stronger safety, sportiness and versatility. Currently, you would need to spend (far) beyond €50,000 to get your hands on an AWD BEV and your choice would be limited to: Audi E-tron, E-tron Sportback, Jaguar I-Pace, Mercedes EQC, Porsche Taycan, Tesla Model S, Model X, Model 3 and Volvo XC40 recharge pure electric. That will change this year with the Skoda Enyaq, Ford Mustang Mach-E and Polestar 2 hitting the stage and a wave of AWD BEV-launches from Audi, Mercedes and Hyundai. Although it might be 2022 until you will get your hands on your preferred model.

2. Increased BEV ranges

I vividly remember 2009 when we were bombarded with arguments that the vast majority of daily trips can easily be done with a BEV and that we need to educate people about this to address the concerns around range anxiety. There is a good summary of research on the topic of average length of daily trips for various regions in Europe and by type of fleet (see table below).

Fleet shares per intervals of daily travelled distances

Flottenanteile pro Intervall der täglich zurückgelegten Strecken

Source: Elsevier, ScienceDirect.com – Case Studies on Transport Policy 6 (2018)

Nevertheless, range anxiety continues to represent an issue for a majority of people not wanting to give up the greater than 500km and more range that comes with every ICE car. People underestimated the importance of offering flexibility and a variety of applications, when consumers choose an appropriate vehicle. For example, SUVs consume more fuel/energy due to their body style than a saloon, estate or hatchback. Yet, people buy an SUV as they overcompensate that fact with versatility: they are considered stylish, offer higher seating position, increase perceived safety and they work in an elegant setting as well as at the home improvement retailer or garden centre.

3. Touchscreen only

Admittedly, I was not the first to jump on board the iPhone train as they became popular. Writing an email on a touchscreen was a big nuisance for me. Thankfully, the wide variety of use cases and innovations that a screen, in combination with an Android or iOS operating systems, more than compensated for this. The touchscreen-only devices are at a point of no return. However, there is a notably significant level of safety concern when operating a touchscreen while driving a vehicle. It is also not so easy to hit the right button when you get no tactile feedback. Nevertheless, the transition to touchscreen only, with some buttons remaining on the steering wheel and a turning wheel to hold onto, are unlikely to be reversed. Most recent user interfaces allow for natural-voice command recognition, which will help pave the way for the touchscreen-only car in 2021. One of the more recent announcements around touchscreen technology is the MBUX Hyperscreen from Daimler, announced on 7 January and showcased at the Consumer Electronics Show (CES) this year.

4. Fully online-enabled car purchase

When I did all my Christmas shopping online this year, comparing prices and features across multiple sites, I remembered how different the car-buying experience was when we looked for a car privately two years ago. We needed to sell our used car and tried to cross-shop for the right full-service leasing offer for a second vehicle in the household. It involved a fair amount of physical presence at dealerships and applying unnerving haggling techniques, knowing the professional on the other side felt as equally annoyed as we did. Would it not be nice to take all of this out of the equation? 2021 is the chance and we are up for a new leasing contract towards the end of the year. I am looking forward to a more user-friendly and online-enabled shopping experience.

5. Flexible-ownership models

A more digitally enabled sales-and-marketing value chain, along with customer openness to shopping online, has invited new formats, brands and players to the market. ONTO, for example is a car-subscription provider for electric vehicles. PIVOTAL is Jaguar Land Rover’s car subscription brand. Volvo offers Volvo Care as a car-subscription business model and Lynk & Co wants to offer vehicle access through a monthly-membership fee-based model. I could mention many more OEMs that are very active in this area as well as start-ups, leasing and rental companies that offer more flexible-ownership models. What they have in common is that they will produce more younger, higher-value used cars than ever before. We expect that the number of young used-car transactions will rise by 55% between 2019 and 2030.

Brexit deal introduces threshold to sourcing BEV components, or tariffs to apply

The Brexit deal has offered some relief to UK manufacturers of electrically-chargeable vehicles (EVs) following earlier reports that tariffs would be applied to exported vehicles that do not contain a certain quota of ‘locally-sourced’ components.

During negotiations, issues surrounding the number of components used in vehicles from outside Europe came to light. This problem especially affected EVs, where all pieces of the battery count as components and many of which are sourced from Asia.

Without a certain number of locally-sourced parts, vehicles would be subject to tariffs under World Trade Organisation rules, meaning EVs could see an additional 10% added to UK exports to the continent. For the purposes of any deal, locally sourced would mean components produced within the European Union and/or the UK.

In October 2020, this issue was reported as a sticking point in negotiations, with components from Japan and Turkey highlighted as being unable to count as locally sourced, despite the UK negotiating free-trade agreements with both countries. Manufacturers with plants based in the UK and the EU will need to prove that exported goods are European-made, with a specified threshold of parts, a move known as ‘cumulation’.

Battery threshold

The Brexit trade deal offers carmakers a slender lifeline, with a staggered transition period of three and six years. In this time, the number of locally-sourced components must increase; otherwise, tariffs will be introduced, in spite of a free-trade agreement.

Up until 31 December 2023, Annex Orig-2B: Transitional product-specific rules for electric accumulators and electrified vehicles, states that accumulators and battery cells must either be produced in the EU or comprise no more than 70% non-EU components before tariffs are introduced. Hybrid, plug-in hybrid (PHEV) and battery-electric vehicles (BEVs) can comprise no more than 60% non-EU or UK components.

However, following this period, a further stage has been included, whereby the threshold of non-local parts drops, with accumulators only allowed to feature a maximum 40% foreign components, battery cells 50% and hybrids, PHEVs and BEVs a limit of 55%, until 31 December 2026.

The rules for 2027 and beyond will be reviewed later, but not before 2025 after the first transition period has passed.

‘The review shall be done on the basis of available information about the markets within the parties, such as the availability of sufficient and suitable originating materials, the balance between supply and demand and other relevant information,’ the document states.

Sourcing components

The parts requirement could have a significant impact on automotive manufacturing in the UK, particularly in terms of where components are sourced. Currently, Toyota builds hybrid models in the country, while Nissan produces its BEV Leaf model for export to Europe. Other carmakers are also developing their UK lines for electrification, with BMW preparing to build the Mini Electric, and Jaguar Land Rover retooling their plants for upcoming models.

The terms of the deal mean that carmakers must find as many locally-sourced components as possible for EVs and hybrids to be built in the UK. Failure to adhere to the thresholds as laid out in the UK-EU deal will mean vehicles built in Britain will have a 10% tariff added when they are shipped. This will likely make them uncompetitive on the European market, impacting sales as a result.

The automotive industry is increasingly moving away from internal combustion engines (ICE) as CO2 targets mean zero-emission technology is the only way to meet mandates. Yet the supply of crucial components related to the battery and motors is dominated by companies and plants based in Asia, which do not count as locally sourced.

There is, however, an increasing drive for battery manufacturing in Europe, with several companies announcing the building of gigafactories on the continent. There is also a project to develop batteries in the UK, adding to the available local components‘ roster. Many of these aim to be fully up and running by the middle of the decade, with production starting slowly in the next couple of years. This could represent a realistic opportunity of meeting both threshold targets.

Free trade

However, the complexities of trade agreements could also prove difficult to UK vehicle manufacturing. Japanese newspaper Nikkei reported that Nissan had chosen not to produce its upcoming electric Ariya SUV at its Sunderland plant, which is already tooled for production thanks to its manufacturing of the Leaf. Instead, the company will produce the vehicle in Japan and take advantage of free-trade deals with the EU and the UK to export the vehicle to these markets. However, Nissan has stated that it had no plans to produce the Ariya in the UK at all, according to Automotive News Europe.

These trade agreements could see other EV developments pulled out of the UK, while some European-based manufacturers may already be considering moving production of PHEVs and BEVs out of the country in case they cannot meet the first threshold deadline in 2024.

German new-car registrations down 19% in 2020

Germany saw the registration of 2.9 million new cars in 2020, down 19.1% on 2019. The latest figures from the Kraftfahrt-Bundesamt (KBA) show that 62.8% of these units were registered for commercial purposes, down 22.4%, while 37.1% of the market share was private, down 13%.

Bidding farewell to a year of unprecedented challenges, the German market was able to end 2020 on a marginally positive note. A total of 311,394 passenger cars were sold in December last year, up 9.9% on the same period from 2019. Accompanied by an 8.4% rise in September, the German new-car market only saw two months of registration growth in 2020. These upticks in the second half of last year represent a move away from the 61% plunge in April and 49.5% drop in May.

New-car registrations, Germany, y-o-y % change, January to December 2020

Pkw-Neuzulassungen, Deutschland, Veränderung gegenüber dem Vorjahr in %, Januar bis Dezember 2020 — *Data: KBA*

While Germany appears to be leading the way with a recovering automotive market, difficulties continue across Europe as member states are battered by fresh pandemic waves. In December last year, French new-car registrations dropped by 11.8% compared to the same period in 2019. Italy felt a greater decline at 14.9%, while Spain saw just 13 fewer registered units than December 2019. However, Germany does not appear to be out of the woods yet.

Climbing infection rates have triggered an extension of the country’s lockdown measures until the end of January. This makes a positive start to this year seem even less likely as dealerships must remain closed, except for the service departments. While Autovista Group’s Schwacke expects to see a recovery to just under 3.1 million new-car registrations in 2021, it predicts figures will be below those in previous years, and significantly below 2019’s peak.

New-car registrations, EU4, y-o-y % change, January to December 2020

Pkw-Neuzulassungen, EU4, Veränderung in % gegenüber dem Vorjahr, Januar bis Dezember 2020

Data: CCFA, KBA, ANFIA, ANFAC

Drives and segments

With the largest share of last year’s market at 46.7%, a total of 1,361,723 petrol-powered cars were registered, down 36.3% on 2019. Meanwhile, 819,896 diesel-driven cars took a 28.1% share, down 28.9% on the previous year.

Alternative drives, consisting of hybrids, battery-electric vehicles (BEVs), hydrogen fuel-cell and gas claimed approximately a quarter of all new-car registrations in Germany last year. Hybrids achieved a share of 18.1%, up 120.6% on the previous period with 527,864 registrations, including plug-in hybrids (PHEVs) with 200,469 units, up 342.1% and with a market share of 6.9%. Electric cars represented 6.7% of the market, up 206.8% to 194,163 units. A total of 7,159 gas-powered cars were registered in 2020, down 6.1% on 2019, and LPG-driven cars saw a drop of 9.8%, to 6,543 units. CO2 emissions from cars fell by 11.0% last year, on average to 139.8g/km from 157.0g/km in the previous reporting period.

Over half of all registrations were accounted for by SUVs (21.3%), compact cars (20.5%) or small cars (15.1%). With 2.6% of the market, motorhomes saw the most significant increase, up 41.4%.

Brand performance

All German brands showed a decline last year. Smart took the hardest fall at 67.3%, followed by Opel, which dropped by 32.3%, then Ford down 30.6%. VW fell by 21.3% on the previous reporting year, Audi slumped by 19.9%, Porsche was down by 16.3%, BMW dropped by 13.7%. Negative results were also reported by Mini (down 11.7%) and Mercedes (down 10.6%). With a share of 18%, VW held the largest share of the new-car market in 2020.

For imported brands, both Tesla (up 55.9%) and Fiat (up 0.2%) reported positive results for 2020. Meanwhile, declines were recorded by Suzuki (down 44.8%), Ssangyoung (down 40.2%), Mazda (down 38.1%) and Dacia (down 36.6%). Skoda led the imported brands with a market share of 6.2%, followed by Renault with 4.3%.

European new-car markets contract by more than a quarter in 2020

The new-car markets of France, Italy and Spain all shrunk by more than 25% in 2020. Autovista Group senior data journalist Neil King considers the December and annual figures.

Following the lifting of lockdowns in mid-2020, the new-car markets of France, Italy and Spain had shown signs of recovery. However, the resurgence of coronavirus (COVID-19) cases, restrictions and/or economic repercussions are suppressing demand, albeit inflicting far less damage than in March to May. Registrations declined again year on year in December in all three countries, according to data released by the respective automotive trade associations, and each market contracted by more than a quarter overall in 2020.

New-car registrations, France, Italy and Spain, y-o-y % change, December and 2020

Pkw-Neuzulassungen, Frankreich, Italien und Spanien, Veränderung gegenüber dem Vorjahr in %, Dezember und 2020

Source: CCFA, ANFIA, ANFAC

New-car registrations were 11.8% lower in France in December 2020 than in the same month of 2019, according to the latest data released by the CCFA, the French automotive industry association.

This is a significant improvement on the 27% contraction in November, the largest monthly decline in France since May, as dealers reopened on 28 November. Prior to this, dealerships were closed during the month and were only allowed to deliver cars that had already been ordered before the second lockdown. In the full calendar year of 2020, new-car registrations in France were 25.5% lower than in 2019

Third consecutive monthly decline in Italy

In Italy, the year-on-year downturn in December reported by the industry association ANFIA was 14.9%, and the result would have been worse (down about 19%) had there not been an extra working day. This is the third consecutive month that the country is back in negative territory following the 9.5% growth in new-car registrations in September due to the new government scrappage incentives that came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). While the market still contracted in that month, demand improved but delivery times delayed many registrations until September.

New-car registrations, France, Italy and Spain, y-o-y % change, January to December 2020

Pkw-Neuzulassungen, Frankreich, Italien und Spanien, Veränderung gegenüber dem Vorjahr in %, Januar bis Dezember 2020

Source: CCFA, ANFIA, ANFAC

Aside from restrictions in the country, the decline in December is also due to the exhaustion of the scrappage incentives. The ongoing weakness in December confirmed the gloomy forecasts for the Italian new-car market, which contracted by 27.9% in 2020. ‘We archive 2020 as the most difficult post-war year for our sector,’ commented ANFIA president Paolo Scudieri.

However, the Italian Parliament has approved an amendment to the 2021 Budget Law, which introduces new measures to renew the vehicle fleet with less polluting and safer cars.

‘We look to 2021 with confidence, thanks to the measures that came into force with the start of the new year, on which there was an agreement between all the political forces, and that, in addition to supporting demand, will favour the restart of the industrial production of motor vehicles and components for the benefit of the entire automotive supply chain, with positive repercussions on employment levels and investments for green and digital transition,’ Scudieri said.

Bitter-sweet Spain

In Spain, 105,841 new cars were registered during December, just 13 units fewer than in December 2019, according to ANFAC, the Spanish vehicle manufacturers’ association. Despite this stability in the month, the new-car market contracted by 32.3% in 2020, with 851,211 units registered in the entire year. This is the first time the Spanish market has fallen below one million units since 2014.

The December figures were buoyed by consumers taking advantage of the RENOVE scrappage scheme before it ended on 31 December. Similarly, the increase in vehicle registration taxes from 1 January brought demand forward into the tail end of 2020. However, this is bitter sweet for Spain as the new WLTP-based taxes will reduce demand, especially at the start of the year, and the market is expected to remain below one million units in 2021.

Tania Puche, director of communications of the Spanish dealers’ association GANVAM, commented that ‘the lack of political will to neutralise the impact of the WLTP on the registration tax makes us look sceptically at 2021. In an exceptional situation such as the one that has caused the pandemic, consumers need special incentives to continue with the necessary renewal of the fleet. It is probable that until the second half of the year we will not see a change in trend, when the impact of the vaccine on consumer confidence and the end of mobility restrictions will generate an environment of less uncertainty.’

Monthly Market Dashboard: RVs start to fall in Europe

Autovista Group’s interactive monthly market dashboard (MMD) suggests that pressure is increasing on residual values. Senior data journalist Neil King explores this month’s analytics.

This month’s MMD reveals that the average residual value (RV) of cars aged 36 months and with 60,000km grew year on year in all the Big 5 European markets in December. However, there are early indications that RVs are coming under pressure, with values lower than reported for November in Italy and the UK, and essentially stable in Germany in Spain. France bucked the trend, albeit with month-on-month pricing growth of just 1.3%. The downward trend looks set to continue in 2021.

RV retention, represented as RV%, grew year on year in all markets except Germany. The highest growth in RV% terms was in the UK, where the average RV% was 46%, equating to a 9.2% change compared to December 2019. Nevertheless, even RVs in the UK were lower than in November in terms of both value and retention.

The UK enjoyed the strongest rally in used-car prices after Europe emerged from lockdowns. This was driven by the release of pent-up demand, and a starker vehicle-supply challenge than any other market, which translated into higher RVs as used-car demand outstripped supply.

However, as reported in our latest coverage of the ‘three-speed’ development of RVs across Europe, RVs in the UK have been descending from their great height since late October as pent-up demand is broadly satisfied and new-car supply has improved. With the UK under restrictions as it seeks to stem the sharp rise in COVID-19 cases, like most of Europe, and the Brexit transition period ending on 31 December, a further descent is expected going into 2021.

Lockdown slowdown in France and the UK

Despite the pressure on RVs, three-year-old cars are selling quicker than a year ago in all the major European markets, except the UK. However, the average number of stock days over the last month, compared to the November MMD snapshot, rose by 14.9% in France and 16.6% in the UK as both countries have been in strict lockdowns, including the closure of dealerships. Nevertheless, three-year-old cars are still selling the quickest in the UK, moving on after an average of less than 40 days.

The greatest reduction in the average number of days for 36-month-old cars to sell, compared to the December 2019 snapshot, was in Italy. These vehicles now have to wait on average only 45 days to find a new buyer, sitting idle for 13% fewer days than in November 2019.

Two of the three fastest-selling cars in the major markets in December 2020 are Audi models in France. The A6 is taking less than 16 days to find a new home and the A4 sells after about 18 days on average. In second place is the Volvo XC90 in Italy, which needs just under 18 days to be rehomed.

Negative RV outlook

In the December update, the RV outlook has improved slightly in France and the UK but values are still forecast to decline in 2021, by 0.4% and 1.4% respectively. Used-car prices are forecast to decline by 0.7% in Germany and 1.1% in Spain. The weakest outlook is for Italy, where RVs are forecast to be 3.9% lower than their current level at the end of 2021.

Click here or on the screenshot above to view the monthly market dashboard for December 2020.

Launch Report: Citroën C4 – a crossover pioneer

With the new C4, Citroën has mixed a crossover with a hatchback to deliver a C-segment car with DNA from both camps. It has more of a hatchback silhouette than an SUV, but it still offers high ground clearance and an elevated seating position, as well as an airy internal feel due to the raised roofline.

The new Citroën is equipped with progressive hydraulic shock absorbers, comfortable seats, 18-inch wheels, a digital cockpit, and offers good space between the two seat rows. It also has more than 20 advanced driver-assistance systems (ADAS), a head-up display and a 10-inch central console. Citroën has removed the need to use the touchscreen to access the climate controls, with a row of controls in the lower central dashboard.

The C4 is available with petrol and diesel engines, as well as a fully-electric version, the e-C4, on PSA’s modular, ‘multi-energy’ CMP platform. It is one of the hatchback/crossover pioneers in the C-segment and is offered at a reasonable price point, especially with the good level of equipment. However, some manufacturers are launching similar offerings in the coming months, increasing competition for the model.

Click here or on the image below to read Autovista Group’s benchmarking of the Citroën C4 in France, Germany, Spain and the UK. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Podcast: How might self-driving cars change us?

From challenges to breakthroughs and new applications, 2020 has been an important year for autonomous technology. But how might these advances change the relationship between vehicles and people?

Autovista Group Daily Brief journalist Tom Geggus speaks with Shaun Helman, chief scientist for behavioural and data sciences, and Camilla Fowler, head of automated transport, from the UK Transport Research Laboratory to find out.

Catch up with Autovista Group’s other autonomous-vehicle insights from 2020, including the long road to autonomy, facing autonomous disillusionment, and keeping up with autonomous cars.

You can listen and subscribe to receive podcasts direct to your mobile device, or browse through previous episodes, on Apple, Spotify, Google Podcasts and search for Autovista Group Podcast on Amazon Music.

Launch Report: Hyundai i20 – sportier and more attractive

The third-generation Hyundai i20 has a stronger, sportier, and more attractive design, with tight lines and a prominent rear-quarter window, reveals the latest model launch report from Autovista Group. The model is longer and wider, which translates into more interior roominess and a 352-litre boot, which is among the largest in the B-segment.

The level of standard equipment is high and so the i20 has a very limited number of individual options available. This makes it easy for customers to configure vehicles and leads to many well-equipped used cars. The digital instrument cluster and central touchscreen in particular support the attractiveness of the interior, and strike a good balance between too many buttons and too few.

The report notes that the engine offer is rather limited, with only two petrol engines and no diesel, electric or full-hybrid versions. There is a mild-hybrid (MHEV) version but this has a battery in the spare-wheel well, reducing the boot volume to 262 litres.

The B-segment is very competitive and the i20 faces strong rivals, such as the Opel/Vauxhall Corsa, Renault Clio, SEAT Ibiza and VW Polo. Given that the segment is mainly driven by price considerations, the list prices of the i20 are rather high. In Spain for example, the price of the i20 version under review is in line with the Corsa and Polo, but it is more expensive than the best-selling SEAT Ibiza.

Nevertheless, in Germany, the i20 has recently won AutoBild magazine’s ‘G o ldenes Lenkrad 2020’ – a popular reader’s choice award – in the category for cars with a list price below €25,000.

Click here or on the image below to read Autovista Group’s benchmarking of the Hyundai i20 in France, Germany and Spain. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Brexit survey: Lack of preparedness as no-deal likelihood grows

As the UK government and the EU struggle to find common ground on which to establish some kind of trade agreement, UK respondents were hopeful of a free-trade deal. However, they are less likely than their European counterparts to feel prepared for a no-deal scenario. This was one of the key findings of the Autovista Group Brexit survey.

The COVID-19 pandemic distracted the automotive industry from trade-deal negotiations but as a no-deal scenario looks more likely than ever, concerns over the impact of Brexit once again loom large. Autovista Group surveyed a range of automotive industry firms to explore the latest predictions for the likely outcome of EU-UK talks and what they mean for our sector in 2021. The online survey was conducted throughout November 2020 as the two parties upped the pace of negotiations. A selection of individuals was invited to take part, with respondents across 12 European countries participating, in addition to those from the UK.

When asked how ready they are for a no-deal Brexit, only 13% of UK respondents said they felt completely prepared while three-quarters of European respondents claim to be prepared. This could partly be a consequence of poor communication, which has been a contentious issue throughout the whole Brexit period. This has been a perception both in the UK and in the EU. One respondent commented: ‘[We want] some better direction on what [Brexit] means and what needs to be done around import and export, our main concern being delays in parts supply for vehicles.’

Lack of clarity

In the UK, respondents called for clarity on the specifics of changes to imports, exports and travel, as well as for more time to adjust to any changes and clarification on what Brexit will mean for the automotive industry in particular.

Clearly, an unforeseen issue that has had an impact this year is COVID-19. This has hindered talks and among European respondents, the concern most commonly expressed was that Brexit seemed to have been forgotten in light of the Covid-19 pandemic.

A telling finding of the survey was that when asked what information their government had provided that had been helpful, no respondent was able to give an example.

The full survey: Brexit predictions – an analysis of responses to a Europe-wide survey of automotive industry firms on their predictions for the impact of Brexit is available here.

Is the automotive industry heading for PHEVgate?

As the automotive industry continues to deal with the damage dealt by Dieselgate, environmental campaign group Transport and Environment (T&E) is asking whether another perfect storm is forming around plug-in hybrids (PHEVs).

With manufacturers aiming for emissions regulations targets, low-emission vehicles are essential. So in a period of electrification, PHEVs are bridging the gap between internal combustion engines (ICEs) and battery-electric vehicles (BEVs), for carmakers and consumers alike. Demand for PHEVs in the EU increased by 368.1% in Q3 2020, when compared with the same period last year. But results of a recent T&E study point to PHEVs as a bridge waiting to collapse.

‘Fake electric cars’

T&E commissioned testing of three of the most popular PHEVs sold in 2019; the BMW X5, Volvo XC60 and the Mitsubishi Outlander. The results revealed that in the real world, even when under the mildest testing conditions with a full battery, the cars’ emissions were higher than advertised. The Outlander emitted 86g/km of CO2, overshooting official WLTP values by 89%. The XC60 produced 115g/km, exceeding its official values by 62%. Meanwhile, the X5, surpassed its CO2 values by 28%, releasing 41g/km.

‘Plug-in hybrids are fake electric cars, built for lab tests and tax breaks, not real driving,’ said Julia Poliscanova, senior director for clean vehicles at T&E. ‘Our tests show that even in optimal conditions, with a full battery, the cars pollute more than advertised. Unless you drive them softly, carbon emissions can go off the charts.’

Offizielle vs. reale Emissionen von Plug-in-Hybriden

Source: Transport and Environment

T&E estimates that once their batteries are depleted, the X5, the Outlander and the XC50 can only drive in engine mode for 11km, 19km and 23km respectively, before overshooting their official CO2 emissions per kilometre. The group argues, therefore, that PHEVs are not suited to long-distance journeys, and would require much more frequent charging than BEVs to keep their low-emissions label.

‘Carmakers blame drivers for plug-in hybrids’ high emissions. But the truth is that most PHEVs are just not well made. They have weak electric motors, big, polluting engines, and usually can’t fast charge. The only way plug-ins are going to have a future is if we completely overhaul how we reward them in EU car CO2 tests and regulations. Otherwise, PHEVs will soon join diesel in the dustbin of history,’ she said.

Poliscanova called for governments to stop subsidising the purchasing of these cars with taxpayer money. T&E added that the EU’s current practice of handing out additional emissions credits for PHEVs needs to end when it reviews the CO2 targets for 2025 and 2030.

In defence of PHEVs

When approached by Autovista Group, the manufacturers of the XC60, X5, and Outlander came to the defence of their respective PHEVs and their emissions testing. Volvo insisted that all of its cars are certified and fully compliant with emissions legislation, but do come with a real-world caveat. ‘The existing emissions-testing regime provides a useful industry standard that allows customers to make comparisons between cars, but real-world variations will apply,’ the carmaker said.

The manufacturer said that PHEVs have close-to-zero tailpipe emissions when driven in pure electric mode and its customer field data shows that its cars are driven in pure electric mode 40% of the time on average. ‘Plug-in Hybrids are an important transitional technology on the journey towards zero-emission mobility, and an important part of the mobility portfolio of the near future,’ Volvo stated.

BMW claimed that if a customer followed the exact WLTP and NEDC legislative test profile and conditions, the published fuel economy figures would be achieved. ‘The aim of the legislative test profile, however, is not the promise of a particular fuel economy figure in real customer life, but rather a basis to make vehicles of different brands, sizes and technologies comparable,’ the carmaker said. ‘A car with a good WLTP/NEDC figure will also convince in comparison with others in real customer life.’

BMW pointed to the potential for PHEV figures to also include a number to represent when a consumer does not charge the vehicle’s battery. ‘This might be a suitable step to increase the credibility around WLTP/NEDC and PHEV because the real-world fuel economy of a PHEV is heavily dependent on the charging state of the battery,’ BMW concluded.

Mitsubishi highlighted that their published MPG and CO2 figures are produced via standardised WLTP testing that was designed for PHEVs. ‘Independent tests can produce unreliable/variable figures depending on conditions and a variety of other factors and we naturally contest any findings where we have no oversight of the testing or methodology,’ the carmaker said. ‘Disregarding a PHEV’s electrical powertrain during testing, for example, is like testing a petrol or diesel car and only using three of its gears.’

Transitional technology

Mitsubishi pointed to a presumption that PHEV drivers do not plug in, so it shared the results of two surveys it commissioned which investigated Mitsubishi owner usage and attitudes. The data showed that 92% of Outlander owners charge up multiple times per week (at least two to three times) and that PHEV owners drive in electric mode (using no petrol) during 72.2% of their commute and 84.3% of errand and school runs. Even on long leisure runs, 32.8% of the journey was conducted in EV mode. What is more, 70% of Outlander owners surveyed would consider a fully electric vehicle as their next purchase, compared to just 27% of ICE drivers. Mitsubishi said this was indicative of the important role that PHEVs play as a transitional technology.

‘They [PHEVs] ease people into electrification, helping them to realise they actually could live with an EV day-to-day, while they also produce lower emissions overall than traditional ICE vehicles,’ the Mitsubishi said. The manufacturer explained that EVs are still too expensive for most people, with the range at the more affordable end of the model spectrum not enough for what consumers feel comfortable with. It went on to add, ‘that’s before you factor in the charging infrastructure which is still hopelessly inadequate even for what’s on the road now, let alone mass adoption over the next decade.’

‘We are completely on board with the need to decarbonise as soon as possible, but it needs to happen in stages and plug-in hybrids can be a very useful tool in accelerating and supporting that transition, especially if incentivised and encouraged properly by the government,’ Mitsubishi concluded.

As electrification surges on, it makes sense that consumers and carmakers alike need a transitional vehicle which can endure the cross over, while initial costs are lowered and charging infrastructure is strengthened. However, it is vital that the low-emission capabilities of these vehicles is as sold, both in terms of trust and climate change. In the wake of COVID-19, the last thing the automotive industry needs is another Dieselgate.

New-car registrations deteriorate across Europe in November

Autovista Group senior data journalist Neil King considers the ongoing downward trend in new-car registrations in France, Italy and Spain in November.

Despite government-backed incentives in France, Italy and Spain, new-car registrations suffered significantly again in November, according to data released by the respective automotive trade associations. As countries battle the second wave of coronavirus (COVID-19) cases, restrictions and/or economic repercussions are impacting registration volumes, albeit inflicting far less damage than in March to May.

Following the lifting of lockdowns earlier in the year, the countries’ automotive markets had shown signs of recovery, but, all three suffered a continuation of the downward trend that commenced in September. The 18.7% contraction in Spain was a subtle improvement on the 21.0% year-on-year decline in October, but this was only because of the extra working day in November 2020 compared to November 2019.

New-car registrations, France, Italy and Spain, year-on-year percentage change, January to November 2020

Neuzulassungen von Pkw, Frankreich, Italien und Spanien, Veränderung gegenüber dem Vorjahr in Prozent, Januar bis November 2020

Source: CCFA, ANFIA, ANFAC

New-car registrations were 27.0% lower in France in November 2020 than in the same month of 2019, even with one extra working day, according to the latest data released by the CCFA, the French automotive industry association. This is the largest year-on-year decline in a month since May, but compared to the dramatic falls in March and April, ‘the re-confinement had decidedly different consequences for the car market,’ commented the CCFA in a flash statement.

‘All the dealers were closed in France in November. They were only allowed to deliver cars that had already been ordered before the second lockdown. They have reopened since 28 November,’ clarified Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux. As dealers could still honour deliveries of orders, this explains why the downturn in France was far less significant in November than during the first lockdown.

In the first 11 months of 2020, new-car registrations in France were 26.9% lower than in the same period in 2019. With dealers open again, December will invariably be a healthier month for the automotive sector, but new-car registrations will still be about 25% lower in 2020 than in 2019.

Less lockdown, more crisis in Spain

In Spain, 75,708 new cars were registered during November, 18.7% fewer than in November 2019, according to ANFAC, the Spanish vehicle manufacturers’ association. ‘The red numbers remain in all segments and vehicle-sales channels in November 2020, and therefore in the cumulative figures. The second wave of the pandemic, and the associated serious economic and social crisis, is deepening the decline in sales in all markets,’ ANFAC commented.

The MOVES II and RENOVE incentive schemes were introduced in July and the new-car market saw a 1.1% increase that month. Since then, however, the year-on-year results have deteriorated, with the November fall only improving slightly on October because of the extra working day in the month.

Ana Azofra, valuations and insights manager at Autovista Group in Spain, explained that ‘the lockdown had many different scenarios, depending on the region and city, but was less restrictive than during the first wave and dealers – at least most of them – remain open. However, the RENOVE incentives for internal combustion engines (ICE) are exhausted and, moreover, the crisis is already affecting private consumption. The unemployment rate already increased in Spain and now stands at 16.5%, maintaining the negative trend.’

Measures to deal with the second wave of COVID-19 infections and the economic repercussions of the crisis are clearly weakening consumer demand. Furthermore, the calculation of the registration tax based on WLTP emissions figures, from January 2021, will further complicate the recovery.

‘Half of the vehicles sold in 2021 will see their taxation increased at the time of purchase due to the entry into operation of the European WLTP regulation. This average price increase of 5% will mean, in such a bad environment for vehicle sales, a worsening of the sector’s situation, making it even more difficult to get out of the crisis. We need the registration tax increase to be corrected before January 1 so that the [automotive] industry and the sector can be the driver of the Spanish economy that they have always been and will be,’ the three associations, ANFAC, Faconauto and Ganvam, declared in the ANFAC release.

Second consecutive monthly decline in Italy

In Italy, the year-on-year downturn in November reported by the industry association ANFIA was 8.3%, although the result would have been worse (down about 12%) had there not been the extra working day. This is the second consecutive month that the country is back in negative territory following the 9.5% growth in new-car registrations in September due to the new government incentives that came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). While the market still contracted in that month, demand improved but delivery times delayed many registrations until September.

As in Spain, there was not ‘a full lockdown in Italy like the one we experienced in March and car dealers were – and still are – open. However, depending on the zones, there is a ‘light’ lockdown, with different restrictions that put pressure on sales as a result. Furthermore, the incentive scheme for vehicles with the highest range of CO2 emissions has been exhausted,’ commented Marco Pasquetti, forecast and data specialist of Autovista Group in Italy.

‘Without a new intervention to support the car market, the new drop in sales leaves companies with the need to reactivate layoffs, which, in any case, will not be sufficient to stem the loss of turnover today, compared to 2019, at an average value of -25%. The data on the use of the redundancy fund in the period January to October 2020, compared to the same period in 2019, show an increase of 6,000%. These are striking data that induce reflection on the cost of failure to support the car,’ highlighted Adolfo De Stefani Cosentino, president of FEDERAUTO, in the ANFIA release.

The key to the recovery of new-car markets revolves around countries agreeing on budgets for 2021, and improving economic certainty and consumer confidence to boost spending. However, with COVID-19 not yet under control, and further lockdowns possible, the industry faces a difficult end to 2020 and a challenging 2021.

VW ID.3 offers TCO and equipment advantage over Golf VIII in Germany

Christoph Ruhland, Autovista Group’s European sales director, has produced analysis that reveals that the Volkswagen ID.3 has a lower total cost of ownership (TCO) and better standard equipment than the Golf VIII.

Volkswagen (VW) commenced order intake for the new ID.3 battery-electric vehicle (BEV) in Germany on 24 November. At face value, VW’s first dedicated BEV model has a higher TCO than the latest generation of the Golf, largely due to the higher acquisition costs of the ID.3 as its list price (about €35,000) is significantly higher than the 1.5-litre petrol Golf VIII.

Depreciation is the largest single factor in calculating acquisition costs and Autovista Group has benchmarked the prices and forecast residual values of both the ID.3 and Golf VIII against key competitors. Acquisition costs also include taxes and finance.

TCO and acquisition costs, VW Golf VIII versus ID.3

TCO und Anschaffungskosten, VW Golf VIII versus ID.3

Source: Autovista Group, Car Cost Expert

The higher acquisition costs of the ID.3 are partly compensated by the BEV’s reduced utilisation costs, due to lower spending on fuel, service, wear and insurance. As with all BEVs, service costs are lower than for cars with internal combustion engines due to the lack of oil, and components such as oil filters and spark plugs. In fact, the ID.3 only requires replacement of the brake fluid and pollen filter at regular service intervals.

Service costs, VW Golf VIII versus ID.3

Source: Autovista Group, Car Cost Expert

However, crucially, BEVs in Germany are subsidised with generous purchase incentives. The grant for BEVs costing less than €40,000 previously amounted to €6,000, split equally between the government and the carmaker. Since 1 July, the government has doubled its incentive (from €3,000 to €6,000) and in combination with the additional €3,000 contribution from VW, the acquisition costs of the ID.3 are about €1,400 lower than for the petrol Golf. In combination with the lower utilisation costs, the incentive-adjusted TCO of the ID.3 is about €4,300 less than the petrol Golf.

This aligns with Autovista Group analysis of C-segment models, published in June, which uncovered that BEVs are only TCO-competitive in European markets because of government incentives. In Germany, the additional €3,000 government subsidy since 1 July gives the ID.3 a significant TCO advantage over the Golf VIII.

Discounting and equipment analysis

However, customers may be able to negotiate a healthy discount on the Golf VIII, which OEMs are unlikely to offer on BEVs in addition to their €3,000 incentive contribution. For example, a 20% discount on the petrol Golf would give it a TCO advantage of approximately €2,150 over the ID.3. Nevertheless, a 5% discount on the ID.3, in addition to the €9,000 BEV incentive, would be sufficient to make its TCO competitive with a 20%-discounted Golf.

Furthermore, it must be noted that the ID.3 has 204 horsepower and is therefore more powerful than the 150-horsepower 1.5-litre petrol Golf. The ID.3 also has better standard equipment, which Autovista Group has calculated to be worth about €1,800.

Equipment costs, VW Golf VIII versus ID.3

Ausstattungskosten, VW Golf VIII versus ID.3

Source: Autovista Group, Car Cost Expert

When this is factored into the TCO calculation, the ID.3, even without discounting, narrowly beats a Golf with a 20% discount. If the ID.3 gains a 5% discount, the TCO advantage would amount to €2.400.

This would leave enough change for ID.3 buyers to invest in a home charger for the ID.3, which costs about €2,000 in Germany, including installation. Chargers are also entitled to a government incentive in Germany, about €900, and so EV-friendly families could even buy and install two units with the cost saving. Maybe one for themselves to overcome charging anxiety and one as an extra source of income?

Click here to view Autovista Group’s TCO dashboard for C-segment models, published before incentives were increased in Germany in July, and here for the TCO dashboard for B-segment models, published in September.

Autovista Group’s latest TCO dashboard considers D-SUV BEVs, revealing that they struggle to compete with petrol and plug-in hybrid D-SUV models without being eligible for government incentives.

Will car sharing get a post-COVID second wind?

The sharing economy and car sharing are sociologically attractive concepts. We seek to live more sustainably, and digitally-enabled business models have increased accessibility to sharing solutions. On the other hand, car sharing (and ride hailing) have failed to reduce road congestion or the number of cars in operation. They share another joint challenge: they struggle to become profitable and have been crushed through the pandemic. Dr. Christof Engelskirchen, Autovista Group chief economist, shares his perspective.

The sharing economy is driven by a desire to connect with a community, to declutter, to increase flexibility and to live more sustainably. It is often facilitated by community-based online platforms. Car sharing is a logical extension of the sharing economy and has grown in popularity over the past 10 years. We differentiate between three types:

Free-floating car sharing, where cars park on public roads within a geo-fenced area. This service exists almost exclusively in larger cities. Smaller cities (<500,000 inhabitants) do not attract free-floating car-sharing services due to expected low utilisation rates. Pre-booking is not possible;
Stationary car sharing, where drivers pick up cars and return them to dedicated locations. Pre-booking is usually required. Peer-to-peer car sharing (e.g. via Zipcar or Turo) falls under this category as well; and
Ride hailing. This can be peer-to-peer based or professional-service ride-hailing (e.g. Uber or Lyft). The difference to the traditional taxi ride is that it is fully online-enabled and cheaper. Depending on the supplier and business model, pre-booking is possible. In peer-to-peer-based business models (e.g. Blablacar), pre-booking is usually required.

Rise, hype, disillusionment

Shared mobility saw a rise and was hyped years ago, but was confronted with challenges even before Covid-19 put another temporary obstacle in the way. These are the known challenges for free-floating and stationary car sharing:

Low utilisation rates – particularly problematic in free-floating car sharing as more cars are required than in a stationary setup to allow for flexible access. Drivers use free-floating car sharing for shorter trips, which brings utilisation down;
High costs for parking – particularly challenging in free-floating car sharing, as these cars park on public roads or in publicly-accessible parking garages;
High costs related to mistreatments, service and cleaning. Higher-frequency driver changes add to the challenge. Cars need to be regularly cleaned, often daily or on an ad hoc basis;
Additional costs for relocating cars. Cars need to be regularly re-distributed within the network as clusters form, e.g. at airports in the morning. This requires a human being to pick cars up from remote locations and put them back into those areas that would attract most drivers to the car. This is a daily logistical challenge for free-floating car sharing but affects stationary car sharing as well;
Cars depreciate more and faster in a shared-driver setup. Remarketing results are substantially lower and refurbishment costs are higher;
Competing micromobility solutions, such as e-scooters and shared bikes, represent another challenge to the profitability of car-sharing services. Renting a Smart in Frankfurt or an e-scooter costs approximately the same: around €0.20 per minute;
Car sharing is challenged in two more important use cases: safety regarding transport of (small) children and in terms of cost when running multi-stop trips; and
Bigger cities have no particular interest in offering preferential conditions for car sharing as they learn that this service does not help manage city car parking.

Rising numbers of cars in cities

There have been plenty of seemingly contradictory views on the effects of car sharing on new-car sales, congestion and substitution. The contradictions stem from non-representative samples, methodological flaws and a non-comprehensive analysis of the topic. For example, researchers forget to simulate the faster replacement cycles of cars in shared fleets or conduct surveys amongst car-sharing customers. Lobby groups are the driving force behind many studies. This does not help to demystify the topic. Autovista Group research found that the net effect on new-car sales of car sharing is positive, i.e. the shorter holding cycles overcompensate the loss of private new-car purchases.

We see this confirmed when looking at cities in Germany where free-floating and stationary car sharing is most prominently accessible. Figure 1 shows that the car-park size has increased between 8-12% between 2012 and 2020. There has been exponential growth in car-sharing units but they still only contribute 0.05% to the cars in operation in Germany.

Figure 1: Size of B2B car-sharing park vs. total passenger car park in selected German cities

Größe des B2B-Carsharing-Parks vs. Gesamt-Pkw-Parkplatz in ausgewählten deutschen Städten

Ride hailing increases congestion

Ride-hailing businesses are struggling with profitability. There are concerns about the sustainability of the business model as long as cars need a driver. A scientific study from 2019, which analyses the role of ride-hailing companies on traffic congestion in San Francisco, concluded that ride hailing increases congestion. There is some substitution between ride hailing and other road trips, but most road trips add new cars to the road. Ride-hailing vehicles stopping at the curb to pick up or drop off passengers have a notable disruptive effect on traffic flow, especially on major arterials. This was evident at the CES in Las Vegas in 2019: the city lacks a solid public-transport infrastructure and if you choose to take an Uber or Lyft, signs direct you to pick-up and drop-off areas at the major resorts. Downtown, no curb pick-ups and drop-offs are permitted.

Unmet promise

Car sharing has failed to deliver against the promise of contributing to lowering the traffic problems in big cities. It does not reduce the number of vehicles. It takes up parking space. It cannibalises public transport and cities will not give preferential treatment to these services unless they see a positive benefit. Stationary car sharing is less affected by these challenges but is also far less flexible for users. Many free-floating car-sharing services have been taken off the market because of profitability challenges, not only because of the lack of economies of scale.

Even Daimler and BMW, which combined their Car2Go and DriveNow services into ShareNow, have withdrawn from major cities and countries (e.g. Florence, London, Milan, Brussels and North America). Free-floating car sharing will likely continue to be part of multi-modal mobility solutions in the future, but there will be no or only very few additional cities added to the portfolio in the short term due to the challenges around profitability. Free-floating car sharing will not be a disruptive force to inner-city mobility. It will be a niche play, if it can be operated profitably.

The outlook

Stationary car sharing will continue to complement multi-modal mobility. With the current trend towards flexible work arrangements, suburban areas regain attractiveness. Stationary car-sharing services may add further value for those areas. Peer-to-peer offers have grown through the pandemic as people continue to avoid public transport. Retail locations, or car dealers, may find a niche to offer such services. Rental companies could also enter the market with shorter-term, more flexible arrangements.

Peer-to-peer ride hailing will continue to operate successfully in a niche. Professional-service ride hailing (e.g. Uber, Lyft) will continue to face profitability challenges. Ride hailing in its current form adds price pressure on the backs of drivers that are often self-employed.

In the medium term, professional-service ride hailing could benefit from autonomous driving Level 4, as this will replace the driver. Within the next five to 10 years, it may be suitable for very specific high-utilisation cases as the technology is very expensive. It will not be used in mixed-traffic situations any time soon, due to safety and liability concerns. An example could be autonomous ride hailing to bring people from a Park’n’Ride area to an out-of-city access point for existing public-transport infrastructure. Cities that rely on a highly-utilised public-transport infrastructure will not allow Waymo and other operators to take up and load off passengers at inner-city access and switchover points for public transport. The reason is that cities need to scale and increase utilisation of public transport and to manage car traffic.

TCO Dashboard: D-SUV BEVs uncompetitive because of incentive ineligibility

In the third of a new series that considers total cost of ownership (TCO), Autovista Group has created a dashboard comparing the retail prices (including taxes) and TCO of leading D-SUV battery-electric vehicles (BEVs) in France, Germany, Spain and the UK. Senior data journalist Neil King discusses the findings.

Autovista Group’s TCO analysis reveals that D-SUV BEVs will struggle to compete with petrol and plug-in hybrid D-SUV models in France, Spain and the UK as their list prices exceed the price ceiling to be eligible for government incentives. Even in Germany, the TCO of fully-electric D-SUV models is only on a par with petrol models because of the €7,500 incentive. However, the plug-in hybrid (PHEV) BMW X3 has a lower TCO than comparable fully-electric and petrol models, despite only being entitled to a €5,625 subsidy.

TCO Dashboard D-SUV Segment November 2020

Incentive ineligibility

The price positioning (including taxes) of the D-SUV BEVs under review, (Audi e-Tron, Jaguar I-Pace and Mercedes-Benz EQC) is around €70,000 in continental Europe (£65,000 in the UK), This exceeds the price caps of €60,000 in France, €45,000 in Spain and £50,000 in the UK.

Without the aid of subsidies, the D-SUV BEVs are at least €6,000 more expensive than our reference plug-in hybrid model, the BMW X3 PHEV, and €17,000 costlier than the 2.0-litre petrol BMW X3 in France. In Spain, the price premium over the X3 PHEV for the cheapest D-SUV BEV under review, the Mercedes-Benz EQC, is over €17,000 and the Mercedes BEV costs about €28,000 more than the petrol X3. Price differences are similar in the UK too when converting the British Pound to Euro at current exchange rates. In Germany, the subsidy helps to close the pricing gap but the BEVs still cost at least €6,000 and €11,000 more than the X3 PHEV and the petrol X3 respectively.

Full-size electric SUVs can therefore only compete on price against petrol and plug-in hybrid rivals if attractive list price positioning is combined with healthy government support. List prices and/or price ceilings for incentives therefore need to be lower, and the incentives higher for these models to gain momentum.

Discounts

Pricing data is provided in the local currency for the same five models in each market, including retail list prices (including taxes), incentives, discounts, and a final adjusted retail price. The TCO is calculated as the sum of total acquisition costs and total utilisation costs. Acquisition costs cover depreciation, financing and acquisition taxes. Total utilisation costs consist of servicing, fuel, wear, tyres, insurance, and utilisation taxes.

These standard TCO results do not factor in discounts that buyers may negotiate on petrol competitors such as the BMW X3. For this reason, TCO calculations are also provided with discounts of 10% and 20% applied to the 2.0-litre, 184-hp petrol BMW X3 in this analysis.

Emissions implications

The upshot is that there is not a compelling argument for consumers to switch to electric full-size SUVs across Europe. Even in Germany, consumers are likely to favour petrol power as the BEVs do not offer a sufficiently attractive TCO advantage. PHEVs may fare better but the cost savings come with the inconvenience of charging and if the battery is not recharged, which is common among PHEV owners, the savings would of course be eroded.

This is a concern as SUVs continue to gain in popularity and, in turn, are driving up vehicle emissions. Whereas B-segment and C-segment BEVs offer competitive TCO, albeit only because of incentives, there is an argument that this is more important for SUVs as governments and carmakers alike seek to reduce pollution levels. Higher incentives across Europe, along with lower prices and incentive ceilings, would also provide a much-needed boost as the automotive sector contends with the fallout from the coronavirus (COVID-19) pandemic.

Click here or on the screenshot above to view the pricing and TCO dashboard for the D-SUV segment models under review in France, Germany, Spain and the UK.

Click here for the TCO dashboard for C-segment models, and here for the TCO dashboard for B-segment models.

Making waves with EV infrastructure reform

A new clean-energy strategy aimed at upgrading buildings was recently published by the European Commission. As the automotive industry gears up for a new era of electromobility, the renovation wave has the potential to transform the legislation around electrically-chargeable vehicle (EV) infrastructure. Autovista Group Daily Brief journalist Tom Geggus spoke with ChargePoint to find out more.

Christelle Verstraeten – ChargePoint

‘We were extremely pleased with the announcement of the renovation wave for a very simple reason, because it touches upon private buildings,’ said Christelle Verstraeten, ChargePoint’s EU Policy Lead. At an EU wide level, everything related to publicly-accessible charging infrastructure falls under the alternative-fuels infrastructure directive (AFID), which is undergoing evaluation with a revision proposal due next year, she explained. This makes sense given that the directive was first adopted in 2014, making it somewhat dated when considering the advance of EV technology and demand.

‘But if you talk about every charger that needs to be put in a private parking space, either at home or even possibly a private workspace, this is not AFID, it is the energy performance of buildings directive (EPBD), which is part of this renovation wave,’ Verstraeten said. As private locations are central to EV recharging, calls for greater development of this directive were made: ‘we needed a higher ambition from the EU to deploy charging stations in that space.’

Currently, under article 8 of the EPBD, EU member states are required to ensure new buildings and those undergoing renovation have ‘ducting infrastructure’ installed. More specifically, this means; ‘conduits for electric cables, for every parking space to enable the installation, at a later stage, of recharging points for electric vehicles,’ when a specific set of criteria is met.

So, there was a sense of relief when the European Commission confirmed the EPBD would be swept up in the renovation wave. ‘It is a good thing and it will be very complementary with the alternative-fuels infrastructure directive, because it is going to be private and public at the same time.’ Ensuring EVs are supported by a fully-functioning charging network will require pushing for advances on both the private and public front.

For EU member states, these directives like the EPBD act as baseline targets, which they can build upon and even exceed. Verstraeten explained that in France, the obligation to upgrade infrastructure was extended to existing buildings. Meanwhile, with its relatively high rate of EVs and contrastingly low number of garages, Amsterdam adopted a more tailored approach to installation. EV owners can ask for a charging station to be installed in the street if they are unable to charge at work or at home.

ChargeUp Europe

However, it appears current directives have resulted in fragmented approaches to infrastructure across Europe. ChargeUp, a new EV-charging industry alliance formed this year, wrote a letter to the European Commission stressing the need for a harmonised approach to the emerging market.

‘To date, we have noted that the existing AFID directive has been poorly implemented in parts of the EU and that its legal basis has led to ineffective enforcement,’ ChargeUp’s letter reads. ‘This has resulted in varying and inadequate EV-charging coverage, diverging national market approaches, different technology specifications and local technical requirements.’

The alliance pointed to fragmentation in metering requirements, mechanical-shutter specifications and concessions for charging along main traffic routes. This market confusion then becomes a barrier to investment, while lowering the potential of pan-European connectivity.

InfoGrafik Chargeup Empfehlungen — *Source: ChargeUp*

ChargeUp also pointed out that while the EPBD is a step in the right direction for EV charging, it is likely to have very limited outcomes due to its current exemptions. As part of the renovation wave, the group recommended revising infrastructure ambitions within the directive. ‘Increased cabling and ducting requirements need to come with increased ambition for the installation of charging points for the whole building stock, which also provides parking spaces,’ ChargeUp explained.

The legislative puzzle

Verstraeten explained that upcoming reviews will have to bring together all the different legislative puzzle pieces, like the AFID and EPBD, to form a full picture of how infrastructure can operate in harmony across Europe. Directives can set clearly defined standards and expectations, allowing providers like ChargePoint to get a better understanding of the market and where it is heading.

‘For us, if we have a clear target, it is actually easier to understand how the market is going to evolve and provide more security and certainty,’ Verstraeten said. This confidence will also extend to the consumer, where a greater understanding of the incoming infrastructure will provide a level of certainty and confidence, increasing the likelihood of EV adoption.

But because these directives do only act as targets, it still falls to individual member states to come up with goals to reach and agendas to implement. Verstraeten points out that, even then, there are still questions that cannot simply be answered by creating requirements at the EU level.

‘It is not only about having the obligation to put a charger in your garage if you live in a multi-family building,’ she said. ‘It is also about who is going to pay for that connection, and how the decision-making happens between the different owners of the buildings.’ While more granular issues like these will continue to cause ripples, it is only with a strong legislative foundation that Europe can hope to build EV infrastructure worthy of the electromobility tidal wave.

To find out how the electricity industry thinks the renovation wave will change EV charging, read Tom Geggus’ interview with the electricity industry association, Eurelectric.

Monthly Market Dashboard: RVs have peaked in Europe

In the second edition of a new monthly initiative, Autovista Group has created a dashboard showcasing the latest data on residual values, average selling days, the fastest-selling used cars and the residual-value outlook in France, Germany, Italy, Spain and the UK. Senior data journalist Neil King discusses the findings.

Autovista Group’s new interactive monthly market dashboard (MMD) reveals that the average residual value (RV) of cars aged 36 months and with 60,000km grew year on year in all the Big 5 European markets in November. However, there are clear signs that RVs have now peaked, with values lower than reported for October in all countries except France, which reported month-on-month pricing growth of just 0.1%.

RV retention, represented as RV%, grew year on year in all markets except Germany. The highest growth in RV% terms was in the UK, where the average RV% was 47%, equating to a healthy 15.1% change compared to November 2019. Nevertheless, even residual values in the UK were lower than in October in both value and retention terms.

The UK has enjoyed the strongest rally in used-car prices since Europe emerged from lockdowns. This was driven by the release of pent-up demand, and a starker vehicle-supply challenge than any other market, which translated into higher RVs as used-car demand outstripped supply.

However, as reported in our latest coverage of the ‘three-speed’ development of RVs across Europe, RVs in the UK have been descending from their great height since late October as pent-up demand is broadly satisfied and new-car supply has improved. With England back in lockdown until early December, and the Brexit transition period ending on 31 December, a further descent is expected as the year-end approaches. ‘With the new lockdown, it is likely that RVs will continue to fall from their high 2020 position back to where we forecast,’ commented Anthony Machin, head of content and product at Glass’s.

Rapid rehoming

In addition to the growth in RVs in most markets during November, three-year-old cars are also selling quicker than a year ago in all the major European markets, except Spain. Three-year-old cars are selling the quickest in the UK, moving on after an average of less than 34 days. However, the greatest reduction in the average number of days for 36-month-old cars to sell, compared to November 2019, was in France. These vehicles now have to wait on average only 35 days to find a new buyer in France, sitting idle for a significant 22% fewer days than in November 2019.

The three fastest-selling models in France in November 2020 were all Audi models. The A6 took just 11 days to find a new home and the A5 and A4 both sold after about 15 days on average. Following the Audi trinity, the fastest-selling model across the major European markets was the Volvo XC90 in Italy, which took only 17 days to be rehomed in November.

RVs go into reverse

The new MMD also features the latest Autovista Group RV outlook for the major European markets. The new downward trend for RVs is unfortunately forecast to continue in 2021, with prices of used cars in the 36 month/60,000km scenario going into reverse in all the Big 5 European markets. In the November update, the RV outlook for Spain and Germany was subtly revised. Crucially, used-car prices are now also forecast to decline in Germany in 2021, albeit by only 0.7%. The weakest outlook is for Italy, where RVs are currently forecast to be 3.9% lower by the end of 2021 than at the beginning of the year.

Click here or on the screenshot above to view the monthly market dashboard for November 2020.

Podcast: Used cars and ICE bans as manufacturers get smart

The Autovista Group Daily Brief team discusses the latest used-car figures from around Europe and the implications of internal combustion engine bans, as manufacturers establish smart-city projects to develop sustainable infrastructures…

Launch Report: Mazda MX-30

The new Mazda MX-30 has an innovative crossover style that is between a compact SUV and a coupe, with design elements such as rear-hinged doors, sharp-edged wheel arches, rear lights inspired by the MX-5 roadster, and a swooping roofline.

The modern, high-quality interior features a minimalist and well-finished dashboard, and standard equipment is comprehensive, including LED headlamps, satnav, and a head-up display. With a complete list of advanced driver-assistance systems (ADAS), safety is a strength of the MX-30, which has recently been awarded five stars by Euro NCAP.

The MX-30 charges to full battery capacity in good time, but the range of about 200km (WLTP) is relatively low, even compared to other models that are not fully charged. However, the purpose of the MX-30 is to present an eco-friendly vehicle, and the battery was selected as it has a lower impact on the environment in terms of CO2 emissions during production, as well as energy consumption. There are currently no versions with extended battery capacity, but space in the engine compartment supports rumours of a range-extender variant with an additional rotary-style engine.

List prices are typically slightly lower than for C-SUV rivals but higher than for electric hatchback models. In Germany, the €9,000 incentive for battery-electric vehicles (BEVs) gives an adjusted retail price from about €23,000, which is even on a par with the petrol-powered Mazda CX-30 C-SUV.

Click here or on the image below to read Autovista Group’s benchmarking of the Mazda MX-30 in France, Germany, Italy, Spain and the UK.

We present new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Used-car transactions grow in France and Germany in October

Autovista Group senior data journalist Neil King considers the latest used-car market volumes published by the respective associations in the major European markets.

The volume of used-car transactions grew year-on-year in October 2020 in France and Germany. Used-car sales increased by 11.4% and 2.6% year-on-year respectively in France and Germany in the month, and Spain and Italy only suffered modest respective declines of 1.6% and 5.7%. Through to October, the used-car markets of France and Germany had single-digit declines, of 4.1% and 3.5% respectively, whereas there were double-digit contractions in the used-car markets of Italy and Spain.

Used-car transactions, year-on-year % change, October and year-to-date

Gebrauchtwagen-Transaktionen, Veränderung gegenüber dem Vorjahr in %, Oktober und seit Jahresbeginn

Sources: Sources: CCFA, KBA, ANFIA, GANVAM/IEA

In the UK, used-car sales data are not yet available for October, but the country’s used-car market contracted by 17.5% year-on-year in the first three quarters of 2020. The volume of used-car transactions declined in all the four tracked major continental European markets too, but the downturns were significantly less dramatic than the contractions in new-car registrations.

Used-car transactions and new-car registrations, year-on-year % change, Q1-Q3

Gebrauchtwagen-Transaktionen und Neuzulassungen, Veränderung gegenüber dem Vorjahr in %, Q1-Q3

Sources: CCFA, KBA, ANFIA, ANFAC, GANVAM/IEA, SMMT

The used-car market in the UK contracted by 17.5% in the first three quarters of 2020, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT) on 10 November. However, this is only about half the downturn in new-car registrations in the country in the same period.

Following a comparatively modest decline of 8.3% in the first quarter of 2020, as the coronavirus (COVID-19) lockdown from mid-March negated growth in January and February, there was a 48.9% slump in the second quarter as dealer forecourts remained closed for most of this period.

UK busiest quarter since 2016

The used-car market rebounded to increase by 4.4% in Q3 as dealers reopened and lockdown measures were relaxed. ‘During the busiest quarter since the end of 2016, some 2,168,599 transactions took place between July and September, 92,217 more than the same period in 2019, with September recording the largest growth, up 6.3%,’ the SMMT reports.

However, as England has returned to a state of lockdown and the rest of the UK wrestles with stark rises in COVID-19 cases, the final quarter of 2020 will be challenging.

‘It is encouraging to see used-car sales returned to growth but, as the pandemic continues and outlets in many areas are being made to close again, the short-term outlook is less positive. Given these premises are often proven to be COVID-secure, we need them to reopen quickly to protect vital jobs and ensure no further delay to the fleet renewal necessary to deliver environmental improvements,’ commented Mike Hawes, SMMT chief executive.

Continental contractions

There have been similar contractions of the used-car markets in Spain and Italy. The latter has suffered the most, with 17.3% fewer changes of ownership in the first 10 months of 2020 than a year earlier, according to the latest data published by ANFIA. Nevertheless, this compares to a 30.9% contraction of the new-car market and is a significant improvement on the 31.6% decline in used-car transactions in the first half of 2020. Many buyers of both new and used cars decided to hold off until government incentives came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). This new scheme came on top of the Ecobonus scheme, which incentivises cars producing less than 20g of CO2/km.

Used-car sales fell 14.2% year-on-year in Spain in the first 10 months of 2020, according to the Spanish car dealers’ association GANVAM. This compares to a 36.8% decline in new-car registrations. As in Italy, the used-car market has recovered well, given that there were 31.7% fewer used-car transactions in the first half of 2020 than a year earlier.

However, the market turned negative in October after five months of growth. ‘This change in trend is marked, to a large extent, by the impact that the coronavirus crisis is having on operations with used cars from rental fleets, known as buybacks (since after about six months the brand has an agreement to buy back that fleet to sell it on the second-hand market). As a consequence of the fall in tourism, the car-rental companies are not renewing their fleets. In fact, registrations in this channel accumulated a drop of 60% until October and, therefore, there is a large vacuum in the supply of pre-owned used vehicles, which translates into a 34% drop in sales of second-hand models aged less than a year,’ GANVAM reports.

In France, industry association CCFA reports a modest 4.1% decline in used-car sales in the first 10 months of 2020. As elsewhere, this is a significantly better performance than the 26.9% fall in new-car registrations.

However, Germany’s used-car market has weathered the COVID-19 storm better than all the other major European countries. There were only 3.5% fewer changes of ownership in the first 10 months of 2020 compared to the same period last year, according to the industry association KBA. New-car registrations have also suffered less than in the other major markets, but were still down 23.4% in the year-to-date, therefore being outperformed by used-car demand here too.

Residual-value recovery

As Europe’s used-car markets have proven more resilient than new-car markets throughout 2020, the impact on residual values (RVs) has been predominantly positive. Autovista Group’s COVID-19 tracker, which tracks 12 European markets, shows that the index of RVs, compared to early February, has returned to pre-crisis levels in all countries except Portugal and Finland. The measurements began in February, with an index value of 100.

Residual-value index of used cars, 2 February to 15 November

Restwertindex für Gebrauchtwagen, 2. Februar bis 15. November

Source: Autovista Group, Residual Value Intelligence, COVID-19 tracker

However, as Europe battles a second wave of COVID-19, new lockdowns, growing stock volumes, incentives for new cars, and rising unemployment, Autovista Group expects a downward trend for the end of the year, especially for younger cars.

Further details on the Autovista Group outlook for residual values are published in the November update of the Autovista Group whitepaper; How will COVID-19 shape used-car markets?

EU new-car registrations declined 7.8% in October

Autovista Group senior data journalist Neil King explores the latest figures released by the European Automobile Manufacturers’ Association (ACEA) as second-wave lockdowns bring more downturns.

New-car registrations in the EU declined 7.8% year-on-year in October. Volumes fell from 1,034,669 units to 953,615. This marks a return to the market contractions suffered every month in 2020, except for the modest growth in September. The decline is an improvement on the dramatic double-digit declines suffered in March to June, and again in August, but does not bode well as the region contends with a second wave of coronavirus (COVID-19) cases and lockdowns.

EU new-car registrations, year-on-year % change, January to October 2020 and year-to-date (YTD)

EU-Neuzulassungen, Veränderung gegenüber dem Vorjahr in %, Januar bis Oktober 2020 und seit Jahresbeginn (YTD)

Source: ACEA

All EU new-car markets contracted last month – apart from Ireland and Romania, which enjoyed year-on-year growth of 5.4% and 17.6% respectively. This renewed EU-wide downturn was to be expected given the year-on-year declines already reported in France, Italy, Spain, and even Germany in October.

Single-digit declines were reported in France, Germany and Italy, although the decline in Italy was just 0.2% and the result would have been positive (up by about 4%) had there not been one less working day. This follows the 9.5% growth in new-car registrations in September, due to the new government incentives that came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). While the market still contracted in that month, demand improved but delivery times delayed many registrations until September and October.

On a less positive note, there was a double-digit decline of new-car registrations in Spain in October. The MOVES II and RENOVE schemes were introduced in July, and the new-car market saw a 1.1% increase in the month. Since then, however, there have been respective monthly declines of 10.1% and 13.5% in August and September, and now 21.0% in October. It is therefore clear that weak underlying consumer demand is the problem in the country. Measures to deal with the second wave of COVID-19 infections, and the calculation of the registration tax based on WLTP emissions figures from January 2021, are further complicating the recovery.

New-car registrations, year-on-year % change, October 2020 and year-to-date (YTD) 2020

Pkw-Neuzulassungen, Veränderung gegenüber dem Vorjahr in %, Oktober 2020 und seit Jahresbeginn (YTD) 2020

Source: ACEA

In the smaller EU member states, year-on-year contractions of more than 20% were reported in seven markets, including Finland, Slovakia and Slovenia. However, some markets were far more resilient, with downturns of less than 5% reported in Austria and Hungary.

Lockdown negativity replaces pent-up positivity

In the first 10 months of 2020, registrations of new cars in the EU fell by 26.8%. Even the market downturn in October continued the improvement in the year-to-date contractions, which bottomed out at 41.5% in the first five months of the year. The greatest loss among the major EU markets was in Spain, which has contracted by 36.8% in the year-to-date, ahead of only Croatia (down 43.5%) and Portugal (down 37.1%).

As the positive contribution of pent-up demand is ultimately exhausted, the second wave of COVID-19 infections, the severity, duration and geographic spread of lockdowns, and the economic fallout of COVID-19, will define how new-car markets perform in the remainder of 2020 and beyond. The key to recovery revolves around countries agreeing budgets for 2021, and improving economic certainty and consumer confidence to boost spending. The allocation of aid resources provided by the European Recovery Fund, agreed on 21 July, will also play a pivotal role in shaping the forward outlook for Europe’s new-car markets.

Manufacturer performance

Among the leading European carmakers, the BWW Group, Ford, Mazda, Mitsubishi and Nissan all registered more than 10% fewer new cars in the EU in October 2020 than in October 2019. Mazda suffered the greatest loss, with EU registrations down 38.0% year-on-year.

Fiat Chrysler Automobiles (FCA) and the Renault Group, however, managed to register 3.9% and 0.2% more cars respectively in the EU than in October 2019. All other major manufacturers suffered single-digit declines of between 6.2% (Honda) and 9.7% (Jaguar Land Rover) in the month.

Across Europe, manufacturers with a strong electric-vehicle portfolio are expected to perform better than those without as electrically-chargeable vehicle (EV) consumers are less likely to be tempted by used cars instead of new. This is because they tend to be less price-sensitive buyers, but there is also limited availability of the latest electric models on the used-car market. In the year-to-date, Toyota is the best-performing manufacturer in the EU, albeit with registrations down 16.9%, supporting this hypothesis.

In a new video, Autovista Group Daily Brief editor Phil Curry talks through the latest registration figures in the big four EU markets and the UK.

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