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Autovista Group chief economist Dr Christof Engelskirchen and director of automotive agency Car Design Research, Sam Livingstone, discuss how investors value car-producing technology companies above traditional OEMs. As more new entrants come into the automotive industry, what options do traditional players have to engage and attract investment?
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As battery-electric vehicles (BEV) move from the realms of alternative fuel to mainstream automotive technology, the supply chain for the critical component, the battery, needs to be shortened.
Currently, the industry relies on shipments from Asia. To maintain efficiency and reliability of supply as the production of BEVs increases within Europe, a closer network of gigafactories is required. In recent days, announcements suggest efforts are being made to establish a European supply network, saving the industry from potential issues, as seen with the recent semiconductor shortage.
A new company, Italvolt, will establish a gigafactory in Italy, with the first phase of the project scheduled for completion by 2024. Lars Carlstrom, former founder and shareholder of the Britishvolt project created the new company.
Italvolt states that its factory will employ around 4,000 people and be the largest in Europe, with an initial capacity of 45GWh, increasing to 70GWh. The 300,000m2 facility will be built in a yet-to-be-determined location in the country, with investment projected at €4 billion.
‘With the gigafactory project, Italvolt wants to give an important answer to the historic opportunity of green industrialisation, which is affecting all production sectors in a transversal way, representing a turning point for the global economy,’ commented Carlstrom.
The company states that demand for batteries in Europe, primarily driven by the automotive market, will hit 565GWh by 2030, behind only China, with an expected demand of 1,548GWh. Locating its factory in Italy gives it access to another market area, with carmakers such as Stellantis manufacturing in the country.
UK ambition
Following Brexit uncertainty, the UK has seen a swathe of announcements in recent months that have boosted the country’s automotive industry. Vehicle electrification is driving these investments, with the aforementioned Britishvolt project and news that Nissan will bring battery manufacturing to the country.
There could now be a third project that would see a gigafactory developed in Coventry, with the city’s council entering a partnership with the owners of Coventry Airport.
The joint venture partners will develop proposals and submit an outline planning application for a gigafactory in 2021. This will take place alongside regional discussions with battery suppliers and automotive manufacturers to secure the long-term investment.
The UK’s West Midlands area is home to several carmakers, including Jaguar Land Rover (JLR), BMW, and LEVC and Aston Martin Lagonda. The UK government has made up to £500 million (€577 million) available for investment in a battery-manufacturing facility, and the area will be tendering a bid for funding from this pool.
‘Coventry has emerged as a world leader in battery technology,’ said George Duggins, Coventry City Council leader. ‘The city is home to the UK Battery Industrialisation Centre, world-leading research institutions, and the UK’s largest carmaker, JLR, and it is clear to me that Coventry is the right location.
‘Coventry Airport sits at the heart of this powerful automotive research cluster and is the obvious location for a UK gigafactory. It will immediately plug in to a mature automotive supply chain and skills eco-system.’
The plans will have been boosted by news that JLR is to transition its Jaguar brand to a BEV-only marque by 2025, while Land Rover will launch six new battery models, with manufacturing centred in the UK. A supply of batteries on their doorstep would make sense, cutting delivery times and improving the carbon footprint of their BEVs with reduced shipping.
Jaguar is to become an electric-only brand by 2025, as part of parent company Jaguar Land Rover’s (JLR) plans to be a zero-carbon business by 2039.
As part of a new strategy, presented by CEO Thierry Bolloré, JLR has set a path for a sustainable future. The Reimagine plan will see Land Rover produce six battery-electric vehicles (BEVs) in the next five years, with the first variant arriving in 2024. Jaguar will transition all models to BEVs by the middle of the decade.
The carmaker is looking to achieve net-zero carbon emissions across its supply-chain, products and operations by 2039. As part of this, JLR is preparing for the expected adoption of fuel-cell technology, in line with a maturing of the hydrogen economy. Fuel-cell prototypes are set to be seen on UK roads in the next 12 months as part of a long-term investment programme.
‘Jaguar Land Rover is unique in the global automotive industry,’ commented Bolloré. ‘Designers of peerless models, an unrivalled understanding of the future luxury needs of its customers, emotionally rich brand equity, a spirit of Britishness and unrivalled access to leading global players in technology and sustainability within the wider Tata Group.
‘We are harnessing those ingredients today to reimagine the business, the two brands and the customer experience of tomorrow. The Reimagine strategy allows us to enhance and celebrate that uniqueness like never before. Together, we can design an even more sustainable and positive impact on the world around us.’
JLR will make an annual commitment of around £2.5 billion (€2.9 billion) to the plan, including investments in electrification technologies and the development of connected services to enhance the customer experience.
Underpinnings
Land Rover will use its forthcoming modular longitudinal architecture (MLA) platform for upcoming hybrid and BEV models, while also using the company’s electric modular architecture (EMA). Jaguar will build future models on a platform designed exclusively for pure-electric models.
This is part of a plan to consolidate platforms across the business, allowing JLR to focus on efficiency in production and quality of the finished product. It will also help to rationalise sourcing and accelerate investments in the supply chain.
The announcement also included confirmation that JLR will continue to build vehicles in the UK. Its plant in Solihull will become home to Jaguar’s BEV models, while also manufacturing the MLA. The replacement of the current Jaguar XJ model will also not be pursued. With its West Midlands plant geared up for BEV production, it is likely JLR’s site at Castle Bromwich will be repurposed.
The company will substantially reduce and rationalise its non-manufacturing infrastructure. Its executive team and other management functions will move to its Gaydon site to aid cooperation.
Show of faith
The move is good news for the UK automotive industry, which is finding its feet again after years of Brexit uncertainty. JLR’s commitment to the country follows Nissan’s announcement that it will invest in its Sunderland plant and bring battery manufacturing to the country.
‘The news that the UK’s largest automotive business has confirmed its long-term commitment to the UK is very welcome and is an injection of confidence into the wider sector,’ commented Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT). ‘Its roadmap to a future that is built around sustainability, with electrified and hydrogen models as well as investment in connected and digital technologies, aligns with government ambition and increasing consumer expectations.
‘Delivering this ambition, however, will require the UK to improve its competitiveness. The UK automotive industry is essentially strong, innovative and agile, but the global competition is fierce. The UK government must ensure advanced manufacturing has its full support, with a policy framework and plan for growth that reduces costs, accelerates domestic battery production and electrified supply chains, and incentivises R&D and skills development. Every effort must be made to create conditions that will enable the entire sector to flourish.’
Electric future
JLR’s decision to turn its Jaguar brand into an electric-only marque is in line with an industry that is starting to fully embrace the zero-emission technology after years of development. The timescale, stopping the sale of internal combustion engines in around four years, may sound ambitious. However, Jaguar already has a BEV model on the market, the I-Pace, while it has also shortened the number of non-electric models it offers in recent years as part of financial cutbacks.
Therefore, the company is ideally placed to make this announcement with such a short timeline. It will hope that it can achieve these targets before its main rivals, including Audi, BMW and Mercedes-Benz, and therefore take advantage of shifting consumer attitudes towards luxury BEVs.
The move to bring hydrogen fuel-cell vehicles to test this year also shows the company’s proactive thinking. With electric drivetrains moving from development to production, carmakers now have space to consider the alternative fuel. Hydrogen can produce the range and refuelling times of internal combustion engines, while also producing zero emissions. The technology is already used by Toyota and Hyundai. JLR partner BMW is planning to bring a hydrogen model to market next year.
Residual values (RVs) of battery-electric vehicles (BEVs) in the big five European markets are lower than they were at the onset of the COVID-19 pandemic, in both value and retention (RV%) terms, except in the UK. Senior data journalist Neil King explores the latest developments and the challenges for used BEVs.
Registrations of BEVs in the European new-car market, comprising the EU and the UK, grew by 126.5% compared to 2019, to almost 650,000 units. However, the surge in demand for new BEVs is not reflected in Europe’s used-car markets. Consequently, their RVs after 36 months and 60,000 kilometres were weaker in January 2021 than when COVID-19 took hold in March 2020, except for modest growth in the UK.
‘New BEV sales have risen sharply to company-car users over the past 12 months, fuelled by the attractive benefit-in-kind tax rates. With few current incentives available for used buyers. However, there is concern that when these cars come to the end of their contracts, supply may outstrip demand, negatively impacting residual values,’ explained Jonathan Brown, car editor at Glass’s in the UK.
Residual-value development of BEVs, big five European markets, March 2020 to January 2021
Source: Autovista Group, Residual Value Intelligence
These developments are in stark contrast to activity across the whole market. In 2020, new-car registrations in the EU and the UK suffered an overall decline of more than 3.7 million registrations due to COVID-19, equating to a loss of a quarter of the volume. Buoyed by resilient used-car demand, RVs of all cars in the 36-month/60,000km scenario in the big five European markets had returned to pre-COVID-19 levels by mid-November 2020.
Oversupply risks
With price pressure on used BEVs already mounting, this amplifies the question; Who will buy Europe’s used-electric cars? Through a combination of government incentives, improved infrastructure, extended ranges, more choice, and the fear of CO2-emissions fines, forecasts point to electrically-chargeable vehicles gaining a market share of around 40% in Europe by 2030, 80% of them being BEVs. For BEVs alone, that creates a €92 billion remarketing challenge, which needs to be addressed.
Unless demand for BEVs gathers pace in Europe’s used-car markets, RVs will continue to suffer and there is a risk of oversupply to EV-import markets too. As yet, there are currently no signs of saturation on these markets, and the demand for BEVs in Norway, for example, is expected to grow by 13% annually over the next five years, according to Rødboka (part of Autovista Group) in Norway. However, this may no longer be sufficient to resolve the RV conundrum created by the government incentives for EVs across Europe.
‘Continuing the current government policy will continuously add pressure to the used EV market as volumes are still pushed. The ability of Norway, for example, to absorb German EVs has a very limited impact on the upcoming local problems, though it ‘helped’ in the past. The entire Norwegian new-car market is about 150,000 vehicles a year, so let’s assume they take 100,000 used cars up to four years of age per annum. Germany alone ‘produced’ 230,000 used EVs in 2020, with different future ages, depending on whether they were fleet or tactical registrations. Thinking optimistically of 60% being absorbed locally, how many of the remaining 90,000 used cars should Norway import to solve our volume problem? And registrations of new EVs are still growing,’ cautioned Andreas Geilenbrügge, head of valuations and insights at Schwacke.
Diverging values
RVs of BEVs are below those of petrol cars in all the big five European markets, except Italy. Even here, however, the gap has narrowed to BEVs only having a 0.7 percentage point (pp) advantage over petrol cars, compared to 4.6 pp in March 2020. Furthermore, the new purchase incentives for BEVs, introduced by the Italian government on 1 January 2021, will reduce their used prices and this minor advantage is therefore expected to turn negative imminently.
RV% development of petrol cars and BEVs, Italy, March 2020 to January 2021
Source: Autovista Group, Residual Value Intelligence
In the other major European markets, the RV disadvantage of BEVs compared to petrol cars has widened since March 2020. The greatest divergence has occurred in Germany, where the gap has widened by just under 4 pp and stood at 10 pp in January 2021.
The divergence accelerated notably following the introduction of enhanced incentives on 1 July 2020, supporting the assumption of a forthcoming negative impact on values of BEVs in Italy. The federally-backed buyer incentive scheme doubled to €6,000 for BEVs costing less than €40,000, such as the Volkswagen ID.3. When paired with the manufacturer bonus of €3,000, customers are able to save €9,000. BEVs with a net price between €40,000 and €65,000, like the Audi e-Tron Sportback, are eligible for €5,000 in government subsidies, alongside a €2,500 OEM bonus.
‘COVID forced the German government to support the ‘suffering’ automotive industry. And as it wasn’t popular to drive internal-combustion engine (ICE) sales, they decided to make a push on BEVs and plug-in hybrids (PHEVs), but not standard hybrids (HEVs), by doubling the incentives. But the lack of used-EV support puts double pressure on RVs by lowering transaction prices of new EVs with the incentive, while not incentivising used examples,’ Geilenbrügge emphasised.
RV% development of petrol cars and BEVs, Germany, March 2020 to January 2021
Source: Autovista Group, Residual Value Intelligence
The biggest gap in RVs between BEVs and petrol cars remains in France. The difference in January 2021 stood at 18.6 pp, although this is only slightly wider than the 17.9 pp gap in March 2020. On a positive note, this sizeable gap in France should at least stabilise following the introduction of a €1,000 incentive for used BEVs on 1 January.
‘Despite the introduction of the bonus on the used-car market, sales of used BEVs remain low. France is still lacking charging points and 25% of them are out of order, which is not supporting the development of the used-car market. The only impact of the bonus, from my point of view, would be to stabilise RVs a bit more,’ commented Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux.
RV% development of petrol cars and BEVs, France, March 2020 to January 2021
Source: Autovista Group, Residual Value Intelligence
All governments should look into providing incentives to encourage used-BEV ownership, but these do not need to be straightforward purchase incentives. Lower energy costs for charging BEVs and visible expansion of the charging network would also be powerful signals.
Autovista Group is hosting an online seminar on the remarketing risk of electric vehicles on 23 February – join here.
The Autovista Group Daily Brief team takes a look into some of the biggest automotive news stories of the past fortnight. Phil Curry and Tom Geggus discuss January’s new-car registrations, how carmakers like Ford, Hyundai, and Daimler are tackling electromobility, and whether there should be automotive shows this year.
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.
Show notes
EU new-car registrations to start recovery in second half of 2021
Deceptively shaky start to 2021 new-car registrations across Europe
Germany: new-car registrations down 31% in January
UK new-car market suffers ‘worst start to the year since 1970’
EVs make great strides across European markets in 2020
Ford trebles size of UK EV-charging network
Hyundai boosts zero-emission mobility
Daimler to become Mercedes-Benz as it spins off truck business
Hyundai Motor Company is not in talks with Apple over autonomous electrically-chargeable vehicles (EVs). The companies ended wide-spread speculation over a potential collaboration on Monday (8 February) with a regulatory filing.
The announcement dealt a $3 billion (€2.49 billion) blow to the carmaker’s market value, with its stocks sliding by 6.2%. Kia, as the rumoured potential operational partner, saw a 15% drop on the stock market, equalling a $5.5 billion loss in value.
Cooperation requests
‘We are receiving requests for cooperation in joint development of autonomous electric vehicles from various companies, but they are at early stage and nothing has been decided,’ the carmakers said in an investor update, as reported by Reuters.
‘We are not having talks with Apple on developing autonomous vehicles,’ it confirmed. Autovista Group’s Daily Brief did contact Hyundai, Kia and Apple for further comment on this latest revelation, but no response was received prior to publication.
Rumours had been rife over the potential battery-electric vehicle (BEV) tie-up. ‘We are agonising over how to do it, whether it is good to do it or not,’ a Hyundai executive aware of the Apple discussion said last month. ‘We are not a company which manufactures cars for others. It is not like working with Apple would always produce great results.’
Collaborative company
Hyundai is well known for its collaborative efforts across the board. These include everything from sponsoring global EV challenges, to investing in autonomous vehicle start-ups and even getting involved in robotics. So, the supposed talks with Apple fell well within the possible activity of this cooperative corporate mindset.
Addressing the company at the start of this year, company chairman Euisun Chung outlined the importance of this approach alongside its effort to become a global EV powerhouse as it launched its Electric Global Modular Platform (E-GMP), which will power its new Ioniq line-up.
‘With the launch of new vehicles based on the recently-released, electric-vehicle platform, the E-GMP (Electric-Global Modular Platform), we plan to provide attractive eco-friendly mobility options that aptly reflect customers’ diverse tastes and needs at more reasonable prices,’ he said.
‘Furthermore, our hydrogen fuel-cell technology, recognised as the world’s most advanced, will be expanded to diverse mobility and industrial sectors to help achieve carbon neutrality under the ‘HTWO (Hydrogen + Humanity)’ brand.’
This focus on electrification and hydrogen falls into a wider automotive trend, which emphasises the need for zero-emission mobility alongside the digitisation of vehicles. The sector is developing greener, smarter cars not only to meet emissions targets but also rising customer expectations. Consumer are becoming increasingly enveloped by new technologies, with mobile phones capable of connecting to every aspect of their lives, so the automotive industry is left playing catch-up.
Daimler is to undergo a fundamental change in its structure, spinning off its trucks business and renaming itself Mercedes-Benz. The move is intended to help the company unlock the full potential of its business in a zero-emission future.
Daimler Truck will become a listed company with a majority stake distributed to Daimler shareholders. Mercedes-Benz will continue to develop models for both the passenger car and van markets. Diverging the business will allow each unit to focus on new technologies that are impacting their respective sectors.
Signs of a shift in policy emerged last year when Daimler announced it was developing hydrogen systems for its trucks business while cancelling plans for fuel-cell-powered cars. As the commercial and car markets are likely to take different paths towards zero-emissions, each company will now be able to put funding and resources into its own development rather than share the pot and restrict development as a result. The split is expected to occur at the end of this year, with an extra-ordinary shareholder meeting in Q3 to discuss the final plans and obtain approval.
Corporate structure
‘This is a historic moment for Daimler. It represents the start of a profound reshaping of the company. Mercedes-Benz Cars & Vans and Daimler Trucks & Buses are different businesses with specific customer groups, technology paths and capital needs.’ said Ola Källenius, chairman of the board of management of Daimler and Mercedes-Benz.
‘Both companies operate in industries that are facing major technological and structural changes. Given this context, we believe they will be able to operate most effectively as independent entities, equipped with strong net liquidity and free from the constraints of a conglomerate structure,’ he added.
As part of a more focused corporate structure, both Mercedes-Benz and Daimler Truck will be supported by dedicated captive financial and mobility service entities. The company plans to assign resources and teams from its current Daimler Mobility business to both brands.
‘We have confidence in the financial and operational strength of our two vehicle divisions. And we are convinced that independent management and governance will allow them to operate even faster, invest more ambitiously, target growth and cooperation, and thus be significantly more agile and competitive,’ commented Källenius.
Sustainability needs
Daimler had been struggling in recent years, announcing a series of profit warnings and initially struggling with its CO2 targets following the introduction of the Worldwide Harmonised Light-Vehicle Test Procedure (WLTP). Last year, the company managed to turn things around, tripling sales of plug-in hybrid (PHEV) and battery-electric (BEV) vehicles, and forecasting that it met its emissions figures to avoid any EU-sanctioned penalties.
‘We will continue to push forward with our ’Electric first’ strategy and the further expansion of our electric model initiative. Based on our current knowledge, we expect to meet the CO2 targets in Europe again in 2021,’ said Källenius.
With separate CO2 targets for passenger cars and trucks, Daimler will be keen to keep up this momentum, especially with stricter EU regulations for 2025 and 2030. Therefore, separating its trucks business will give Mercedes-Benz more focus on ensuring it meets guidelines by focusing on its electrification plans.
Further strategy
In October, Daimler unveiled a raft of plans that would see Mercedes-Benz focus on the luxury market with a shift to electrically-chargeable vehicles (EVs). The company plans for the number of internal combustion engine (ICE) models it offers to drop 70% by 2030. Part of this plan could see its range of compact models decrease as it focuses its product portfolio on the most profitable parts of the market.
‘We intend to build the world’s most desirable cars,’ said Källenius at the time. ‘It is about leveraging our strengths as a luxury brand to grow economic value and enhancing the mix and positioning of our product portfolio. We will unlock the full potential of our unique sub-brands – AMG, Maybach, G and EQ. Our strategy is designed to avoid non-core activities to focus on winning where it matters: dedicated electric vehicles and proprietary car software. We will take action on structural costs, target strong and sustained profitability.’
By divesting itself of Daimler Trucks, the carmaker can now focus on expanding new technologies in the passenger car market, including expanding its EQ line-up of BEVs. It plans to increase its range in the shortest space of time, meaning product development resources and expertise will be shifted to electric-drive projects.
New-car registrations fell by 31.1% in Germany during January compared with the same month in 2020. A total of 169,754 passenger cars were registered according to the latest figures from the country’s automotive authority, the Kraftfahrt-Bundesamt (KBA).
This aligns with the Autovista Group expectation of a return to year-on-year declines of about 30% in countries where dealers were closed for physical sales. Germany is the largest European market affected in January, with the restrictions currently in place until 14 February.
The German market was also hampered by the return to a 19% VAT rate since 1 January 2021, which had been reduced to 16% from 1 July to 31 December 2020. Autovista Group estimates that this change advanced about 40,000 new-car registrations into December 2020, when the market rose 9.9% compared to the previous reporting period. Furthermore, the shortage of semiconductors will have invariably disrupted some new cars’ deliveries in the country last month.
New-car registrations, Germany, y-o-y % change, January 2020 to January 2021
Source: KBA
There were two fewer working days in January 2021 than in January last year. On a comparable working-day basis, Autovista Group estimates that registrations fell by about 23% in the last month, and annualised new-car demand was at 2.94 million units. As in France, Spain and Italy, the start to 2021 of Germany’s new-car market has been deceptively shaky.
Given the mitigating factors in January, this bodes relatively well for the German market, which Autovista Group currently forecasts will recover to 3.15 million units in 2021, 8% up on 2020. This is at the same level as the German automotive industry association VDA forecasts. However, the VDA rightly highlighted that 2021 will still be ‘significantly lower than the approximately 3.5 million new registrations of the years 2017 to 2019.’
‘We assume that the second half of 2021 will bring an improvement, if the progress in vaccination is so great that the pandemic can be noticeably contained in everyday life,’ commented VDA president Hildegard Müller. This echoes the EU-wide sentiment expressed by the European Automobile Manufacturers’ Association (ACEA). ‘The year 2021 will decide the future of the industry in Germany and Europe. We are at a turning point that will set the direction for the following decades,’ Müller added.
Brands and segments
German brands reflected January’s negative performance. Audi (down 47.4%), Mini (down 41.5%), and Ford (down 41.1%) saw the most significant declines. Meanwhile, Porsche posted the smallest losses, with a drop of 3.9%. Volkswagen maintained the largest market share, of 20.1%.
Among the imported brands, Tesla and Volvo exceeded their registration results for the same reporting period in 2020, up 23.4% and 9.4% respectively. In contrast, declines of more than 70% were seen at Jaguar and Honda (down 77.9% and 70.1% respectively), while Fiat recorded the smallest decrease of 14.8%. Skoda was the strongest imported brand for market share, with 6.7% of registrations.
Motorhomes were the only segment to achieve growth, of 5%, to capture a market share of 1.9%. Meanwhile, small MPVs saw the most severe decline at 63.6%, and full-size MPVs fell 55.3%, sports cars slumped by 43.2% and utility vehicles dropped by 42%. SUVs were the strongest segment with 21.9% of the market, despite a decrease of 26.4%, followed by the compact segment with a 19.1% share, down 32.2%.
Fuel types
Registrations of petrol-powered cars fell by half (50.3%) in January 2021 compared to the previous reporting period, taking 37.1% of the market. Diesel also dropped by 44.8%, representing just over a quarter of new cars (26.1%). In contrast, electrically-chargeable vehicles (EVs) saw year-on-year growth of 117.8%, with a total of 16,315 new units registered, taking their share to 9.6%.
Some 45,449 hybrids were registered in January, up 47.5%, while securing 26.8% of the market. A total of 20,588 plug-in hybrid units were registered in January, up 138.3%, with a 12.1% share. Natural gas (259) and liquefied gas (340) only accounted for 0.2% of the market last month, recording a combined decrease of 35.5%. The average CO2 emissions of newly registered cars was 125.9 g/km, representing a decrease of 16.9%.
The tipping balance towards EVs, and away from internal combustion engines (ICE), follows on from a trend recorded last year. In 2020, alternative drives made up of hybrid, fuel-cell, gas, hydrogen, and battery-electric vehicles (BEVs), claimed approximately a quarter of all new-car registrations. The German government set out COVID-19 recovery plans as a springboard towards a greener economy, with a greater emphasis on electromobility. In November, it committed a €4 billion stimulus package to the automotive sector, with funds channelled into the adaptation of production lines and incentivising the purchase of EVs.
Vehicles are becoming smarter by the day, from automation to personalisation. But a major building block in these digital developments has hit a bottleneck. Autovista Group Daily Brief journalist Tom Geggus explores the world of semiconductors. Why is there a shortage, which OEMs have been affected, and how could this impact an automotive COVID-19 recovery?
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Show notes
Semiconductor shortage disturbs manufacturing
Semiconductor shortage continues to impact automotive production
The Mokka-e introduces Opel’s (and Vauxhall’s) new design language, which presents clean lines that give the car a premium appearance. The new ‘Vizor’ front is especially distinctive with the lights and radiator, including the new brand logo, forming one cluster. The distinctive two-tone bodywork, differentiating the bonnet and the roof, offers multiple possibilities to personalise the vehicle.
The acceleration of the Mokka-e is rapid compared to most competitors with similar power output, going from 0-100km/h in 8.5 seconds, and the 50kWh battery gives it a range of 322 kilometres on the WLTP cycle. If buyers opt for the 11Kw on-board charger, the car can be recharged, using a 100kW DC fast-charger, to 80% battery capacity in 30 minutes.
The new ‘Pure Panel’ dashboard stands out in the interior, featuring either a 10-inch or 12-inch touchscreen, but there are also physical controls for the infotainment system and climate control. Good price positioning is coupled with a high level of standard equipment from the entry-level trim upwards. Even the basic version of the Mokka-e is equipped with climate control, an automatically-dimming interior mirror, and a light and rain sensor as standard. ‚Eco‘ or ‚Sport‘ driving modes and adaptive cruise control are also included, as are ‘Keyless Start’ and ‘Opel Connect’, with which drivers can request data about the car remotely via smartphone.
Click here or on the image below to read Autovista Group’s benchmarking of the Opel/Vauxhall Mokka-e in France, Germany, the Netherlands and the UK. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.
The European Commission has approved a second Important Project of Common European Interest (IPCEI) that will see €2.9 billion handed out to carmakers, suppliers, technology businesses and energy companies to support research and development in the battery value chain.
The European Battery Innovation project has been prepared and notified by 12 member states. It will see companies such as Tesla, BMW, Fiat Chrysler Automobiles (FCA), Northvolt and Enel X share the funding across four areas of the battery supply chain. The public backing is expected to help unlock an additional €9 billion in private investments, as the Commission seeks to vastly improve Europe’s standing in battery manufacturing. The overall project is expected to be completed by 2028, although each sub-project will have different deadlines within this timeframe.
Funding will cover the entire battery value chain, from the extraction of raw materials, design and manufacturing of battery cells and packs, to the recycling and disposal of units in a circular economy, with a strong focus on continued sustainability.
New technologies
It is hoped that the funding will spur the development of next-generation battery technology that can power vehicles while being produced with little or no impact on the environment. The Commission hopes that the IPCEI will help develop battery technology further, including technological breakthroughs in cell chemistries and production processes, all of which will be in addition to what the first IPCEI, established in 2019, will accomplish.
‘For those massive innovation challenges for the European economy, the risks can be too big for just one member state or one company to take alone,’ comments executive vice president Margrethe Vestager, in charge of competition policy. ‘So, it makes good sense for European governments to come together to support industry in developing more innovative and sustainable batteries. This project is an example of how competition policy works hand in hand with innovation and competitiveness.
‘With significant support also comes responsibility: the public has to benefit from its investment, which is why companies receiving aid have to generate positive spillover effects across the EU.’
Environmental impact
The big focus of the project is sustainability. There is increased awareness of the carbon impact of vehicle electrification, as it starts its big push for market domination. Taking over from fossil-fuel-based technology, and championing the sustainable position for the automotive industry, companies need to increase awareness of the entire production cycle and its impact on carbon emissions.
‘The batteries value chain plays a strategic role in meeting our ambitions in terms of clean mobility and energy storage,’ said Thierry Breton, commissioner for internal market. ‘By establishing a complete, decarbonised and digital battery value chain in Europe, we can give our industry a competitive edge, create much-needed jobs and reduce our unwanted dependencies on third countries – in short, make us more resilient. This new IPCEI proves that the European Battery Alliance, an important part of the EU industrial policy toolbox, is delivering, he added.’
Companies involved in EU battery value chain IPCEI
Source: European Commission
The project will involve 42 direct participants, including small and medium-sized enterprises (SMEs) and start-ups with activities in one or more member states. The direct participants will closely cooperate through nearly 300 envisaged collaborations, and with over 150 external partners, such as universities, research organisations and SMEs across Europe.
Which automotive technologies stole the spotlight at CES 2021? Autovista Group’s chief economist Dr Christof Engelskirchen, Daily Brief editor Phil Curry, and journalist Tom Geggus review some of the big tech trends at this year’s show.
They discuss the unveiling of new electric models, batteries and bases. How futuristic concepts like autonomous vehicles and VTOLs are taking off, the growth of infotainment systems and how this year’s digital platform changed CES.
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.
Show notes
Five-minute-charge battery the answer to range anxiety?
CES 2021: The big automotive trends
CES 2021: Sono Motors unveils second-generation solar car
CES 2021: Panasonic looks ahead with augmented-reality HUD
CES 2021: Bosch focuses on sustainability and convergence
CES 2021: BMW showcases the latest iDrive system
CES 2021: Mercedes-Benz talks MBUX Hyperscreen
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Volkswagen Group (VW) narrowly missed its EU CO2 fleet targets for 2020. The manufacturing group fell short, albeit by only 0.5 g/km, even after entering pools with other manufacturers like SAIC Motors bringing the average down to 99.3 /km. This will mean a fine for the company, for which it set aside provisions earlier on. VW did manage to lower its new passenger-car fleet emissions to 99.8g/km, a reduction of roughly 20% compared to 2019.
The German manufacturing giant points to two of its major brands, Audi and Volkswagen Passenger Cars (VWPC), as driving down fleet emissions with their respective electric offensives. Notably, the luxury brands Bentley and Lamborghini were measured individually, and so were not included in the overall fleet total.
‘We are making good progress on the road to becoming a CO2-neutral company. We significantly reduced the CO2 emissions of our new vehicle fleet in the EU,’ said Herbert Diess, VW CEO. ‘The Volkswagen and Audi brands in particular have made a major contribution to achieving this with their e-offensive. We narrowly missed the fleet target for 2020, thwarted by the COVID-19 pandemic. Along with Volkswagen Passenger Cars and Audi, Cupra and Škoda are now bringing out further attractive electric models. This will allow us to achieve our fleet target this year.’
Electric offensives
Both Audi and VWPC were able to meet their CO2 fleet targets, thanks in a large part to their electric offensives with the ID.3 and e-Tron respectively. Based on the Modular Electric Drive (MEB) platform, the ID.3 saw 56,500 deliveries last year. Roughly 212,000 electric VWPC vehicles were handed over to customers during the last 12 months, including some 134,000 battery-electric vehicles (BEVs). Meanwhile, the Audi e-Tron (including Sportback models) recorded a significant increase in demand in 2020, with year-on-year growth of 79.5%, up to 47,300 vehicles.
So, as BEV front-runners, Audi and VWPC represented increased traction for the group, which saw a fourfold increase in deliveries of electric models in the Europe, including the UK, Norway and Iceland. A total of 315,400 electrically-chargeable vehicles (EVs) were delivered in 2020, compared to 72,600 in the previous period. BEVs and plug-in hybrids (PHEVs) accounted for 9.7% of VW’s deliveries last year, up from 1.7% in 2019. The group therefore asserts this makes it ‘the clear market leader in the all-electric segment in Western Europe,’ given that it claimed a quarter of the market, up from a 14% share in 2019.
‘Despite very ambitious efforts in electrification, it has not been possible to meet the set fleet target in full. But Volkswagen is clearly well on its way,’ said Rebecca Harms, member of the independent VW Sustainability Council. ‘Work has to continue systematically to bring about the drive transformation and meet climate and sustainability targets. The key to success will be to give a greater role to smaller, efficient and affordable models in the electrification rollout.’
VW will step up its electric offensive this year with a large number of new BEVs based on the MEB platform. Audi will start 2021 with the Q4 e-Tron2 and Q4 e-Tron Sportback2. Meanwhile, Cupra will launch the el-Born2 and Škoda will deliver the Enyaq iV3. VWPC will launch its electric SUV, the ID.4, in a number of additional markets and present a new all-electric model.
With the development of electrically-chargeable vehicles (EVs) driving forward at a pace, range anxiety will soon be a thing of the past. However, this could be replaced with charging anxiety, where consumers fear the infrastructure’s availability, the time it takes and the ease of use.
Therefore, developing EV charging is of equal importance to the market, in order to make consumers comfortable with the new technology. There is likely to be a push to create more efficient and easy-to-use charging posts that will benefit drivers and operators of charging sites.
Siemens is one company pushing development to meet these needs. The company has announced a new public fast-charger, named the Sicharge D, which is suited for highway and urban locations where drivers require a quick battery top-up, such as shopping centres and parking locations.
The post is capable of charging at up to 1,000 volts, with scalable charging power of up to 300kW and a peak efficiency range of 96%. This figure is helped by a dynamic power-sharing feature, which accounts for each connected car’s power demand and automatically adapts the charging process to the EV’s battery technology and charging status. This ensures that the connected cars get the maximum power they need without any additional manual intervention.
Future proofing
The 96% efficiency rate means almost all the power picked up by the point from the grid is transferred to the vehicle, reducing wastage and helping to keep operating costs down for the operator.
Siemens is also aware of the need for charging points to adapt as charging capacities of EVs continue to improve in a developing market. This may mean that compared to today’s models, vehicles in the future could accept higher charging power and demand higher voltage ranges, especially if the battery is able to be recharged in a shorter space of time.
This demand is met through the scalable-charging power up to 300kW, either from the start of installation or through plug-and-play upgrades. Furthermore, the charger already supports voltages between 150 and 1,000 volts and currents of up to 1,000 amps across all DC outlets. This means it can cater for full-power loads for future 800 volt vehicles, as well as the lower-voltage charging rates demanded by current EVs.
‘With its upgradability and dynamic charging, it is a big step forward to support the future of electromobility. Our customers can be sure to be prepared for future eventualities of electromobility, be it an increasing number of required charging options or increasing charging speeds,’ said Birgit Dargel, global head of future grids at Siemens Smart Infrastructure. ‘At the same time, it is one of the most efficient fast chargers currently available on the market – an important aspect since building sustainable mobility requires careful handling of the scarce resources we are using.’
Reducing anxiety
The Sicharge D is an example of how technology companies are working to meet the demand for charging infrastructure through new efficient and future-proofed, fast-charging points. By making the post more cost-effective for the operator, more points can be added in a single location. Adding the ability to scale up the point to cover future technologies will also reduce the need to replace them down the line, while also ensuring drivers are able to rely upon them whatever their vehicle type.
Other companies are also likely to develop charging points that offer efficient charging and a user-friendly experience.
Battery developer StoreDot has unveiled its first five-minute-charge battery engineering samples. Working on extreme fast-charging (XFC) technology, the Israeli company is aiming to eliminate range and charging anxiety for electrically-chargeable vehicles (EVs.)
Currently, rapid DC chargers offer some of the quickest charging speeds with a compatible vehicle. An example of this is Lucid Motor’s upcoming Lucid Air, which is reportedly capable of charging rates of up to 20 miles per minute when connected to a DC fast-charging network. Although, with a price tag of $80,000 (roughly €66,000) this luxury sedan’s battery technology cannot be considered widely accessible. If five-minute-charging technology could be introduced into the mass-market, this could remove several significant barriers to wider EV adoption; range anxiety, charge anxiety and wallet anxiety.
Ultra-fast charging
StoreDot is using this first production batch of sample cells to highlight the technology to potential industry partners. It will show OEMs how it replaced graphite in the cell’s anode with metalloid nano-particles, representing a breakthrough in safety, battery cycle life and swelling. In 2019, it demonstrated the full charge of a two-wheeled EV in just five minutes, as can be seen in the video below.
Developed by Chinese company EVE Energy, StoreDot’s strategic partner, the sample cells do not require significant capital expenditure in bespoke manufacturing equipment. The XFC units are designed to be produced on existing lithium-ion production lines at EVE Energy. The samples are also compliant with UN 38.3, which ensures safety while shipping.
Doron Myersdorf, CEO of StoreDot, said the company is getting one step closer to making its vision of five-minute-charging times a commercial reality. ‘Our team of top scientists has overcome inherent challenges of XFC such as safety, cycle life and swelling by harnessing innovative materials and cell design. Today’s announcement marks an important milestone, moving XFC for the first time beyond innovation in the lab to a commercially-viable product that is scalable for mass production.’
With this, he looks to pave the way for the launch of a second-generation, silicon-dominant anode prototype for EVs later this year. Myersdorf explained; ‘we founded StoreDot to achieve what many said could never be done – develop batteries capable of delivering a full charge in just five minutes. We have shown that this level of XFC charging is possible – first in 2019 with an electric scooter and again six months ago with a commercial drone. We are proud to make these samples available, but today’s milestone is just the beginning. We’re on the cusp of achieving a revolution in the EV-charging experience that will remove the critical barrier to mass adoption of EVs.’
A charge a week
Technological developments like these work alongside the introduction of new EV models into the marketplace, demonstrating to consumers how committed OEMs are to electromobility. This appears to be working as a recent survey carried out by Tusker found that 63% of drivers are considering an EV for their next car. In November last year, the company-car supplier approached over 1,750 employed adults in the UK and found environmental benefits, home-charging and tax benefits all went a long way to swaying respondents.
Of those drivers who said they would consider an EV, 36% believed they could name up to three or more local charging locations they could use. The survey also revealed that 79% of the respondents admitted to driving less than 150 miles a week. The company claims this ‘means models like the Tesla Model 3 (263 miles – 423 kilometres), the Audi e-Tron (220 miles) and even the new Vauxhall Corsa-e (200 miles) will cater for a week of driver journeys on a single charge.’
Three-quarters of respondents believed EVs were within their budget, while the remaining quarter felt they were just for the wealthy. However, the company did point out that these vehicles are affordable on its salary-sacrifice scheme, ranging from £399 per month (€450) for a Tesla Model 3 to £249 per month for a Corse-e (inclusive of maintenance and insurance on a four-year agreement).
As consumers consider the benefits of alternative-ownership methods, alongside the practicality of owning and charging an EV, there is little doubt that advancements like a five-minute-charging time would go far to convince more people that electromobility is a viable option.
There were plenty of automotive products and systems taking centre stage at CES 2021, which took place entirely online. Autovista Group Daily Brief editor Phil Curry and journalist Tom Geggus discuss developments from the show across the themes of electromobility, autonomous technology, infotainment and personalisation.
To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel.
Ford has used the Mustang name to widen the appeal of the new Mach-E electric SUV. The model incorporates some Mustang design elements, such as the light signatures, and there is not a Ford badge anywhere on the car, just the Mustang logo. The car is quite attractive by SUV standards, and the roofline is disguised using the body colour instead of black, giving it more of a coupé profile. There are many quirky touches, such as replacing the door handles with a digital button on the B-pillar that activates when the key is detected.
The Mach-E has a spacious, modern interior with an upright 16-inch touchscreen and a 10-inch digital screen in front of the driver, which helps keep the eyes on the road. Standard equipment is comprehensive and the large boot is supplemented with storage space in the front for the charging cable, for example. The model is nice to drive and handles well due to its convincing chassis, the ‘one-pedal’ driving mode is well calibrated, and the engine braking is very efficient. The claimed range is very good, especially for the extended-range rear-wheel-drive version, which manages 610km under the WLTP test cycle.
The Mustang Mach-E is not a cheap car, priced similarly to the Tesla Model 3, but has interesting positioning. It is larger and more powerful than offerings from volume manufacturers, such as the VW ID.4 and Skoda Enyaq, but at a higher price point, and is less expensive than similarly powered and sized premium models like the Jaguar I-Pace, Audi e-Tron and Mercedes-Benz EQC.
Click here or on the image below to read Autovista Group’s benchmarking of the Ford Mustang Mach-E in France, Germany, and the UK. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.
Senior data journalist Neil King explains Autovista Group’s key predictions for the year ahead, focusing on used-car demand and residual values in this second part.
Europe’s big five markets all suffered double-digit declines in new-car registrations in 2020, but used-car transactions exhibited more resilience. The exception is Italy, which suffered the same year-on-year in used-car transactions in Italy as new-car registrations, 27.9%, according to industry association ANFIA.
In contrast to the dramatic 29% decline in new-car registrations, used-car transactions in Spain declined by 12.8% in 2020, to 1,963,053 transactions, according to GANVAM, the Spanish dealers’ association.
‚The used-car market in Spain is always more favoured than the new-car market in times of crisis. Sales fell by only 13% in 2020, and the age structure of these sales has changed substantially in recent months and will continue to do so throughout 2021. The most notable change is undoubtedly the lower prevalence of young used cars in the market, caused by the standstill in tourism and the lack of renewal of rental fleets. In 2021, we also expect a greater share of electric vehicles in the used-car market, which accounted for just 0.2% of total sales in 2020,’ explained Azofra.
In the UK, used-car sales data are not yet available for full-year 2020, but the country’s used-car market contracted by 17.5% year-on-year in the first three quarters. Autovista Group estimates that used-car transactions were 15% lower in the year as a whole. This is only about half the contraction suffered by the new-car market. Used-car transactions are naturally expected to improve in 2021, but with a lower growth rate than new-car registrations.
Used-car transactions in France declined by a modest 3.8% in 2020, compared to a 25.5% fall in the new-car market, according to industry association CCFA. ‘The demand for diesel cars on the used-car market is still high while the supply is lower and lower, but petrol sales, which account for about 40% of total used-car sales, reached a maximum in 2020,’ explained Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux. Limited growth, if any, is therefore expected in 2021.
Slight improvement for Germany
Even in Germany, where the used-car market declined by only 2.4% in 2020, according to the KBA. Schwacke expects a slight improvement in used-car sales compared to 2020. ‘The used-car business was quite successful over the past 12 months under the circumstances and sold slightly more than seven million cars by the end of the year. The forecast for 2021 is the same – around seven million cars,’ commented Andreas Geilenbrügge, head of valuations and insights at Schwacke.
Europe: new-car registrations and used-car transactions, year-on-year % change, 2020
Source: CCFA, KBA, ANFIA, GANVAM, SMMT
(Note: UK is estimated, based on the latest data)
RVs grow in 2020, face limited pressure in 2021
Autovista Group’s COVID-19 tracker shows that the index of residual values (RVs) finished 2020 at or above pre-crisis levels in all of Europe’s major markets. The measurements began in February, with an index value of 100.
Source: Autovista Group, Residual Value Intelligence, COVID-19 tracker
Residual values have peaked, however, and have declined in recent weeks. Looking to 2021, ongoing COVID-19 restrictions and the economic impact, as well as the aversion to public transport, will support used-car demand. Autovista Group therefore predicts that residual values will only come under limited pressure.
Spain: difficult year
The tax rise in Spain, with the introduction of WLTP-based emissions figures, and the end to the RENOVE scrappage scheme will hinder new-car demand and means RVs may increase slightly in value terms in Spain, but a 1.1% decline is forecast in terms of trade percentage, i.e. value retention, in the standard 36-month/60,000km scenario.
‘We foresee a difficult year for the sector, especially in terms of new-car sales. However, used-car sales will resist the onslaught of the crisis better and only their average residual values will be slightly affected.’ Azofra emphasised.
‘Electric vehicles will experience greater pressure on their transaction prices in the used-car market. On the one hand, their price is still very high, which is an important market barrier, even more so in crisis circumstances such as the present. On the other hand, demand is trying to be stimulated through incentive schemes, so it will be difficult to maintain their used-car price. In addition, the recharging infrastructure is still insufficient, the poorest in the big five European countries, which reduces their development space in the used-car market. With regard to the rest of the engines, we estimate small negative adjustments in petrol and diesel vehicles and greater stability for hybrid engines, which are in increasing demand.’
The end to Brexit uncertainty could serve as a positive for the UK’s new-car market, but deliveries may be affected and price rises are expected as the share of components in some engines will invariably exceed the ‘locally-sourced’ threshold. It is an incredibly difficult call but Glass’s, the UK arm of Autovista Group, forecasts a 1.4% decline in the RVs, in trade percentage terms.
Schwacke points out that fleet registrations from 2017/2018 declined somewhat in Germany and there were also almost 400,000 tactical registrations less from 2020, of which usually two thirds are sold to end customers as young used vehicles in the year after first registration.
Stable demand
‘In view of the expected stable demand, this is definitely a plus point for price development in the coming year, but supply volume will probably struggle,’ said Geilenbrügge. The return to a 19% VAT rate on new cars will also affect RVs, but a modest decline of 0.7%, in trade percentage terms, is forecast for used cars in the 36-month/60,000km scenario.
The tax changes in France, which penalise petrol cars more than diesels, and incentives for EVs present a mixed picture. ‘In 2021, there is a clear risk of having a new-car market in contradiction with the used-car market. For CO2 reasons, the fuel types that are driving the new-car market are not the most attractive ones on the used-car market. Lower supply will reduce the RV pressure on petrol cars, and the sales stop of powerful diesel engines, which are well demanded on the used-car market will especially support RVs of these specific vehicles. The high prices and bonus for EVs still impacts RVs, especially at 12 months, but the €1,000€ bonus reduction in July 2021 will support RVs more positively,’ explained Taitz. Overall, the latest RV outlook for France calls for a minimal drop of 0.4% in the prices, in trade percentage terms, of used cars.
The poorest RV outlook is in Italy, where used cars have not weathered the COVID-19 storm better than new cars and the introduction of additional incentives for new cars will apply more pressure on used-car demand and residual values. RVs of used cars in the 36-month/60,000km scenario are currently forecast to fall by 3.9% in trade percentage terms.
In a first part, King discussed Autovista Group’s predictions for new-car registrations in Europe’s major markets in 2021.
Europe’s big five markets all suffered double-digit declines in new-car registrations in 2020 and the magnitude of the recovery in 2021 fundamentally depends on the duration and severity of restrictions to tackle COVID-19 and the accompanying economic impact. Automotive-specific factors will also determine the extent to which markets bounce back in 2021. Senior data journalist Neil King explains Autovista Group’s key predictions for the year ahead, focusing on new-car registrations in this first part.
Despite the new-car market stability in December, Spain still contracted more than the other major European markets in 2020. This does not automatically mean it will enjoy the highest level of growth in 2021. The end of the RENOVE scrappage scheme on 31 December 2020 and higher, WLTP-based registration taxes from 1 January 2021 pulled demand forward into 2020. Furthermore, with no improvement in Spain’s crucial tourism sector, and therefore the wider economy, envisaged in the near future, new-car registrations in Spain are expected to recover at a slower rate than in the leading European markets, except Germany.
‘A very tough first half of the year is expected, and a start to the recovery in the second half of the year. In any case, the recovery will be slow, and we do not expect new-car volumes to reach figures similar to those of 2019 for at least three years,’ commented Ana Azofra, valuations and insights manager at Autovista Group in Spain.
The recovery in Germany is forecast to be rather limited, not only because it starts from the highest base, declining by only 19% in 2020, but also as new-car demand will be slightly hampered by the return to a VAT rate of 19%, up from the reduced rate of 16% that was in effect from 1 July to 3 December 2020. The smaller quantities of newly launched high-volume vehicles in 2021, and the reduction in the range of products due to the threat of CO2 fines, will also have an impact. However, regained production capacity, as well as the significantly lower availability of very young used cars, should act as positive effects. Autovista Group’s Schwacke is cautiously optimistic for 2021 and forecasts a recovery to just under 3.1 million units, equating to growth of 6%.
New-car registrations, major European markets, year-on-year % change, 2020
Source: CCFA, KBA, ANFIA, ANFAC, SMMT
Post-Brexit Britain, incentivised Italy
The declines in new-car registrations in Italy and the UK in 2020, were 27.9% and 29.4% respectively. However, new-purchase incentives introduced in Italy and the end to Brexit uncertainty in the UK, which compounded the effects of COVID-19, will provide a positive impetus to demand in 2021.
Autovista Group’s latest base-case forecast predicts a 25% improvement in UK new-car registrations in 2021, to just over two million units. However, this is predicated upon vehicle deliveries being largely unimpaired by post-Brexit disruption after any short-term teething problems, and the car market being able to recover from the current lockdown, together with any further restrictions that may be imposed later in the year.
‘Import delays at the port of entry will reduce UK registrations in Q1 and Q2 2021 and manufacturers are still not producing cars at full capacity due to COVID-19. The UK is also in lockdown but click-and-collect will help some car registrations, with the November 2020 volumes highlighting the need retail customers still have to kick tyres,’ said Anthony Machin, head of content and product at Glass’s.
The recovery is not expected to be as pronounced in Italy, but the new incentives will certainly help to drive the recovery.
Fuelling France
The French new-car market contracted slightly less than Italy and the UK in 2020, by 25.5%. In addition to the COVID-19 effect, the market was impacted by tax changes that were introduced in March 2020 and especially penalise petrol cars. These negative influences should dissipate during 2021 but the reduction in incentives for electrically-chargeable vehicles (EV) and the threshold for the environmental ‘malus’ (penalty), along with a higher penalty ceiling, will suppress demand.
‘Despite a more favourable malus scheme for diesel cars on the new-car market, I do not expect a diesel sales increase in 2021 and I expect lower petrol sales. However, OEMs are pushing battery-electric vehicles (BEVs) on the new-car market for CO2 reasons and the number of plug-in hybrids (PHEVs) increased a lot in 2020, a rise that will continue in 2021. Hybrids also offer a real alternative to petrol cars as they are cheaper than PHEVs, the electricity usage is simpler and, in terms of taxation, they offer the same benefits,’ explained Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux.
In a follow-up article, King will discuss Autovista Group’s predictions for used-car demand and residual values in Europe’s major markets 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
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.
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