The automotive industry is rapidly evolving in terms of technology as well as tackling environmental issues. Electric vehicles have been introduced as a clean energy initiative, as they have low or zero emissions and have come a long way to become an integral part of OEMs’ business strategies. Automakers such as PSA and Volkswagen are creating separate EV business units to be prepared for the expected EV boom in the future.
Asia has been dominating the market up until recently but things have changed in 2020. Europe has emerged as the clear leader as of September 2020 with the continent registering sales of about 800,000 units. Due to the COVID-19 crisis, China registered only 700,000 units compared to around 1,115,000 units in September 2019.
Although Europe had also gone into a temporary lockdown in Q2 2020, to curb the effect, governments have announced stimulus packages that include generous EV subsidies and incentives (doubled in few countries) that have resulted in almost doubling of sales compared to January to September 2019.
Countries across Europe have similar approaches with various types of EV purchase incentives, EV taxation policies, EV infrastructure incentives, and urban access regulations. By far, EV purchase incentives such as cash rebates and scrappage incentives have impacted the most on EV sales as is evident in Germany and France where sales have grown more than 140% and 160%, respectively, from January to September 2020 compared to the same period in 2019.
Favorable EV taxation policies (e.g., exemption from registration and ownership tax on the purchase of EVs) have also led to an increase in demand in Italy and Norway. The creation of low and ultra-low emission zones have also pushed consumers into buying plug-in electric vehicles, especially in the UK, where driving petrol (below Euro 4) or diesel (before Euro 6) vehicle can attract a fine of £12.50 per day in certain low emission zones (LEZs).