The EV Revolution and the Coronavirus pandemic

First, it was some kind of flu in China.

Then, the Coronavirus quickly spreaded across the World, being recognized by a pandemic by the World Health Organization (WHO), on March, 11th.

Country after country, lockdown measures started to be enforced, with travel restrictions, school closures, among many others.

Besides the occasional panic buying (what's with the toilet paper rush?!?!), the most important changes to the daily life is that we stopped moving around, many of us started working from home, only to discover that things get done just the same, business trips were cancelled, most of them being replaced by Skype/Zoom/whatever video calls, commutes and public transportation have a third or less traffic, but on the other hand, many people are being laid off, or just simply fired, because their services are allegedly no longer needed.

The Coronavírus is a two act tragedy, on the first we have the health pandemic, but just like a tsunami follows an earthquake, the upcoming economic crisis will be the second act of this life-changing event, said to be most expressive since WW II.

So, how will the EV Revolution be affected by these dramatic events?

In stable times, changes happen progressively, while in disruptive times, like the ones we live, changes can be dramatic and unexpected.

There have been concerns that this could stall transport electrification, and while the recent record results should become the exception, what the recent China (the canary in the coal mine) results say, is that while EV sales could drop, the fall won't be as dramatic as in regular ICE units, and even within electrified vehicles, there should be differences, while HEVs and PHEVs will suffer more than BEVs, because many PHEVs are bought because of fiscal benefits, the fall won't be as sharp as with HEVs, that have their selling point (better fuel efficiency) affected by the recent drop in oil prices.

Making a purely hipothetical exercise, one can say that if ICE sales drop by 80%, HEVs will drop by 60%, PHEVs 40%, and BEVs 20%.

This change will only exacerbate the most recent trends, where the overall markets are down significantly, while plugins are up, in some cases with three-digit growth rates.

This will lead to dramatic share gains by plugins, and particularly BEVs, as we can see already in France this month, and dismal sales for OEMs that are behind the curve, when it comes to electrification.

These will have to scramble for a way out, be it a merger, a government intervention, or other source of fresh money, while the OEMs that have their EV plans more advanced, will be encouraged to cut on their ICE business, while keeping their EV segment like if their were the family jewels.

And EVs are indeed their family jewels, is previously Legacy OEMs usually sold every EV they could make, while at the same time, had to discount (in some cases, heavily discounting) their pure petrol of diesel units, now imagine in a scenario of falling demand, plugins will continue to have demand, even if they have to discount some veteran BEV models or PHEVs, but regular ICE models will be dead ducks in the showrooms.

So in a context of falling sales where would you cut costs?

And that is already visible on the EU CO2 average issue, while some OEMs are already pledging for a postponement of the fines, because they know they won't be able to:

a) Comply with the targeted averages;

b) Pay the respective fines.

Other OEM CEO’s (like the Volkswagen Group) are surely receiving by now reports with what i have said before, that is why, all of the sudden, they are not concerned with the EU CO2 averages (another reason can be that they have more things to be worried about, like not going bankrupt this year...but i digress), because their share of plugin sales in the overall sales is ballooning in March, and should continue like that in the coming months, so it won’t be much a stretch for many of them to reach the proposed targets.

So aside from some consolidation buyouts, or local government interventions, i wouldn't expect a massive delay in transport electrification.

Chinese OEMs can even profit from the current disruption, while others are shutting down their factories across the World, they are starting to re-open theirs in China, so they will have a few months of advance regarding the competition when it comes to operate in "the new normal", benefitting also by the fact that the supplier network is mostly local and not dependent from global supply chains, and the highly competitive environment that the Chinese EV market has, of which the large number of EV startups is just a sign.

So, looking purely at market forces, the EV Revolution might suffer a hiccup in the next few months, but after that, the growth will be back in a big way, with market share gains being even more impressive than volume ones.

This doesn't mean the EV Revolution is unstoppable, the dark clouds that could delay it come not from the automotive market forces, but from what this crisis can do to global politics.

Because disruption will happen in most, if not all, aspects of life, politics are also being changed forever, current governments are being tested by the Coronavírus pandemic and many will be defeated in coming elections, for poor their planning, execution, handling of the crisis, etc.

And what will replace them? 

Once again, in stable times, changes happen progressively, while in disruptive times, like the ones we live, changes can be dramatic and unexpected.

What were the political trends in the last years of the BC (Before Corona) era? On one hand, you had populist forces that weren't as (or at all) EV-friendly as mainstream politicians, while on the other, there were eco-movements winning popularity, particularly on the younger segment of the population (a big part of them aren't even elligible to vote), demanding for significant (and fast) changes to face the Climate Emergency, one of them being massive EV-adoption, particularly of public transportation.

These trends will be magnified by the current disruption, with mainstream politicians likely losing significant ground, and if the populist forces win, the EV Revolution will face headwinds that will likely delay for years transport electrification.

On the other hand, if the eco-movements win, the EV Revolution will happen in lightening speed, anticipating in several years the full electrification of transport, through demanding ICE bans.

Who will win with the current disruption? It is up to the people to decide, therefore it is up to us to decide who we want to represent us in the political arena and decide the pace of the EV Revolution.

Slovenia February 2020

VW e-Golf leads red hot market

The Slovenian PEV market is finally on the move, with sales tripling in 2020 (2,5% PEV share), with February representing the second record month in a row, with 171 registrations (3,1% share), helped by a regressing (-9%) overall market. 

The most impressive thing about these performances is that it's all thanks to BEVs, that now represent an amazing 96% of plugin sales...Has disruption reached Slovenia? 

Back at last month performance, looking at the best selling models, the veteran VW e-Golf is the surprise leader, with the German hatchback taking full profit from the current fire sale (as in, deep discounts), to score 86 units in one month, this model's best score in this market.

The relegated leader Renault Zoe couldn't complain much either, as it also scored a record 36 units, allowing both models to win a relevant advance over the competition.

A reference also for the 3rd placed VW e-Up, that thanks to refresh (and price cut), has jumped to the podium, making a 1-3 standing for Volkswagen.

One model that is being left behind of this sudden sales bonanza is the previous chronical Best Seller in Slovenia, with the BMW i3 showing up only in #5.

Is the German hot hatch losing charge?

BMW is also losing grip on the Manufacturers ranking, after winning the Best Seller trophy 4 years in a row, now it is only 4th, with 5% share, tied with Hyundai, while on the podium, we have Smart in 3rd, with 8% share, with Renault (21%) in the runner-up spot, while Volkswagen came out of obscurity into the leadership, with an amazing 44% share. 

Austria February 2020

Tesla Shines in Austria

The Austrian plug-in sales are up 67% this year, to some 2.700 new plugins, placing the PEV Share in record heights (6,7%, 4,6% for BEV alone). 

Interestingly, this market is known to be a BEV-friendly market, with all-electric cars usually representing 70% of plugin sales, but this year plugin hybrids are growing faster (+192%!), although BEVs (+38% YoY) are also experiencing a solid growth rate, which is allowing plugin hybrids to increase their share in the BEV/PHEV balance (62% BEV vs 48% PHEV). 

After a weak January, the Tesla Model 3 had its best off peak month so far, with 219 deliveries, allowing it to be the February Best Seller, with the sports sedan jumping to 2nd place last month, and with an expected 400-500 units peak in March, the Californian is sure to remove the Renault Zoe from the leadership, although the French hatchback could give some fight on this year Best Seller title, with last month performance (182 units), being its best score since 2017.

The PHEV title race looks promising, with the #3 Porsche Cayenne PHEV(!) leading, with 130 units, but with the #4 BMW X5 PHEV and #6 Opel Grandland X PHEV less than 15 units behind, the Porsche will have a tough task ahead, in order to keep the category title.

Another fresh face in the table is the #10 Peugeot 3008 PHEV, confirming the popularity of the French crossover across Europe.

Outside the Top 10, a reference to last month's landing of the Opel Corsa EV, with 40 units, while the Bratislava triplets (Skoda Citigo EV - 49 units; Seat e-Mii - 15; VW e-Up! - 25) are being delivered in significant numbers, and counted together, they would total 89 units, making it the 3rd Best Selling EV in February, an impressive performance for a city EV.

In the manufacturers ranking, the race is pretty close, with Renault (13%), BMW (13%) and Tesla (12%) running for the leadership, leaving Porsche, Opel and Volkswagen, all with 6% share, far behind.

China February 2020

BYD Qin Pro: The maker's new sales champion?

Tesla Model 3 leads disrupted market

With the Chinese market suffering from the general lockdown due to the Coronavírus, sales took an expected beating, with only 15,000 passenger PEVs in February, the worst result in over 3 years, representing a 65% drop year on year.

Still, it could have been worse, especially considering the overall Chinese market was down by 82%(!) in February.

As a consequence of these events, the February PEV share grew to 6.6% (5.5% BEV), pulling the 2020 share to 3.7% (2.7% BEV), a step below from the 5.5% of 2019, but we hope that after all the doom and gloom, the second half of the year witnesses the return to growth in China (and maybe two-digit performances?).

One positive sign of the February numbers, was the return to a BEV-friendly market, with BEVs dropping only 57%, while PHEVs fell 81%, leading BEVs to have 84% of plugin sales in February, in line with the 86% of last December, and pulling its 2020 share to 73%, so the “Go BEV, or Go Home” mantra is back to this market.

Looking at February Best Sellers doesn’t give you much of an idea of where the market is going, as it has more to do with existing stock and the extension of time that the factories were closed, than demand-driven logic.

Still, here’s February Top 5 Best Selling models individual performance:

#1 – Tesla Model 3

The poster child for electric mobility delivered 2,284 units, (including 152 imports), winning its second monthly Best Sellers title in a row. And while it’s not (yet) the disruptive result that many expect from the Tesla sports sedan, let’s remember that this performance was strongly conditioned by the Coronavírus outbreak. With the worst of the crisis now a thing of the past in China, expect the production to ramp up quickly in the coming months, so the sporty silhouette of the Model 3 should become a common sighting in Chinese streets soon.

#2 – BYD Qin Pro EV

The maker’s reply to the GAC Aion S and BAIC EU-Series has made it to 2^nd place last month, earning BYD’s first podium position since last July, thanks to 1,477 units, but the BYD sedan will need to step up its game in order to stay among the Best Sellers, after all, not only the Aion S is cheaper AND has better specs (59 kWh battery and 510 NEDC electric range for the Aion, 53kWh and 421 kms for the Qin). The game has moved on, BYD…

 

#3 – GAC Aion S

Considering the circumstances, things continue to go well for the Aion S, with the sleek sedan securing another podium position, thanks to 1,433 units. Currently the most competitive domestic EV on the market, the GAC model is sure to continue a regular in the podium positions, once the market returns to its regular pace.

  

#4 – BAIC EU-Series

Last year’s Best Selling model in China, and only the second EV, after the Tesla Model 3, to register more than 100,000 units in one year, Beijing Auto’s EU-Series sedan is back among the top sellers, hoping to ramp up its new R600 (60 kWh battery, 460 kms NEDC electric range) version swiftly, in order to beat the GAC Aion S in the race for best-selling EV.

 

#5 – NIO ES6

After a long, hard, road, NIO is finally showing up among the Best Sellers, becoming also the first domestic EV startup to place one model in the monthly Top 5, thanks to 671 deliveries. Facing an uphill battle, after all, marrying “Premium” and “Chinese” in one EV-only brand is no easy task, the fact is that NIO products and concept are intriguing and add something new to the current EV landscape, not only they have battery swap stations, but they also increase regularly their models battery capacity, from the initial 74 kWh, back in 2018, to 80 kWh in 2019, and now in 2020, they have launched a 100 kWh option. Even better, the brand allows existing owners to upgrade their current batteries to the 100 kWh pack, for little over $5,000! The ES6 is the current best seller, but by mid-2020, the Model Y-like (and 100kWh battery-equipped) EC6 crossover is sure to become a big hit in the second half of the year, possibly becoming a regular face in this Top 5.

NIO EC6: A future Best Seller?

 

Looking at the 2020 ranking, there were some significant changes, like the climb of the GAC Aion S to the runner-up spot, while the BYD Qin Pro EV jumped three positions, to #5.

The local EV Startups are starting to get a hold on the market, not only the NIO ES6 was #5 in February, but the Weltmeister EX5 also had a good month, jumping 4 positions, to #13.

Besides the Qin Pro EV, BYD also saw its small Crossover Yuan EV climb positions, to #12, helping the Shenzhen maker to recover its leading position on the market.

Finally, we have two models returning to the Top 20, with the Chery eQ climbing to #18, while the Changan Eado EV is now #19.

Looking at the manufacturers ranking, the current disruption is being felt, with BYD (15%, up 1%) and SAIC (14%) running for the leadership, with Tesla (9%, up 2%) being the new Bronze medalist, having surpassed GAC (8%, down 1%).

More important than looking at the current numbers, is know what to expect in the next few months, right?

In March, more than 90% of the automotive factories are back in production, so while that month will still see a transition to regular activities, CPCA expects a 40% drop in March in the overall market, April and May should witness a return to normal…

Thing is, what will it be “normal”?

A return to the growth numbers of H1 2019? Or the slow sales of the second half?

One thing is certain, this crisis will probably lead to some behavioral changes, like a possible loss of faith in public transport, which could mean a reinforcement of private vehicle ownership, and/or changing buyer tastes.

In this last case, knowing that Chinese OEMs are faster to respond to changing environments, we could see a return to form from the surviving local OEMs, especially their startups, with several exciting new models (NIO EC6, XPeng P7, Byton M-Byte…) coming soon.

Germany February 2020

Record month

Following the start of the new CO2 EU rules, the German plugin market has (finally) clicked and February signaled another record performance, its second in a row(!), having registered 16,508 units in February, growing 144% YoY, with last month plugin share reaching a record 6.9%, pulling the yearly tally to 6.7%, helped by the 9% fall of the overall market.

Despite BEVs continuing to grow at a fast pace (+76% YoY), the lights are focused on PHEVs (+279%!!!), with several new models hitting the market, allowing plugin hybrids to continue outselling pure electrics, even if the difference is negligible (51% vs 49%).

Looking at the fuels mix, diesel continues to slide (32% in February), while unplugged hybrids are growing, now with 9% share, meaning that 15.7% of the German market is already electrified. Not bad, eh?

February had a surprise leader, with the VW e-Golf winning its first Monthly Best Seller title since last July, with Volkswagen milking its electric hatchback to the last drop, thanks to generous discounts, allowing it to hit 1,475 deliveries, its second record performance in a row(!), so it seems the veteran EV is set to end its career with a high note.

But the German maker didn't stopped there, with two other models in the Top 5, the small e-Up was 4th, with 679 units, its second performance in a row, while the Passat GTE ended the month in 5th, with 640 units.

So, 3 out of 5 for Volkswagen, with two consecutives records to boot. Not bad, VW, not bad, at all...

The remaining two spots went to the Renault Zoe (#2, with 1,352 units), and the indestructible Mitsubishi Outlander PHEV (#3, 821), with this last one continuing to impress by its vitality.

Pl	Model	Sales
1	VW e-Golf	1,475
2	Renault Zoe	1,352
3	Mit. Outlander PHEV	821
4	VW e-Up!	679
5	VW Passat GTE	640

Regarding the 2020 table, the two front runners are already winning a sizeable distance over the competition, and only the #12 Tesla Model 3 can aspire to get close to them, but for that to happens next month, it will need to pull a record result in March, that although not impossible, it has become more difficult due to the current Covid19 crisis.

With the VW e-Golf ending its career in a few months, and the expected general slowdown in the coming months, only the Renault Zoe can hope to give some fight to the VW ID.3, in the race for the 2020 title.

Well, if the production ramp up of the ID.3 is indeed happening, as the several car park pictures prove, actual ID.3 registrations are still in symbolic numbers, with only 81 deliveries last month.

Not that the Volkswagen Group needs it now to grow, besides the rise and rise of the VW e-Golf, the Passat GTE midsizer was up one position to #4, and the small e-Up climbed to #7, while on the Audi side, the e-Tron stepped one position to 6th, thanks to a record 591 units (second in a row), and the A3 PHEV jumped four positions, to #14, thanks to 466 registrations, its best performance since 2017.

Finally, Porsche's new baby, the Taycan, had 195 deliveries, a new high for the sports sedan, as the ramp up continues to evolve, we might see it soon in the Top 20.

But the Volkswagen Group didn't have the exclusive of good performances in his Top 20, with the Mercedes C300e/de jumping into the Top 10, in #9, while BMW 330e was up to #11 and the Tesla Model 3 rejoined the table, in #12, with the Californian set to jump into the Top 5 next month.

Outside the Top 20, there's plenty to talk about, like the BMW X3 PHEV (95 units) ramping up production, the new Kia Soul EV registering 229 units, a new high for the Korean MPV-disguised-as-crossover, while Volvo continues to increase its electrification rate, with its S/60 PHEV twins scoring a record 308 units, and the new XC40 compact SUV having 143 deliveries.

Mercedes has finally found a way to ramp up production of their new plugin models, with the compact A250e registering 112 units, the new midsize SUV GLC300e delivering 121 units, while its all-electric sibling, the EQC, has finally crossed into three-digit territory (Yay!!!), with 109 units. 

In the brands ranking, the Volkswagen Group has a 1-2 lead, with Volkswagen (16%, up 1%) leading the way, while Audi (11%) is in Second Place, closely followed by the #3 Renault (10%, down 1%) and BMW (10%), while the #5 Mercedes (9%, up 1%), is getting ready to run for for the medals positions.

Midsize Car Best Sellers

Pl	Model	Feb. Sales
1	VW Passat	5,282
2	BMW 3-Series	4,364
3	Audi A4	4,061
4	Mercedes C-Class	3,723
5	Skoda Superb	1,383

With the Tesla Model 3 in an off month, we have four models with a significant degree of electrification, with the leader VW Passat having 12% of its sales coming from the GTE version, while the #4 Mercedes C-Class has 17% of sales coming from its PHEV versions, and the #2 BMW 3-Series, 12% share. 

But the champion of electrification is the #5 Skoda Superb, with 20% share.

Which leaves the Audi A4 as the only unplugged model...Until when?

Midsize SUV Best Sellers

Pl	Model	Feb. Sales
1	Mercedes GLC	2,864
2	BMW X3	1,295
3	Audi Q5	1,319
4	Volvo XC60	1,418
5	Mitsubishi Outlander	1,024

We have a fully electrified Top 5, although these models have various degrees of electrification, from the 4% PHEV share of the Mercedes GLC, to the 80% of the Mitsubishi Outlander, passing by the 7% of the BMW X3, 13% of the Volvo XC60 and the 22% of the Audi Q5.

This last performance begs the question: When will Mitsubishi make the Outlander an entirely plugin model?

Anyway, 5 electrified models out of 5 is already something, and with the Merc GLC PHEV and BMW X3 in ramp up mode, things will look even better in a few months...

Full Size Car Best Sellers

Pl	Model	Feb. Sales
1	BMW 5-Series	2,551
2	Audi A6	2,377
3	Mercedes E-Class	2,242
4	Volvo S/V90	372
5	Mercedes S-Class	329

With the exception of the #2 Audi A6, all other models have PHEV versions, with the #3 Mercedes E-Class hitting a significant 24% share, while the #1 BMW 5-Series reached 10%, and the #4 Volvo S/V90 twins had 16%.

Finally, the flagship Mercedes S-Class had just 4% of its sales coming from its PHEV version, something that will surely change in the upcoming next generation.

Full Size SUV Best Sellers

Pl	Model	Feb. Sales
1	Mercedes GLE	1,004
2	VW Touareg	859
3	BMW X5	708
4	Audi e-Tron	591
5	Volvo XC90	550

The full size SUV had a slow month regarding electrification, with two unplugged models on top, the leader Mercedes GLE delivered just 4 units of its PHEV version (for some reason Mercedes Germany is not betting in the 350de version), while the (still) unplugged VW Touareg was the runner-up last month.

The #5 Volvo XC90 has grown its PHEV share to a significant 40%, while the BMW X5 PHEV represented 17% of the X5 sales, so added to the full EV Audi e-Tron represented the 3rd plugin model on this Top 5.

With the new VW Touareg PHEV coming soon, and (hopefully) the Mercedes GLE350de finally starting to be delivered in Germany, it will be a matter of time until this Top 5 becomes fully electrified.