2024 is set to see the West European new pure electric (BEV) passenger car market fall within a stagnant new car penetration mix corridor of between 15-17% for the third consecutive year (see forecast on page 6).
While the market is beginning to resemble an autonomous vehicle struggling to deal with road signals and simply resigning itself to the side of the road with emergency lights flashing, this is likely to be the final year of stagnation.
By the time 2024 comes to an end, BEVs will finish the year soaking up between 0.2 and 0.3 ppts less market share over the previous year's level (2023 16.9%) translating to 1.93 million total units (2023: 1.96 mn).
However, this was not entirely unexpected and shouldn't necessarily be used as a representative case of market health.
After all, this study factored in a flat 2024, into its first editions published half a decade ago.
Why?
Taking the macroeconomic turmoil and turbulent geopolitical headwinds out of the equation (which couldn't have been predicted), highlighting the ever-increasing geopolitical exposure of new – and primarily electric – cars, manufacturers were always likely to delay new BEV product launches until 2025, something that took place in 2019 – the year prior to the last reduction in CO2 fleet emission regulatory targets.
Key smaller and semi-affordable protagonists, such as Renault's R5, the Dacia Spring refresh and Stellantis's Citroën ëC3 will begin entering the stage – not coincidentally – during 2025 (apart from a trickle of deliveries in domestic France this year to satisfy social-leasing orders made earlier this year). Why? To contribute to achieving tougher EU CO2 emissions regulations.
Benchmark fleet CO2 targets see a 15% reduction to a weight- based average of 93.6g/km between 2025 and 2029.
Despite the fall appearing unachievable at first glance for some manufacturers, with Ford notably calling for alterations as it struggles to shift MEB-based Explorer and Capri models made at its Cologne site, other OEMs such as BMW Group and Stellantis – under the previous leadership of Tavares – said those targets won't pose an issue, thanks to the high level of plug-in models (with premiums best able to price in the higher-costs) in their mix and small and lighter models respectively.
However, Stellantis's sudden lurch back to joining Europe's automotive industry lobby group, ACEA, days following Mr Tavares's stage exit, would suggest the second largest passenger car OEM operating in Western Europe, may also be about to call for a dilution of targets.
However, a number of OEMs, such as Tesla, Volvo Cars, and Polestar, that are overachieving emission targets and are set to benefit significantly from regulatory credits from 2025 are less likely to want to see targets adjusted, with one OEM confirming that to us directly.
A spokesperson for the manufacturer told us that they are looking to integrate that revenue stream from credits more intensely from 2025 as manufacturers continue to struggle with lower-margin BEV products and high investment costs with the supplement of regulatory credits acting as a bridge to stronger profitability.
Volvo and Polestar are already set to benefit during 2024, thanks to an EU open pool agreement with Suzuki.
One assumes the same will happen in the UK. The Japanese company are currently without a BEV model in their line-up but will see an Indian-made BEV model arrive in 2025...
Continues for clients
All of our reports, which feature exclusively researched data, can be purchased here. ◼︎︎
*Western Europe 18 Markets: EU Member States prior to the 2004 enlargement plus EFTA markets Norway, Switzerland, Iceland, plus UK
Comments