European Market for Electric Passenger Vehicles

In the second quarter of 2022, the regional market for battery electric vehicles (BEVs) experienced a slight dip, with total volumes falling by 1.3% while the overall new car market rose by 2.8%. The BEV market's share decreased to 12.3%, a 0.5ppts drop compared to the previous quarter.

Despite this decline, the industry is anticipating a 14% BEV mix by the end of the year. Tesla's expected strong performance in Q3 is expected to play a significant role in achieving this target.

The W-European BEV market's share held by EVBoosters decreased to 8% in Q2, marking a slight retreat from the previous quarter. Meanwhile, Tesla, despite facing potential challenges in Germany, managed to deliver every fourth car sold in Austria during the past quarter from its German facility.

VW Group, following a management change, expressed more confidence about semiconductor issues, a concern that has been plaguing the industry. However, Mercedes-Benz Group identified semiconductors as the main operational issue going forward, along with a list of other macroeconomic potential headwinds.

The semiconductor crisis also affected European manufacturers, causing production stoppages at plants such as BMW's i4 plant in Munich and VW's Zwickau BEV facility.

In a positive development, the Fiat 500e model from Stellantis finished as the region's number one BEV model in Q2. Stellantis brands accumulated twice as many BEV registrations (60,560) as Tesla (25,140) in Q2.

The German government has agreed to phase out purchase subsidies for non-private use vehicles by September 2023. Retaining the benefit in kind reduced tax rates should help maintain stimulation for plug-ins.

Despite the challenges, VW's regional BEV order backlog increased to 0.35 million units following the Q2 analyst call. VW's German division, however, has a below-average BEV mix of 10.5% in the first half of the year, while the market accounted for 12.5% by BEVs.

If the market recovers in the second half of the year, BEV volumes will need to increase to offset CO2 emissions and meet CO2 compliance levels. The total market BEV mix is forecast to reach 14% by the end of this year, currently hovering at a 12-month rolling rate of 13.7%.

Despite the challenges, the European electric vehicle market continues to show resilience and growth potential, with manufacturers and governments working together to overcome the obstacles and drive the transition to a more sustainable future.