Global Plug-in Sales for 2017-Q4 and the Full Year (prelim.)

With over 95% of December data collected, we can already make a preliminary analisys of the 2017 Global plug-in vehicle sales. There were around  1.2 million units being registered last year, 57 % higher than 2016. These include all global BEV and PHEV passenger cars sales, light trucks in USA/Canada and light commercial vehicle in Europe. In 2017, 66 % of sales were pure electric (BEV) and 34 % were plug-in hybrids (PHEV). All-electric vehicles have been winning share, as the BEV-friendly Chinese market continues to win importance.

Growth rates were influenced by the booming Chinese NEV market, with the USA and Europe following it, albeit with some distance. In Japan, the Toyota Prius Prime PHEV was an instant best-seller and, together with the Q4 launch of the new Nissan Leaf, plug-in sales went up by 149 %. Globally, December was another sales record, with over 170 000 units delivered worldwide, another 17 % higher than the previous all-time-high in November. In December the global plug-in share touched the 2 % mark for the first time, following consistently strong increases during the last 5 months of the year. The global share for the complete year of 2017 stands at nearly 1,3 %.

For 2018 we expect a sales increase to 1,9 million units, boosted by strong EV adoption in China and mass production of the long awaited Tesla Model-3. By the end of 2018 we expect over 5 million plug-in cars and light trucks to be in use, worldwide.

first Global Plug-in Sales for 2017-Q4 and the Full Year (prelim.) image

China storms further ahead

China remains the unchallenged #1 market for plug-in vehicles, or “New Energy Vehicles” as China calls them: It has increased sales by 72 % YoY, adding over 250 000 units to last year result of 351 000 units, representing roughly half of the global plug-in sales. Japan and South Korea (+130%) contributed further to the momentum in the Asia-Pacific Region, which was 76 % year on year combined.

Europe increased by 38 % this year, with Germany as the largest growth contributor, up 108 % YoY, while some smaller markets did even better, Iceland (+248 %), Portugal (+126 %) and Slovenia (+166 %) are some examples.

USA developed slower than other regions; 27%  growth is still ok, considering the delays on the Tesla Model-3 production ramp-up. The original estimate for Model-3 deliveries was 50 000 during 2017, all to US reservation holders. Canada was less impacted by the delay and increased 72 % over 2016. “Others” include over 30 countries in the Americas, Africa, Middle East and Asia/Oceania, with Canada (18600 units), South Korea (13900 units) and Malaysia (7400 units) being the three largest.

second Global Plug-in Sales for 2017-Q4 and the Full Year (prelim.) image
third Global Plug-in Sales for 2017-Q4 and the Full Year (prelim.) image

Global share reached 2 % in December

Global growth accelerated during the second half and consistently so, in many markets. The is little risk, that the higher uptake was related by sales brought forward for the reason of decreasing subsidies, like this was the case in the Netherlands in 2015 and 2016. We are not aware of any related announcements for 2018 incentives. The increased sales rate has pushed plug-ins to new market share heights, with the December global plug-in share reaching nearly 2%, 67 % higher than 12 months before. Until July 2017, the growth trend had been similar to previous years. From August onwards, the whole market has shifted up a gear.  Considering that only 5 months have passed, it is still too early to assert this as a deflection point; we will look closely at the first months of 2018 to have this new market trend confirmed or not. If this sales uptick is confirmed in 2018, we could see the global PEV share reach 3% or more in December ’18. Our forecast for the complete 2018 is close to 2 % share in the global light vehicle market.

Sales surpass 1 million in 2017, PEV share north of 1%

In 2017, plug-in volumes have resumed the 50 %-plus growth rates of previous years. Continuing with this pace would mean that 1 out of 3 cars sold in 2025 would be Plug-ins. Hard to imagine today, but not out of reach. The global market just crossed 1% market share this year, but in some markets it is already far above that: Norway had 39 % plug-in share in 2017, Iceland 14 %, and Sweden 5,3 %. These numbers consider the passenger car market, without commercial vehicles.Amid smallish numbers, the whole sector develops at a rapid pace. The number of public charging locations has doubled within 2 years. The number of available plug-in models has increased from 70 in 2013 over 170 today, more than half of them belongging to Chinese OEMs, which were responsible for launching 77 % of the new models in 2017. Battery costs have come down by 50 % in the last 3 years. Leading OEM have announced EV portfolios good for 25 % in their sales mix, for the next decade, among them VW, BMW and Daimler. And then, there is Tesla …

third Global Plug-in Sales for 2017-Q4 and the Full Year (prelim.) image
third Global Plug-in Sales for 2017-Q4 and the Full Year (prelim.) image

3 Million PEVs

In 2017, the global PEV stock has reached 3 million units, with last year adding 1,2 million to the 2016 tally. Looking ahead, the coming months will confirm China’s continued growth, while elsewhere the increasing introduction / ramp up of more affordable long-range BEVs, will increase growth, with the headlines going for the Nissan Leaf II and the Tesla Model 3.We increased our previous outlook and now predict 1,9 million worldwide plug-in sales for 2018, thereof 400 k in the US, 420k in Europe, 920k in China and 160k outside the aforementioned. This means +56 % in terms of volume and a 54 % increase in terms of light vehicle industry share, to 1,95 %. If India enters the scene, the global total could even be higher. We increase our expectation of BEVs in the mix to 72 %.

By the end of 2018, the plug-in vehicle population will reach over 5 million worldwide. Still, the impact on the vehicle population will be hardly noticeable in most countries. 5 million plug-ins on a global motor vehicle population of around 1,3 billion, is just 0,4 %, one in 250. Growth is exponential, though, and the overall picture will change much faster than historic sales suggest.

China and Tesla boost BEV share

Driven by high growth in China, where BEVs typically stand for over 80 % of “NEV” (New Energy Vehicle) sales, pure electric models continue to gain ground versus PHEVs. The pure EV share for 2017 was 66 %, the highest since 2011. We expect the global mix to shift further towards BEVs, driven by growth in China and by mass adoption of the Tesla Model-3. This does not mean that the PHEV market is contracting, pure EV volumes are just growing faster.In Europe, the BEV portion in the mix is still around 50 % on average, with strong differences between countries. Many European countries still have similar incentives for BEV and PHEVs. European OEM still favour PHEV concepts. For many users, PHEV are a smoother transition towards electrification.

Attempts to nudge demand towards more BEV sales can disturb and confuse the market, when incentives are cut for PHEV, without further stimuli for BEVs.  The Netherlands made that experience in 2016, when, indeed, the mix shifted to BEVs (from 15 % to 85 %), but 80 % of all plug-in sales were lost in the process. PHEVs became unattractive and BEVs did not replace them.

We expect that further markets will try to shift demand towards more zero-emission vehicles, Sweden being the first, in July 2018. The design is similar to the French bonus-malus scheme and will, hopefully, cause less turmoil among plug-in buyers.

Date: 24 January 2018

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