Fuel Type: Batterieelektrisch (BEV)

Updated whitepaper: How will COVID-19 shape used-car markets?

The latest edition of Autovista Group’s whitepaper: How will COVID-19 shape used-car markets? considers the third-wave of coronavirus infections across Europe, and looks at the lessons learned a year since the pandemic first hit the continent.

The whitepaper covers topics including:

  • One year into COVID-19 and the lessons of resilience
  • Used-car markets 2021 – crisis? What crisis?
  • Electric vehicle (EV) tax guide
  • Europe’s used-car market forecasts for 2021 and 2022

Following the emergence of Europe’s automotive sector from COVID-19 lockdowns, a three-speed development of residual values (RVs) has prevailed across the region. Autovista Group’s COVID-19 tracker, which covers 12 European markets, has revealed that residual value (RV) indices for a number of countries have returned to pre-crisis levels. Some, however, are still struggling.

Autovista Group experts discussed the whitepaper findings in the company’s latest webinar – Europe’s used-car markets – recovery from COVID-19. You can watch the presentation below.

Remaining strong

Used-car markets have proven more resilient than expected. In fact, the pandemic has helped some developments over the finish line that have long been in the making. For example, online sales, an advance that the automotive industry was slow to adopt until COVID-19 made it a necessity. Also supply-chain disruption has pushed demand towards the used-car sector.

In addition, the latest whitepaper looks at forecasts for RV development in Europe for 2021 and 2022. Autovista Group experts analyse the latest trends and scenarios for used-car market development across the continent. As countries are hit by a third-wave of infections, economic recovery may yet extend into 2022, even as vaccination programmes pick up their pace.

You can find more information about how different markets are shaping up, and the various economic scenarios across the region, in the latest update of the Autovista Group whitepaper – ‘How will COVID-19 shape used car markets’ – which can be viewed here.

Launch Report: BMW iX3 – conventional and balanced electrification

The iX3 is BMW’s first pure-electric X model and is the most conventional, being effectively a battery-electric vehicle (BEV) version of the best-selling X3.

The iX3 offers good performance, with strong linear acceleration – as usual for a battery-electric vehicle (BEV). The model also strikes a good balance between power and battery capacity, with competitive electricity consumption. In terms of agility and dynamics, the iX3 is slightly better than its direct rivals overall. As the battery is located under the car, this also explains the good roadholding.

Standard equipment is comprehensive, including three-zone climate control, heated and powered front seats (with memory function on the driver’s side), BMW Teleservices and wireless phone charging. Safety features include emergency-assist and rear cross-traffic alert. The 458km range of the iX3 is second only to the Jaguar I-Pace’s 470km range, and it has the fastest charging time when connected to an 11kw AC wallbox, of 7.5 hours.

In addition to BMW’s strong brand image, the iX3 is supported by the company’s longer expertise in electrification. This started with the i3, which has been on the market since 2013, and was followed by plug-in hybrid (PHEV) engines offered on different models in the range, including one for the brand’s X family.

As the first conventional BEV from BMW, the iX3 compares well against key competitors. It is offered at an attractive entry price point and the popularity of both the brand and the X3 range should ensure plenty of demand. Given that the iX3 is very close to the X3, BMW’s D-SUV range is now available in diesel, petrol, PHEV and BEV versions.

Click here or on the image below to read Autovista Group’s benchmarking of the BMW iX3 in France, Spain and the UK. The interactive launch report presents new prices, forecast RVs and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Nvidia expands its automotive influence

The automotive industry is undergoing a monumental period of change. Megatrends like digitisation, sustainability, and electromobility are transforming how a car is designed, built and powered. This means suppliers are also changing as carmakers require more advanced and specialist know-how.

A primary example is the accelerated computing company Nvidia, which first made its name at the turn of the century in the PC-gaming market. Now it is working with Volvo Cars, Zoox and SAIC on the next generation of AI-based autonomous vehicles. Its Omniverse platform is even being used by BMW Group to plan complex manufacturing systems. As Jensen Huang, founder and CEO of Nvidia, said: ‘Transportation is becoming a technology industry.’

254 trillion operations per second 

Volvo, Zoox and SAIC have joined the growing number of transportation companies using the latest Nvidia Drive system. The tech company’s pipeline for the system now totals more than $8 billion (€6.7 billion) over the next six years, which it says reflects the growing range of next-generation vehicles.

‘Besides having amazing autonomous driving and AI technologies, vehicles will be programmable platforms to offer software-driven services. The business models of transportation will be reinvented,’ Huang said. ‘Our design wins demonstrate how Nvidia is partnering with one of the world’s largest and most impactful industries to help revolutionise the future of mobility.’

Volvo will expand its collaboration with the company to use its Nvidia Drive Orin system-on-a-chip (SoC) technology. This will work with software developed in-house by the carmaker and its own software company Zenseact, to power autonomous-driving systems in its next-generation models. The SoC is capable of carrying out 254 tera (or 254 trillion) operations per second (TOPS), which will be essential given the enormous amount of computing power needed for autonomous driving.

Volvo will deploy Orin based on its SPA2 modular vehicle architecture, with the upcoming XC90 front-lining what the SoC can do. The carmaker’s new platform will be available as hardware-ready for autonomy from the beginning of production. Highway Pilot, Volvo’s ‘unsupervised autonomous driving feature,’ will be activated when verified as safe for individual geographic locations and conditions.

‘We believe in partnering with the world’s leading technology firms to build the best Volvos possible,’ said Henrik Green, chief technology officer. ‘With the help of Nvidia Drive Orin technology, we can take safety to the next level on our next generation of cars.’

Robotaxis and EVs

Robotaxi company Zoox is also developing with the help of Nvidia’s technology. The ‘mobility-as-a-service’ (MaaS) provider recently unveiled its Nvidia Drive-powered, purpose-built, bi-directional robotaxi designed for urban areas.

Chinese MaaS provider, Didi, also announced it is adopting Nvidia Drive for its entire autonomous driving test fleet. These two companies will join the ranks of other robotaxi builders already developing on these advanced systems, including Pony.ai and Auto X.

An increasing number of new companies will also use Nvidia Drive Orin to build software-defined vehicles, including Chinese carmaker, SAIC. Its R Auto family will feature the R-Tech advanced intelligent assistant, powered by Orin to run perception, sensor fusion and prediction for automated driving features in real-time. Its premium IM brand will deliver long-range electrically-chargeable vehicles (EVs) with help from the system. This line-up will include a sedan and an SUV with autonomous parking and other automated-driving features.

Virtual factory planning

Nvidia is also working with BMW to create a new approach to planning manufacturing systems with its Omniverse platform. This virtual factory mapping tool integrates planning data and applications, allowing for real-time collaboration.

‘Together we are about to make a huge leap forward and open up completely new perspectives in the field of virtual, digital planning,’ said Milan Nedeljković, BMW board member for production. ‘In the future, a virtual representation of our production network will allow us to realise an innovative, integrated approach to our planning processes. Omniverse greatly enhances the precision, speed and, consequently, the efficiency of our planning processes.’

While virtual factory planning is nothing new, it does require the import of data from various applications. This can be time-consuming as well as complicated owing to compatibility issues. In future, the platform will allow live data to be collected and collated from all databases to create a joint simulation. A new level of transparency will enable teams to plan complex systems with greater speed and accuracy.

Developers at BMW will be able to visualise the entire planning lifecycle for every plant in the global production network. This will be supported by a wide range of AI-capable applications, from autonomous robotics to predictive maintenance and data analysis.

‘I am delighted that BMW is using Nvidia Omniverse to connect their teams to design, plan and operate their future factories virtually before anything is built in the physical world,’ said Huang. ‘This is the future of manufacturing.’

Spain introduces MOVES III incentive scheme

Spain introduced the new MOVES III incentive scheme for electrically-chargeable vehicles (EVs) on 10 April, which includes hydrogen fuel-cell vehicles (FCHVs) for the first time.

All FCHVs, as well as battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs) that cost less than €45,000 (excluding VAT), are eligible, with the price ceiling rising to €53,000 for vehicles with eight or nine seats. Used EVs that are less than nine months old are also eligible.

It is worth noting that across Spain and the major European markets, the residual-value (RV) disadvantage of BEVs compared to petrol cars has widened since March 2020. The greatest divergence has occurred in Germany, where the gap has widened by just under four percentage points (pp) and stood at 10 pp in January 2021. The divergence accelerated notably following the introduction of enhanced incentives on 1 July 2020.

Cautionary tale

This is a cautionary tale for Spain as it rolls out this new scheme. All governments should look into providing incentives to encourage used-BEV ownership, but these do not need to be straightforward purchase incentives. Lower energy costs for charging BEVs and visible expansion of the charging network would also be powerful signals.

‘The biggest potential risk for pressure on RVs stems from the purchase incentives for EVs. A positive and moderating effect comes from the longer-term ownership tax reduction and a lack of company-car tax benefit,’ commented Ana Azofra, head of valuations and insights at Autovista Group in Spain.

As detailed in the table below, private buyers of EVs with an electric range of at least 90 km are entitled to a subsidy of €4,500 in Spain, which is reduced to €2,500 for EVs with a range of 30 to 90 km.

IDAE MOVES III incentive scheme 1

Source: IDAE

For small and medium-sized enterprises (SMEs), the incentives amount to €2,900 for EVs with an electric range of at least 90 km, reducing to €1,700 with a range of 30 to 90 km. For large companies, the incentives are €2,200 for EVs with an electric range of at least 90 km and €1,600 with a range of 30 to 90 km.

MOVES III incentive scheme

Source: IDAE

The scheme runs until the end of 2023, with an initial budget of €400 million, rising to €800 million dependent on its success. This is significantly higher than the original funding allocation of €100 million for the MOVES II scheme that came into effect in June 2020, which the Spanish government extended by €20 million early in March.

‘We have chosen to start with those actions that families, SMEs, the self-employed and, ultimately, the entire fabric of the country can benefit from,’ explained Teresa Ribera, vice president of Spain and minister for the ecological transition and the demographic challenge, in the presentation of the MOVES III plan.

‘It is crucial to keep pace with the actions promoting the value chain of the automotive sector in our country, with the creation of employment and new business models,’ Ribera added.

Unlikely improvement

The new incentives are slightly higher for private buyers but lower for companies. However, the benefits are much greater if a used vehicle over seven years of age is traded in for scrappage. For private buyers, the incentive increases up to €7,000, and up to €4,000 for SMEs and €3,000 for large companies.

‘MOVES III constitutes the most ambitious line of support for electric mobility that our country has proposed and will allow and contribute to the economic reactivation in the short term, accompanying the necessary transformation of the industrial model of our country with the economic and environmental objectives,’ Ribera said.

Nevertheless, the new scheme is unlikely to significantly improve the fortunes of Spain’s new-car market. Registrations grew 128% in March compared with a year ago, but the comparison is distorted by the pandemic. Spanish dealerships closed from 14 March 2020. A more realistic comparison with March 2019 shows the new-car market contracting by 30%. Sales in the first quarter dropped 14.9% against last year’s figures, and were 41.3% down on figures from two years ago.

EV uptake should increase, especially among private buyers, but without an improvement in consumer confidence, and a return of tourism, the Spanish market will continue to struggle overall. Autovista Group forecasts that demand will recover from the 32% loss in 2020, albeit by only 6% to about 900,000 units in 2021.

German registrations start slow recovery in March

New-car registrations in Germany increased 35.9% in March, according to the latest figures from the Kraftfahrt-Bundesamt (KBA).

The figure was inflated due to the country’s first COVID-19 lockdown closing dealerships from mid-March in the previous year. However, at that time, registrations performed well compared to other countries. While Spain, France and Italy posted losses of 69.3%, 72.2% and 85.4%, respectively, Germany only saw a decline of 37.7%.

At the end of the first quarter, new registrations totalled 656,452 units, down 6.4% compared to the first three months of last year. This is despite dealerships being closed. The country’s market also suffered due to a VAT increase, with taxes rising from 16% to 19% at the beginning of the year. Autovista Group estimates that around 40,000 registrations were pulled forward into December last year as a result.

Brand increases

All domestic brands showed positive growth in March 2021, the strongest being Smart with a 304.4% increase. Double-digit increases were recorded by Opel (75.1%), Mini (58%), Porsche (55%), Volkswagen Passenger Cars (VW) (39.1%), Mercedes (36.7%), Audi (17.6%) and BMW (17%). VW claimed the largest share of new registrations, taking 19.3% of the market.

Alfa Romeo showed the most significant increase among the imported brands, up by 114.6%. Fellow Stellantis stablemate Peugeot saw sales grow 78.4% while Tesla enjoyed a 63.6% boost. However, Honda (-33.3%), Mitsubishi (-30%) and Jaguar (-10%) were among those to see sales decline in the month.

Electric closes the gap

In terms of fuel type, the market for battery-electric vehicles (BEVs) achieved a significant increase of 191.4%, with a market share of 10.3%. With German car brands such as VW and BMW increasing their focus on electrification, there now seems to be an appetite for the technology amongst buyers. Plug-in hybrid (PHEV) models achieved a 12.2% market share, with sales increasing 277.5% in the month.

The swing to electric drives is more evident when internal combustion engines (ICE) sales are considered. New registrations of passenger cars with petrol engines increased by 7.1%. However, the market share was just 39.4%. The sale of diesel models continued to decline, with 5% fewer in March 2021 for a 22.1% market share. For the second successive month, diesel sales were outpaced by those of hybrids. When including standard and PHEV models, this powertrain type took 27.8% of the market.

The figures, therefore, show that 38.1% of registrations in Germany during the last month were non-ICE models. This is just 1.3% below the market share of petrol in March. It may not be long until sales of these vehicles outpace those of more traditional powertrains.

Germany extended its lockdown period to 18 April following a spike in infection cases. However, the Federation of Motor Trades and Repairs (ZDK) argued that vehicle dealers should be allowed to reopen fully. The group’s main argument is that while a hairdresser, with a floor space of 10m2, is allowed to have one customer, car showrooms with a floor space of 500m2 cannot open.

Making the CASE for advanced commercial vehicles

Advanced automotive systems including connected cars, autonomous driving, shared vehicles, and electromobility (CASE), are experiencing exponential development as OEMs undergo digitalisation. While many of these technologies might be associated with high-end luxury passenger cars, manufacturers are also exploring commercial vehicle applications.

Toyota Motor Corporation (Toyota) recently announced it would combine its CASE technologies with the commercial vehicle foundations cultivated by Isuzu Motors (Isuzu) and Hino Motors (Hino) as part of a new collaborative effort. Meanwhile, Renault’s light commercial vehicle (LCV) offering is undergoing its own energy transition, emphasising electric and hydrogen drivetrains for its upcoming models.

A commercial CASE

Through their new partnership, Toyota, Isuzu and Hino hope to accelerate the adoption and implementation of CASE technologies. As well as addressing various difficulties facing the transport industry, the three companies hope their collaboration will help the progression towards a carbon-neutral society.

In a press conference, the manufacturers explained small commercial-purpose trucks would be used to help develop battery electric vehicles (BEVs), electric platforms, and fuel-cell electric vehicles (FCEVs). Given the expensive developmental costs of BEVs and FCEVs, this collective approach makes sense. Toyota, Isuzu and Hino are also planning to advance the implementation of infrastructure. This will include introducing FCEV trucks to hydrogen-based society demonstrations in Japan’s Fukushima Prefecture.

The partnership will also look to accelerate the development of autonomous and other advanced systems. By building a connected technology platform for commercial vehicles, they hope to provide logistical solutions to improve transport efficiency as well as reducing CO2 emissions.

‘CASE technologies can only contribute to society once they become widespread,’ the companies explained. ‘Commercial vehicles can play important roles in dissemination, as they travel long distances for extended periods of time to support the economy and society and can be easily linked with infrastructure development. And from the standpoint of carbon neutrality, commercial vehicles can especially fulfil a key function.’

Forming new ties

To promote the partnership, the manufacturers will form a new business called Commercial Japan Partnership Technologies Corporation. This new company will be focused on mapping out CASE technologies and services for commercial vehicles. Moving forward, the collaboration will not only deepen, but open up to other like-minded partners.

Isuzu and Toyota have also agreed on a capital partnership to advance their collaborative efforts. Through a cancelation of treasury stock through a third-party allotment, Toyota is scheduled to acquire 39 million shares of its common stock worth a total of ¥42.8 billion (€332 million).

This will leave Toyota with 4.6% ownership of Isuzu in terms of total issued shares as of the end of September 2020 and a post-allotment voting rights ratio at Isuzu of 5.02%. Isuzu also plans to acquire Toyota shares of the same value through a market purchase.

Renault’s zero-emission solutions

Meanwhile, Renault is renewing and expanding its LCV range, with new versions of the Kangoo, the Express, the Trafic Combi and the SpaceClass. The manufacturer is also developing its Renault Pro+ services, offering turnkey digital and connectivity solutions.

Through this work Renault is looking to support the transmission to zero-emissions. The new Kangoo Van E-TECH Electric is expected by the end of 2021, picking up where the Kangoo ZE left off. It will be equipped with a 44kWh battery, offering a range of 265km. The OEM also offers fleet charging solutions with its subsidiary, Elexent. 

Before the end of the year, Renault will unveil the Master ZE Hydrogen, an alternative to the diesel Master. With its hydrogen partner Plug Power, the manufacturer is looking to capture 30% of the European hydrogen LCV market by 2030.

Smart zero-emission vans promise greater development of green and connected technology for the wider automotive sector. Commercial vehicles spend their lives on the road, meaning any new drivetrain and technology must be well-designed and long-lasting. This know-how can then be utilised by the passenger-car segment, as these systems are stress-tested.

However, these technologies must first be adopted. As demonstrated by the European Automobile Manufacturer Association’s (ACEA’s) latest figures, diesel still reigned supreme last year in the new-LCV segment. Accounting for 92.4% of the van market, the fuel type was leagues ahead of electrically-chargeable vehicles (EVs) which garnered a 2% share. In reality, the adoption of these new drive trains will likely be mandated by zero-emissions policies created at national and international levels.

More effort needed to entice private buyers to EVs

More needs to be done to support the private uptake of electrically-chargeable vehicles (EVs) in the UK, according to the Society of Motor Manufacturers and Traders (SMMT). New figures show businesses are twice as likely to make the switch from petrol and diesel.

Analysis of new-car registrations in 2020 shows that just 4.6% of privately bought cars were battery-electric vehicles (BEVs), compared to 8.7% for businesses and large fleets. This equates to 34,324 private registrations and 73,881 corporate ones.

In response to this, the SMMT has unveiled a new blueprint to deliver a greater retail uptake. With the UK government planning to ban the sale of petrol and diesel vehicles by 2030, the body believes now is the time to change people’s attitudes towards EVs.

‘While last year’s bumper uptake of electric vehicles is to be welcomed, it is clear this has been an electric revolution primarily for fleets, not families,’ commented SMMT chief executive Mike Hawes. ‘Manufacturers are committed to the consumer, reducing costs and providing as wide a choice as possible of zero-emission capable vehicles with many more to come.

‘To deliver an electric revolution that is affordable, achievable and accessible to all by 2030, however, government and other stakeholders must put ordinary drivers at the heart of policy and planning.’

Increasing availability

According to the SMMT, as of March 2021, manufacturers have brought more than 150 BEV, plug-in hybrid (PHEV), hybrid and hydrogen fuel-cell electric vehicles (FCEVs) models to the UK market. BEVs and PHEVs alone account for 25% of all available car models.

However, current higher costs of components’  raw materials mean these vehicles are inherently more expensive to manufacture. This implies an EV will retail for more than its fossil fuel equivalents.

Manufacturers are working hard to bring the cost of production down. Yet, they are constrained by lower demand and battery production costs, which have yet to reach the economies of scale required. Batteries have the biggest overall impact, representing 30-45% of the total production cost the SMMT states. BEVs are not expected to reach purchase cost parity with their internal combustion engine (ICE) counterparts across all car segments in the next few years.

The area where EVs benefit their drivers is in terms of running costs. This is of particular interest to businesses. In addition, company car drivers currently receive stronger and longer-lasting motivation through reduced purchase-taxes and fiscal incentives compared to consumers.

Grants changing

Last week, the UK government announced it will reduce the plug-in car grant and lower the price threshold for eligibility. This effectively adds £500 (€583) to the purchase price of all qualifying EVs under £35,000, and £3,000 to the price of those above £35,000.

By comparison, private buyers in Germany receive a €9,000 grant towards a new BEV, while Dutch drivers do not pay VAT on BEV purchases, equivalent to a purchase cost saving of around a sixth.

The SMMT estimates that maintaining the grant and similarly exempting consumer EV purchases from VAT would increase uptake by almost two-thirds by 2026 compared to current predictions.

Charging locations

The blueprint also calls for more to be done to expand the UK’s EV infrastructure. Private-buyer acceptance remains low because of affordability concerns, charge point availability and infrastructure reliability, according to the SMMT. Around one in three households have no dedicated off-street parking, leaving them disproportionately dependent on public-charging points.

The SMMT’s projections suggest that most drivers will choose to charge their vehicle at home if they can. Therefore, they estimate there would need to be around 2.7 million public-charge points in service by 2030 to provide adequate coverage and tackle range anxiety. The SMMT believes there are around 40,000 charging points in the country, most of which are in London.

This means more than 700 new charge points would have to be installed every day until the end of the decade. By comparison, the current installation rate is approximately 42 a day, according to information provided to the SMMT from charge-point mapping service ZapMap. Funding this expansion is estimated to cost around £17.6 billion.

‘We need incentives that tempt consumers, infrastructure that is robust and charging points that provide reassurance, so that zero-emission mobility will be possible for everyone, regardless of income or location,’ stated Hawes. ‘When every market is vying for these new technologies, a clear and collaborative strategy engaging all would ensure the UK remains an attractive place both to manufacture and market electric vehicles, helping us achieve our net-zero ambition.’

Podcast: A brave new world – leasing, semiconductors, e-storage and recycling

Senior data journalist Neil King and Daily Brief journalist Tom Geggus discuss some of the biggest automotive news topics from the past fortnight. The pair consider leasing by Lidl, the semiconductors shortage, Shell’s electricity-storage system and battery-recycling initiatives.  

Show notes

Lidl supermarket chain offers car leasing online in Germany

Germany extends lockdown measures to 18 April

Semiconductor factory fire in Japan adds to global shortage

Europe sets sights on semiconductor production

Shell trials on-site, battery-powered, electricity-storage system

Reuse and recycle: a mantra for EV-battery manufacturing

Schwacke Insights März 2021 – monatliche Kennzahlen im Überblick

Die Februarzahlen offenbaren das aktuelle Dilemma. Zwar sind die Preise derzeit recht stabil mit leicht positiver Tendenz, aber aufgrund des Lockdowns ist auch wenig Bewegung im Bestand und die Standzeiten nehmen wieder zu. Insbesondere elektrifizierte Antriebe – abgesehen von Vollhybriden – setzen ihren Negativtrend in Prognose und Bewertung fort. Angesichts ungebremster Neuzulassungen auf GW-Kanäle wie Handel, Vermieter und Hersteller ist auch nicht mit kurzfristiger Besserung zu rechnen. Bei den Schnelldrehern tauchen nun in diesem Alterssegment erstmalig relevante Mengen Mercedes GLC Plug-In Hybride auf und finden offenbar schnell Abnehmer. Die 2017er Polo der sechsten Generation setzen sich als Diesel an die Spitze der Kurzsteher, was womöglich daran liegt, dass die immer noch aktuelle Generation seit Herbst 2020 neu nicht mehr als Selbstzünder angeboten wird.

Grafik Schwacke Insights März 2021

VW Group plans for cheaper EV-battery mass production

Volkswagen (VW) Group has presented its technology roadmap for batteries and charging up to 2030. The carmaker has also indicated that by ramping up its plans, jobs will need to be sacrificed.

The OEM will establish six gigafactories in Europe with a total production capacity of 240GWh by 2030. It will also expand its public fast-charging network, having announced cooperation with BP in the UK, Iberdrola in Spain and Enel in Italy.

Its new roadmap aims to significantly reduce both the battery’s complexity and cost, making electrically-chargeable vehicles (EVs) attractive and viable for consumers. At the same time, it will shorten its supply chain and control as much of the EV production of as possible.

‘E-mobility has become core business for us,’ commented Herbert Diess, chairman of the VW Group board. ‘We are now systematically integrating additional stages in the value chain. We secure a long-term pole position in the race for the best battery and best customer experience in the age of zero-emission mobility.’

Manufacturing control

As the market leader in Europe, VW Group knows it is responsible for delivering affordable electromobility as the industry transitions away from internal-combustion engine (ICE) technology. While some carmakers have announced plans to go EV-only, the carmaker is creating a sub-brand for its Volkswagen marque. Stablemate Bentley is choosing to focus on battery-electric vehicles (BEVs), and Porsche is investigating eFuels. All VW Group brands will feature electrification in some way. This means the carmaker will need an excessive amount of batteries, both for BEV and plug-in hybrid (PHEV) models.

‘Together with partners, we want to have a total of six cell factories up and running in Europe by 2030, thus guaranteeing security of supply’, explained Thomas Schmall, VW Group board member for components.

To achieve its aims, VW Group will increase its order of batteries from its supplier Northvolt by €14 billion. It will focus production of premium cells at its factory in Skellefteå, Sweden, which will see manufacturing begin in 2023 and increase gradually to an annual capacity of 40GWh. The carmaker will also purchase outright the joint venture it has with Northvolt for a gigafactory in Salzgitter.

‘Volkswagen is a key investor, customer and partner on the journey ahead, and we will continue to work hard with the goal to provide them with the greenest battery on the planet as they rapidly expand their fleet of electric vehicles,’ said Peter Carlsson, co-founder and CEO of Northvolt.

The company is considering potential sites and partners for the other factories.

Cheaper batteries

As well as increasing production, VW Group wants to lower the cost of batteries, making vehicles more affordable as a result. ‘We aim to reduce the cost and complexity of the battery and at the same time, increase its range and performance,’ added Schmall. ‘This will finally make e-mobility affordable and the dominant drive technology.’

Therefore, by 2023, the company will introduce a ‘unified cell’, which will feature in 80% of all EVs in the group by 2030. This plan will allow the carmaker to introduce different chemistries into a standard battery-cell design, which will reduce costs while ensuring that each model retains a unique power or range attribute.

Further savings will be delivered by optimising the cell type, deploying innovative production methods, and consistent recycling.

VW Group will gradually reduce battery costs in the entry-level segment by up to 50% and in the volume segment by up to 30%. ‘We will use our economies of scale to the benefit of our customers when it comes to the battery too. On average, we will drive down the cost of battery systems to significantly below €100 per kilowatt-hour. This will finally make e-mobility affordable and the dominant drive technology,’ said Schmall.

Expanding charging infrastructure

In order to facilitate mass-adoption of its EVs, the OEM is also looking to expand its fast-charging network and has partnered with local providers in key markets to achieve this.

Along with its partners, the company intends to operate about 18,000 public fast-charging points in Europe by 2025. This represents a five-fold expansion of the fast-charging network compared to today.

The carmaker wants to establish about 8,000 fast-charging points throughout Europe together with BP. With a charging capacity of 150kW, the fast chargers will be installed at 4,000 BP and Aral service stations, with the majority of these in Germany and Great Britain. In cooperation with Iberdrola, Volkswagen will cover the main traffic routes in Spain. In Italy, it will collaborate with Enel to establish a fast-charging network both along motorways and in urban areas. The carmaker will also continue its activities as part of the Ionity joint venture.

Job losses

While the roadmap promises cheaper EVs with increased production, the carmaker is also poised to cut jobs to reduce costs.

In agreement with its works council, the group will freeze its workforce size at the January 2021 level and open up an extensive retirement package. It will offer partial retirement to employees born in 1964, as part of the digital transformation roadmap. It will reopen partial retirement for those born in 1961 and 1962, and launch an early-retirement programme for those born between 1956 to 1960.

‘Disciplined cost management will continue to be necessary to finance the required investments in the future, to remain competitive and, above all, to make it possible to safeguard jobs in the long run,’ commented Gunnar Kilian, chief human resources officer of Volkswagen AG. ‘The measures set out in the guidelines provide the right solution for this. We are strengthening the internal transformation of our workforce and creating jobs in forward-looking areas – through training and targeted external recruitment. For this purpose, we are also increasing our training budget by €40 million to a total of €200 million.’

Based on experience, the company expects up to 900 employees to volunteer for the short-term early-retirement models, with a low four-digit figure for partial retirement.

Video: Europe’s registrations struggle in February but improvements to come

Autovista Group Daily Brief editor Phil Curry discusses the registration figures from Europe’s big five automotive markets. While numbers may be down, the outlook for the whole year is more positive…

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel.

Show notes

Lockdown drives German new-car registrations down by 19% in February

February UK new-car registrations plunge to level of 1959

Significant downturns in European registrations in February

Conditional reopening of German car showrooms

England’s car showrooms to remain closed until 12 April

Podcast: How is European automotive adapting to pandemic and climate-change fallout?

Daily Brief editor Phil Curry and journalist Tom Geggus discuss key activities and developments in the European automotive sector from the past fortnight. These include COVID-19’s effect on the uptake of mobility-as-a-service (MAAS), different fuel types, and autonomous technology.

Show notes

Cazoo buys Cluno as CaaS options increase

Significant downturns in European registrations in February

Lockdown drives German new-car registrations down by 19% in February

February UK new-car registrations plunge to level of 1959

VW accelerates towards electric and digital future

VW aims for commercialised autonomous systems in 2025

Is it too early to go ‘EV-only’?

Ford to be zero-emission capable in Europe by 2026

Jaguar makes BEV and hydrogen changes on path to net zero

Volvo to go all electric and online by 2030

E-fuels gain awareness as Mazda joins alliance

The remarketing risk of EVs

The remarketing of electrically-chargeable vehicles (EVs) is examined by Autovista Group experts in our latest webinar. The mixed approach across Europe to provide stimuli for EV sales is paying off, with forecasters predicting a 40% market share for the technology by 2030. Does the increase in registrations trigger new remarketing risks? The panel considers whether the increasing sales of EVs will impact RV performance over the next three years. It also looks at potential differences in risk between BEV and plug-in hybrids (PHEVs).

You can view the entire webinar below, or download the slide deck here.

Autovista Group will be running a number of webinars looking at automotive trends this year. To be notified of upcoming events, subscribe to the Autovista Group Daily Brief.

Podcast: How does electric impact residual values and used-car strategies?

The Autovista Group Daily Brief team takes a look at some of the biggest automotive trends of the past fortnight. Phil Curry, Neil King and Tom Geggus discuss electrically-chargeable vehicle residual values, electromobility strategies and modular electric platforms.

Show notes

Surging demand for new BEVs mounts pressure on residual values

France invests €100 million in EV-charging infrastructure

Call for one million public EV chargers in the EU by 2024

Ford to be zero-emission capable in Europe by 2026

Jaguar makes BEV and hydrogen changes on path to net zero

REE maps out UK engineering centre

Shell to transform into net-zero energy provider by 2050

Video: How can carmakers attract investment?

Autovista Group chief economist Dr Christof Engelskirchen and director of automotive agency Car Design Research, Sam Livingstone, discuss how investors value car-producing technology companies above traditional OEMs. As more new entrants come into the automotive industry, what options do traditional players have to engage and attract investment?

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel.

Schwacke Insights Februar 2021 – monatliche Kennzahlen im Überblick

Der Jahresauftakt wurde durch den Lockdown gründlich verhagelt. Zwar sind die Inseratslöschungen leicht gegenüber dem Vormonat gestiegen, aber dies hat technische Gründe. Die verkauften Mengen sind deutlich unter Vormonat und -jahr. Die Prognose folgt dem stetigen Abfall des Bewertungsniveaus und zeigt besonders für Elektrifizierte weiter hohen Druck. Unterdessen zeigen die Bewertungen von Benziner und Diesel leicht positive Tendenz, was die Prognose stabilisieren wird. Die Standzeiten wuchsen durch geschlossene Betriebe weiter an und lassen die Schere zwischen Elektrisch und Verbrenner weit offen. Bei den Schnelldrehern wird sichtbar, dass gebrauchte dreijährige Diesel in der Pandemie teils zur Mangelware wurden und entsprechend zügig Absatz finden. Der Handel hofft nun auf ein baldiges Lockdown-Ende, stehen doch die so wichtigen GW-Monate März bis Mai bevor!

 

Insights Februar 2021 Restwertdaten in Grafiken

European battery supply chain boosted by two new projects

As battery-electric vehicles (BEV) move from the realms of alternative fuel to mainstream automotive technology, the supply chain for the critical component, the battery, needs to be shortened.

Currently, the industry relies on shipments from Asia. To maintain efficiency and reliability of supply as the production of BEVs increases within Europe, a closer network of gigafactories is required. In recent days, announcements suggest efforts are being made to establish a European supply network, saving the industry from potential issues, as seen with the recent semiconductor shortage.

A new company, Italvolt, will establish a gigafactory in Italy, with the first phase of the project scheduled for completion by 2024. Lars Carlstrom, former founder and shareholder of the Britishvolt project created the new company.

Italvolt states that its factory will employ around 4,000 people and be the largest in Europe, with an initial capacity of 45GWh, increasing to 70GWh. The 300,000m2 facility will be built in a yet-to-be-determined location in the country, with investment projected at €4 billion.

‘With the gigafactory project, Italvolt wants to give an important answer to the historic opportunity of green industrialisation, which is affecting all production sectors in a transversal way, representing a turning point for the global economy,’ commented Carlstrom.

The company states that demand for batteries in Europe, primarily driven by the automotive market, will hit 565GWh by 2030, behind only China, with an expected demand of 1,548GWh. Locating its factory in Italy gives it access to another market area, with carmakers such as Stellantis manufacturing in the country.

UK ambition

Following Brexit uncertainty, the UK has seen a swathe of announcements in recent months that have boosted the country’s automotive industry. Vehicle electrification is driving these investments, with the aforementioned Britishvolt project and news that Nissan will bring battery manufacturing to the country.

There could now be a third project that would see a gigafactory developed in Coventry, with the city’s council entering a partnership with the owners of Coventry Airport.

The joint venture partners will develop proposals and submit an outline planning application for a gigafactory in 2021. This will take place alongside regional discussions with battery suppliers and automotive manufacturers to secure the long-term investment.

The UK’s West Midlands area is home to several carmakers, including Jaguar Land Rover (JLR), BMW, and LEVC and Aston Martin Lagonda. The UK government has made up to £500 million (€577 million) available for investment in a battery-manufacturing facility, and the area will be tendering a bid for funding from this pool.

‘Coventry has emerged as a world leader in battery technology,’ said George Duggins, Coventry City Council leader. ‘The city is home to the UK Battery Industrialisation Centre, world-leading research institutions, and the UK’s largest carmaker, JLR, and it is clear to me that Coventry is the right location.

‘Coventry Airport sits at the heart of this powerful automotive research cluster and is the obvious location for a UK gigafactory. It will immediately plug in to a mature automotive supply chain and skills eco-system.’

The plans will have been boosted by news that JLR is to transition its Jaguar brand to a BEV-only marque by 2025, while Land Rover will launch six new battery models, with manufacturing centred in the UK. A supply of batteries on their doorstep would make sense, cutting delivery times and improving the carbon footprint of their BEVs with reduced shipping.

Jaguar makes BEV and hydrogen changes on path to net zero

Jaguar is to become an electric-only brand by 2025, as part of parent company Jaguar Land Rover’s (JLR) plans to be a zero-carbon business by 2039.

As part of a new strategy, presented by CEO Thierry Bolloré, JLR has set a path for a sustainable future. The Reimagine plan will see Land Rover produce six battery-electric vehicles (BEVs) in the next five years, with the first variant arriving in 2024. Jaguar will transition all models to BEVs by the middle of the decade.

The carmaker is looking to achieve net-zero carbon emissions across its supply-chain, products and operations by 2039. As part of this, JLR is preparing for the expected adoption of fuel-cell technology, in line with a maturing of the hydrogen economy.  Fuel-cell prototypes are set to be seen on UK roads in the next 12 months as part of a long-term investment programme.

‘Jaguar Land Rover is unique in the global automotive industry,’ commented Bolloré. ‘Designers of peerless models, an unrivalled understanding of the future luxury needs of its customers, emotionally rich brand equity, a spirit of Britishness and unrivalled access to leading global players in technology and sustainability within the wider Tata Group.

‘We are harnessing those ingredients today to reimagine the business, the two brands and the customer experience of tomorrow. The Reimagine strategy allows us to enhance and celebrate that uniqueness like never before. Together, we can design an even more sustainable and positive impact on the world around us.’

JLR will make an annual commitment of around £2.5 billion (€2.9 billion) to the plan, including investments in electrification technologies and the development of connected services to enhance the customer experience.

Underpinnings

Land Rover will use its forthcoming modular longitudinal architecture (MLA) platform for upcoming hybrid and BEV models, while also using the company’s electric modular architecture (EMA). Jaguar will build future models on a platform designed exclusively for pure-electric models.

This is part of a plan to consolidate platforms across the business, allowing JLR to focus on efficiency in production and quality of the finished product. It will also help to rationalise sourcing and accelerate investments in the supply chain.

The announcement also included confirmation that JLR will continue to build vehicles in the UK. Its plant in Solihull will become home to Jaguar’s BEV models, while also manufacturing the MLA. The replacement of the current Jaguar XJ model will also not be pursued. With its West Midlands plant geared up for BEV production, it is likely JLR’s site at Castle Bromwich will be repurposed.

The company will substantially reduce and rationalise its non-manufacturing infrastructure. Its executive team and other management functions will move to its Gaydon site to aid cooperation.

Show of faith

The move is good news for the UK automotive industry, which is finding its feet again after years of Brexit uncertainty. JLR’s commitment to the country follows Nissan’s announcement that it will invest in its Sunderland plant and bring battery manufacturing to the country.

‘The news that the UK’s largest automotive business has confirmed its long-term commitment to the UK is very welcome and is an injection of confidence into the wider sector,’ commented Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT). ‘Its roadmap to a future that is built around sustainability, with electrified and hydrogen models as well as investment in connected and digital technologies, aligns with government ambition and increasing consumer expectations.

‘Delivering this ambition, however, will require the UK to improve its competitiveness. The UK automotive industry is essentially strong, innovative and agile, but the global competition is fierce. The UK government must ensure advanced manufacturing has its full support, with a policy framework and plan for growth that reduces costs, accelerates domestic battery production and electrified supply chains, and incentivises R&D and skills development. Every effort must be made to create conditions that will enable the entire sector to flourish.’

Electric future

JLR’s decision to turn its Jaguar brand into an electric-only marque is in line with an industry that is starting to fully embrace the zero-emission technology after years of development. The timescale, stopping the sale of internal combustion engines in around four years, may sound ambitious. However, Jaguar already has a BEV model on the market, the I-Pace, while it has also shortened the number of non-electric models it offers in recent years as part of financial cutbacks.

Therefore, the company is ideally placed to make this announcement with such a short timeline. It will hope that it can achieve these targets before its main rivals, including Audi, BMW and Mercedes-Benz, and therefore take advantage of shifting consumer attitudes towards luxury BEVs.

The move to bring hydrogen fuel-cell vehicles to test this year also shows the company’s proactive thinking. With electric drivetrains moving from development to production, carmakers now have space to consider the alternative fuel. Hydrogen can produce the range and refuelling times of internal combustion engines, while also producing zero emissions. The technology is already used by Toyota and Hyundai.  JLR partner BMW is planning to bring a hydrogen model to market next year.

Surging demand for new BEVs mounts pressure on residual values

Residual values (RVs) of battery-electric vehicles (BEVs) in the big five European markets are lower than they were at the onset of the COVID-19 pandemic, in both value and retention (RV%) terms, except in the UK. Senior data journalist Neil King explores the latest developments and the challenges for used BEVs.

Registrations of BEVs in the European new-car market, comprising the EU and the UK, grew by 126.5% compared to 2019, to almost 650,000 units. However, the surge in demand for new BEVs is not reflected in Europe’s used-car markets. Consequently, their RVs after 36 months and 60,000 kilometres were weaker in January 2021 than when COVID-19 took hold in March 2020, except for modest growth in the UK.

‘New BEV sales have risen sharply to company-car users over the past 12 months, fuelled by the attractive benefit-in-kind tax rates. With few current incentives available for used buyers. However, there is concern that when these cars come to the end of their contracts, supply may outstrip demand, negatively impacting residual values,’ explained Jonathan Brown, car editor at Glass’s in the UK.

Residual-value development of BEVs, big five European markets, March 2020 to January 2021

Restwertentwicklung von BEVs, große fünf europäische Märkte, März 2020 bis Januar 2021

Source: Autovista Group, Residual Value Intelligence

These developments are in stark contrast to activity across the whole market. In 2020, new-car registrations in the EU and the UK suffered an overall decline of more than 3.7 million registrations due to COVID-19, equating to a loss of a quarter of the volume. Buoyed by resilient used-car demand, RVs of all cars in the 36-month/60,000km scenario in the big five European markets had returned to pre-COVID-19 levels by mid-November 2020.

Oversupply risks

With price pressure on used BEVs already mounting, this amplifies the question; Who will buy Europe’s used-electric cars? Through a combination of government incentives, improved infrastructure, extended ranges, more choice, and the fear of CO2-emissions fines, forecasts point to electrically-chargeable vehicles gaining a market share of around 40% in Europe by 2030, 80% of them being BEVs. For BEVs alone, that creates a €92 billion remarketing challenge, which needs to be addressed.

Unless demand for BEVs gathers pace in Europe’s used-car markets, RVs will continue to suffer and there is a risk of oversupply to EV-import markets too. As yet, there are currently no signs of saturation on these markets, and the demand for BEVs in Norway, for example, is expected to grow by 13% annually over the next five years, according to Rødboka (part of Autovista Group) in Norway. However, this may no longer be sufficient to resolve the RV conundrum created by the government incentives for EVs across Europe.

‘Continuing the current government policy will continuously add pressure to the used EV market as volumes are still pushed. The ability of Norway, for example, to absorb German EVs has a very limited impact on the upcoming local problems, though it ‘helped’ in the past. The entire Norwegian new-car market is about 150,000 vehicles a year, so let’s assume they take 100,000 used cars up to four years of age per annum. Germany alone ‘produced’ 230,000 used EVs in 2020, with different future ages, depending on whether they were fleet or tactical registrations. Thinking optimistically of 60% being absorbed locally, how many of the remaining 90,000 used cars should Norway import to solve our volume problem? And registrations of new EVs are still growing,’ cautioned Andreas Geilenbrügge, head of valuations and insights at Schwacke.

Diverging values

RVs of BEVs are below those of petrol cars in all the big five European markets, except Italy. Even here, however, the gap has narrowed to BEVs only having a 0.7 percentage point (pp) advantage over petrol cars, compared to 4.6 pp in March 2020. Furthermore, the new purchase incentives for BEVs, introduced by the Italian government on 1 January 2021, will reduce their used prices and this minor advantage is therefore expected to turn negative imminently.

RV% development of petrol cars and BEVs, Italy, March 2020 to January 2021

RV% Entwicklung von Benzin-Pkw und BEVs, Italien, März 2020 bis Januar 2021

Source: Autovista Group, Residual Value Intelligence

In the other major European markets, the RV disadvantage of BEVs compared to petrol cars has widened since March 2020. The greatest divergence has occurred in Germany, where the gap has widened by just under 4 pp and stood at 10 pp in January 2021.

The divergence accelerated notably following the introduction of enhanced incentives on 1 July 2020, supporting the assumption of a forthcoming negative impact on values of BEVs in Italy. The federally-backed buyer incentive scheme doubled to €6,000 for BEVs costing less than €40,000, such as the Volkswagen ID.3. When paired with the manufacturer bonus of €3,000, customers are able to save €9,000. BEVs with a net price between €40,000 and €65,000, like the Audi e-Tron Sportback, are eligible for €5,000 in government subsidies, alongside a €2,500 OEM bonus.

‘COVID forced the German government to support the ‘suffering’ automotive industry. And as it wasn’t popular to drive internal-combustion engine (ICE) sales, they decided to make a push on BEVs and plug-in hybrids (PHEVs), but not standard hybrids (HEVs), by doubling the incentives. But the lack of used-EV support puts double pressure on RVs by lowering transaction prices of new EVs with the incentive, while not incentivising used examples,’ Geilenbrügge emphasised.

RV% development of petrol cars and BEVs, Germany, March 2020 to January 2021

RV%-Entwicklung von Benzin-Pkw und BEVs, Deutschland, März 2020 bis Januar 2021

Source: Autovista Group, Residual Value Intelligence

The biggest gap in RVs between BEVs and petrol cars remains in France. The difference in January 2021 stood at 18.6 pp, although this is only slightly wider than the 17.9 pp gap in March 2020. On a positive note, this sizeable gap in France should at least stabilise following the introduction of a €1,000 incentive for used BEVs on 1 January.

‘Despite the introduction of the bonus on the used-car market, sales of used BEVs remain low. France is still lacking charging points and 25% of them are out of order, which is not supporting the development of the used-car market. The only impact of the bonus, from my point of view, would be to stabilise RVs a bit more,’ commented Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux.

RV% development of petrol cars and BEVs, France, March 2020 to January 2021

RV% Entwicklung von Benzinautos und BEVs, Frankreich, März 2020 bis Januar 2021

Source: Autovista Group, Residual Value Intelligence

All governments should look into providing incentives to encourage used-BEV ownership, but these do not need to be straightforward purchase incentives. Lower energy costs for charging BEVs and visible expansion of the charging network would also be powerful signals.

Autovista Group is hosting an online seminar on the remarketing risk of electric vehicles on 23 February – join here.

Podcast: Jumpstarting 2021 – registrations, electromobility and shows

The Autovista Group Daily Brief team takes a look into some of the biggest automotive news stories of the past fortnight. Phil Curry and Tom Geggus discuss January’s new-car registrations, how carmakers like Ford, Hyundai, and Daimler are tackling electromobility, and whether there should be automotive shows this year.

You can listen and subscribe to receive podcasts direct to your mobile device, or browse through previous episodes, on Apple, Spotify, Google Podcasts and search for Autovista Group Podcast on Amazon Music.

Show notes

EU new-car registrations to start recovery in second half of 2021

Deceptively shaky start to 2021 new-car registrations across Europe

Germany: new-car registrations down 31% in January

UK new-car market suffers ‘worst start to the year since 1970’

EVs make great strides across European markets in 2020

Ford trebles size of UK EV-charging network

Hyundai boosts zero-emission mobility

Daimler to become Mercedes-Benz as it spins off truck business

Will there be a physical motor show in 2021?