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As carmakers look to reduce their average CO2 emissions, many are collaborating in pools to spread their figures across a wider fleet. Autovista Group Daily Brief editor Phil Curry explains the benefits…
To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel. There you will find videos on a range of subjects including autonomous vehicles, new-car registrations, safety systems, and electrification.
Autovista Group senior data journalist Neil King considers the slump in registrations in France, Italy and Spain in October.
Despite the existence of government-backed incentives in France, Italy and Spain, new-car registrations in October have dropped over the month, according to the respective automotive trade associations.
Following the lifting of coronavirus (COVID-19) related lockdowns earlier in the year, the countries’ automotive markets had shown signs of recovery. However, all three contracted for the third consecutive month in October, with the exception of the incentive-induced growth in Italy during September.
New-car registrations, France, Italy and Spain, year-on-year percentage change, January to October 2020
Source: CCFA, ANFIA, ANFAC
New-car registrations were 9.5% lower in France in October 2020 than in the same month of 2019 (there was one less working day in the month than in October 2019), according to the latest data released by the CCFA, the French automotive industry association. This is a greater downturn than the 3.0% year-on-year contraction in new-car registrations in the country in September. However, factoring in the lower number of working days (22 in October 2020 versus 23 in October 2019), the CCFA has calculated that the market declined by 5.4% based on an equal comparison.
The incentives introduced on 1 June for new battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs) remain, but the additional bonus for trading in older cars for cleaner new and used cars was exhausted before the end of July. The scrappage scheme reached its 200,000-vehicle cap after just two months, although the Ministry of Ecological Transition did announce the replacement of the recovery scheme with a conversion bonus, which has been in effect since 3 August.
‘Orders were quite good at the start of October, but they deteriorated sharply at the end of the month,’ explained François Roudier, spokesperson for the CCFA. Roudier added that sales revenues are ‘healthier’ than is usual for the end of the year, with more sales to private buyers and less discounted prices meaning ‘margins have held up well.’
In the first 10 months of 2020, new-car registrations in France were 26.9% lower than in the same period in 2019. However, the CCFA reports that demand is 39.1% lower on the basis of a comparable number of working days.
Roudier warned that ‘we must remain cautious about the management of the last months of 2020.’ Between the unpredictable behaviour of consumers in the face of bonuses and penalties, and the ongoing effects of COVID-19, ‘we have a difficult end of the year,’ he concluded.
Pain in Spain
In Spain, 74,228 new cars were registered during October, 21.0% fewer than in October 2019 according to ANFAC, the Spanish vehicle manufacturers’ association. ‘The negative evolution of the pandemic, together with the uncertainty regarding the related social and economic consequences, is causing a generalised fall in sales, which could be even worse without the support plans approved for the sector,’ ANFAC commented.
The MOVES II and RENOVE schemes were introduced in July and the new-car market saw a 1.1% increase in the month. Since then, however, there have been respective monthly declines of 10.1% and 13.5% in August and September, and now 21.0% in October. It is therefore clear that weak underlying consumer demand is the problem in the country. Measures to deal with the second wave of COVID-19 infections, and the calculation of the registration tax based on WLTP emissions figures from January 2021 are further complicating the recovery.
Noemi Navas, communications director of ANFAC, explained that ‘the purchase assistance plans are good tools to achieve stimulation of the market and prevent the falls from being even worse. The crisis situation is going to extend into 2021 and if we do not want the sector and its employment to fall even more, it will be necessary to maintain the support. At ANFAC, we are very concerned about the effect that an increase in the registration tax would have, due to the switch to WLTP, in a market that cannot overcome the COVID-19 crisis.’
‘It is important to make the buyer understand that if they intend to change cars, they should not postpone the decision. From January, there is a risk of a rise in prices as a consequence of the entry into force of the WLTP regulation, which will mean that vehicles that were previously exempt from registration tax will have to pay as the parameters for measuring CO2 emissions change,’ added Tania Puche, communications director of the Spanish dealer association GANVAM.
Italy back in negative territory
In Italy, the year-on-year downturn in October reported by the industry association ANFIA was just 0.2%, although the result would have been positive (up by about 4%) had there not been one less working day. Nevertheless, this does mark a return for the country to negative territory following the 9.5% growth in new-car registrations in September due to the new government incentives that came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). While the market still contracted in that month, demand improved but delivery times delayed many registrations until September.
‘In this phase, we are engaged in ministerial meetings for the presentation of the proposals of the Italian automotive industry in relation to the recovery plan, an opportunity not to be missed to support the sector in this difficult industrial transition. We are working on the four pillars necessary to guarantee its strategic repositioning and competitive advantage: interventions to support investment in research and innovation; the promotion of smart and shared-mobility projects; interventions on human capital and financial interventions to support businesses. We hope that these lines of action are considered a priority and may have sufficient space in the final plan,’ commented Paolo Scudieri, president of ANFIA.
The key to recovery of new-car markets revolves around countries agreeing budgets for 2021, and improving economic certainty and consumer confidence to boost spending. However, with a second wave of COVID-19 cases washing across Europe, and accompanying lockdowns, the industry certainly does face a difficult end to 2020.
Ford will enter a pool with Volvo Cars to meet its 2020 European CO2 emissions target. The recall of the Kuga plug-in hybrid (PHEV) reduced the number of low-emissions models the carmaker could sell this year, impacting its fleet-average CO2 level.
But while Volvo Cars announced it was set to overachieve on this year’s targets, its subsidiary Polestar confirmed it is also initiating a recall. As safety concerns continue to plague electric vehicles (EVs) and shake consumer confidence, manufacturers will need to act decisively if they want to meet their respective emissions targets.
Ford’s recall
In August, Ford recalled and suspended sales of Kuga PHEVs built up until 26 June, after four vehicles reportedly caught fire. The problem was traced back to the potential for water to cause an electrical short, which could then lead to overheated battery cells. It was estimated that over 20,000 models could be affected. With the Mustang Mach-E not yet in showrooms, Ford lacks a mass-market EV, leaving it heavily reliant on PHEVs to meet its emissions obligations.
‘Ford always has, and will continue to meet, the EU’s emissions targets. Based on our product roadmap and production schedule for this year, we expected to comply with the new regulations, and this was still our intent with the COVID-related disruption to manufacturing,’ the carmaker said in a statement sent to Autovista Group. ‘However, given the current supplier battery issue with the Kuga PHEV, Ford now will enter a pool to meet the EU’s 2020 emissions regulations without penalty for passenger vehicles, just as many other OEMs have done in Europe.’
‘We recently declared our intent to join an open pool with other OEMs and can confirm we are doing so with Volvo Car Corporation,’ Ford added. ‘Conversely, as we anticipate over achieving our CO2 targets on light commercial vehicles, we have filed separately our intent to form an open pool so other OEMs can benefit from the positive CO2 performance of our light commercial fleet.’
Pooling with Volo
At the end of October, Volvo Cars and its EV affiliate Polestar confirmed they would be able to reduce fleet emissions beyond their joint CO2 target. This left them with enough surplus to enter a pool with Ford, with the resulting revenue from the deal to be reinvested in new green-technology projects.
‘For Volvo Car Group, the future is electric and we are transforming our company through concrete action,’ said Håkan Samuelsson, chief executive of Volvo Car Group. ‘I am pleased to see that we are exceeding our CO2 reduction targets. It proves our strategy is the right one for our business and for the planet.’
PHEVs made up more than a quarter of Volvo Cars’ sales in Europe during the first three quarters of 2020. By 2025, the carmaker aims for its global sales volume to consist of 50% BEVs, with the rest made up from hybrids. Meanwhile, Volvo’s EV brand began deliveries of the Polestar 2 in July. But as Ford joins Volvo’s emissions pool, the Polestar 2 has climbed into the same boat as the Kuga PHEV, as it too hits stormy waters.
Polestar recalls
In a statement issued at the end of October, the BEV-maker confirmed it is initiating a recall as well as a service campaign of the Polestar 2. The recall will involve the replacement of faulty inverters on most delivered customer vehicles. This unit transforms stored energy in the battery into the power required by the electric motors. Polestar confirmed the total number of affected vehicles delivered to customers is 4,586.
Meanwhile, the service campaign relates to the high-voltage coolant heater, which is responsible for both cabin and high-voltage battery heating. The carmaker confirmed that faulty parts fitted to early production cars need to be replaced. The total number of affected vehicles delivered to customers is 3,150.
So, in the wake of the Kuga PHEV recall, Ford found emissions regulations relief in Volvo Cars, whose affiliate is now coming face to face with EV issues itself. As recalls ravage new EV models, carmakers must act quickly to ensure consumer confidence does not take too much of a nosedive. If public opinion takes a dramatic turn against PHEVs and BEVs, the potential for manufacturers to achieve their emissions targets will plunge.
Autovista Group Daily Brief editor Phil Curry explains why some carmakers are concerned about rising CO2 levels, and how the industry has got to this point with a strict European target in place…
To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel. There you will also find videos on a range of subjects including autonomous vehicles, new-car registrations, safety systems, and electrification.
The automotive industry has been dominated by a few specific topics in the last year; from coronavirus (COVID-19) to electromobility and the advance of new technologies. But how have these subjects impacted one of the industry’s most important sectors? In a new series, Autovista Group’s Daily Brief journalist, Tom Geggus, speaks with industry insiders to discover how these themes are changing fleets. In this second instalment: electromobility.
While COVID-19’s impact on the automotive industry has been sharp and sudden, the effect of environmental concerns can be considered tectonic. But now the two phenomena are driving change in tandem, with COVID-19 acting as a catalyst for a shift to greener mobility. Pandemic recovery plans and environmental regulations are leading automotive companies and consumers down the road of electrification. Leaders of the European Automobile Manufacturers’ Association (ACEA) recently called for pandemic recovery funds to be channelled into a green comeback.
Analysis conducted by Transport and Environment (T&E) revealed that electric cars will treble their market share in Europe in 2020, with most carmakers on track to meet their EU emissions targets. The environmental lobbying group also pointed to company cars as the ‘low-hanging fruit’ of electrification. T&E claim the segment could be utilised to achieve national climate goals, given that six out of 10 cars sold in Europe are company cars, and that last year 96% of new registrations belonging to the sector were petrol or diesel. So how are fleets adapting to electrification in the wake of COVID-19?
PHEVs meet policy
Management consulting company let it fleet sees the high life cycle cost of vehicles and increasing congestion in cities as cars are chosen over public transport, alongside the desire and need to be environmentally friendly, as leading people to alternative modes of transportation. This means a fundamental role change for fleet managers.
On top of looking after company vehicles, fleet managers will now oversee a wider variety of transport options, not to mention learning about new mobility technologies. As travel needs change with new working practices, combined with the influence of environmental consciousness, flexible approaches to mobility and policy will be essential. Plug-in hybrid electric vehicles (PHEVs) are one key example, as government incentives, OEM supply and emissions regulations drive adoption.
‘Maybe the leasing will be over five to six years into the future because you will be driving less,’ said Alain Duez, co-founder of let it fleet. ‘It could also be that you will have more hybrid cars because driving less means that it will be more in favour of the hybrids tomorrow.’
‘If we look at what the market is offering, you cannot do without the plug-in hybrid, because there is not enough offering yet,’ explained Wim Buzzi, co-founder of let it fleet. ‘It is a good technology. But if you’re going to allow your people to drive plug-in hybrids without recharging them, then you have a crucial error in your policy.’
This opens up the potential for the creation of specific strategies to deal with how these vehicles are used, in line with day-to-day operations. For example, over-reliance on the internal combustion engine (ICE) could render a PHEV’s electric capacities pointless if not properly utilised, making its green credentials effectively null and void. Companies could lay out comprehensive policies for when, where and how to recharge, all dictated by how the car is driven. Equally. the employee could simply submit their fuel bill, so long as it reflects responsible use.
This also lays the road for onboard technologies, like telematics and smartphone applications, all allowing fleet managers to determine employee travel patterns. Accompanied by open communication and transparency, this would help assess the potential options for reducing costs and emissions without affecting efficiency or productivity. However, while driver behaviour might change as well as powertrain technology, the basic need for mobility will not.
‘Maybe in 10 years’ time, people will not have a dedicated company car parked in their car park every day, and they will have a subscription model. But they will always need the car,’ said Buzzi. ‘So, in whatever form, that car will always be included.’
Online trends drive on-road vehicles
COVID-19 also resulted in a surge of online shopping, with 52% of consumers buying more online from domestic retailers and 49% stating they will do so more in the future. But as concerns over the environmental impact of these trends grow, logistics companies are having to double-down on green initiatives.
Deutsche Post DHL (DPDHL) recently announced it is further committing to reducing emissions, in line with its GoGreen programme. By 2050, DPDHL aims to reduce all logistics-related emissions to zero. EVs currently make up 15% of DPDHL’s fleets, an increase of 10% over the last three years. In its 2019 Sustainability Report, the logistics company revealed that it uses over 13,000 vehicles with alternative drive systems, including more than 11,600 EVs.
‘In terms of e-mobility, especially in terms of electrification of our delivery fleet, I believe that we are really one of the leaders in the global market, and we are very proud of that position,’ said Nancy Cui, vice president for global car and van procurement at DPDHL. ‘I think that the percentage of our electric van fleet is, in comparison to the rest of the market, very high, especially in the LCV segment.’ However, integrating EVs into a demanding delivery role did initially invoke some range anxiety.
‘With the introduction of these electric vans in domestic parcel and letter services, we saw at the very beginning some kind of range anxiety of the couriers,’ explained Lars Pappe, Vice President of eMobility design and development at DPDHL. ‘But pretty soon the drivers found out they have an average route length of only 25 to 40 kilometres a day, while the battery capacity of these vehicles exceeds this by far. So even in wintertime, there is enough battery capacity left to return to the depot.’ This realisation, coupled with proper route planning and staff training packages, helped reduce driver range anxiety to a minimum.
Alongside its delivery vehicle subsidiary, StreetScooter, DPDHL also has a strong focus on infrastructure. ‘DPDHL Group has installed more than 15,000 charging points throughout Germany in our depots and electrified roughly 13,000 of our delivery routes here,’ said Pappe.
Presently, the logistics company is tasking a dedicated team with assessing DPDHL sites around the world, working out the electrification needs in terms of infrastructure and energy supply.
Going carbon negative
Microsoft began a PHEV project in Germany roughly three years ago, before the implementation of green incentive schemes. The team discovered the powertrain could be a useful tool when tackling fleet emission targets. However, the PHEVs had to make optimum use of their electric capacities, which meant charging them as often as possible, and not over-using the ICE.
This push to make the most of different environmentally-friendly technologies will be essential for Microsoft as it looks to meet its own green targets. At the start of this year, the computing giant announced it will become carbon negative by 2030, and, by 2050, will have removed all of the environmental carbon it has emitted, either directly or by electrical consumption, since it was founded in 1975.
To combat this, Microsoft is working on a number of measures. It is forming new strategic alliances with existing partners like Shell, to secure supplies of renewable energy. It is extending its internal carbon tax to tackle indirect emissions, as well as electrify its global campus operations vehicle fleet by 2030. How the company goes about acquiring vehicles like these for its fleets involves a rigorous procurement process.
‘We work with a selected number of OEMs,’ explained Michael Pohl, senior procurement engagement manager fleet at Microsoft. ‘We tender them every three to four years, which we just did last year, and now the result is a new setup. With those OEMs, we work closely on our strategy, on discounts, on bonuses, and on agreements.‘
‘Some OEMs do offer discounts for electric vehicles, but this is not common, and they are not in the same league as the discounts on standard drivetrains. Of course, every OEM is keen for us to purchase as many electrified cars as possible, because it will help them with their CO2 emissions and potential penalties they have to pay to the EU, but they cannot necessarily deliver the number of cars we would need in a given or required timeframe.’
Essential infrastructure
As EV demand builds momentum, OEMs must boost manufacturing processes to keep pace while suppliers incentivise sales. These measures will have to go into overdrive as consumers and fleet managers alike begin to see the long-term benefit of electromobility. One of these benefits is the overall cost of owning an EV.
At the end of September, LeasePlan released its annual Car Cost Index, which reveals the true cost of owning a car, including fuel, depreciation, taxes, insurance and maintenance. EVs in the compact and mid-size segment are fully cost-competitive compared to ICE-powered vehicles in countries including France, Germany, and the UK. Autovista Group analysis also reveals that B-segment and C-segment BEVs are competitive compared to petrol models, albeit only because of government incentives.
‘The good news is that the costs of EVs are coming down and we are seeing the development of a strong second-hand market for quality used EVs,’ said Tex Gunning, CEO of LeasePlan. ‘The bad news is that governments are failing to provide the charging infrastructure necessary to satisfy market demand.’
In a recent blog post, Mathijs van der Goot, global lead on EVs for LeasePlan said, ‘it is essential to ensure that the charging infrastructure is aligned with the flourishing e-mobility market.’ There are currently more than 195,000 public charging in Europe, a rise of over 300% since 2014. But this falls a long way short of how many the industry needs. Last year, LeasePlan called for one million charging stations by 2025 and the European Commission estimates 2.8 million will be required by 2030.
A report filed by Technology intelligence company IDTechEX in September outlines the unique demands fleets could have on EV infrastructure. ‘Although electric fleet charging represents roughly 3% of the total charging infrastructure in volume, it constitutes over 20% of the total market value due to the added cost associated with the high-power requirements,’ the report states.
So, the need for improved charging infrastructure to support fleet electrification is vital, even as EVs become more affordably priced. If fleet managers are going to adopt these vehicles on a wide scale, charging anxiety will need to be tackled alongside shrinking price tags. Subsidies and governmental schemes will help tackle this challenge, but the advancement of charging technology will also play its part. But will this be the only big tech change coming to fleets within the next few years?
Want to know how COVID-19 has impacted fleets? Catch up with the series by reading the first instalment here.
In its latest podcast, the Autovista Group Daily Brief team discusses the new Monthly Market Dashboard, plug-in hybrid (PHEV) recalls and manufacturer emissions targets…
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Das gesamte Gebrauchtwagenjahr zeigt sich weiter krisenfest und robust. Das Preisniveau liegt zwar deutlich unter 2019, was aber weniger Corona als der allgemeinen Preisentwicklung seit 2018 geschuldet ist. Derzeit bewirken zurückgehende Mengen stabile Preistendenzen und nicht wenige Händler berichten von Nachschubmangel. Die Innovationsprämie, die E-Fahrzeuge und Plug-In Hybride stark in die Neukäufergunst drängt, hält zwar für Gebrauchtkäufer keine adäquate Motivation bereit, aber dennoch färbt der Neuwagenerfolg auf die Vorgänger ab und hält den Preisverfall auf. Hier ist im weiteren Jahresverlauf und dem nächsten Jahr mit stärkeren Einbußen als bei Verbrennern zu rechnen. Bereits seit 2019 im Sinkflug wird das Preisniveau bei sprunghaft ansteigenden Mengen nachgeben müssen, noch verstärkt durch das prämienbedingt reduzierte Transaktionspreisniveau für Neuwagen.
BMW is carrying out a global recall of some of its plug-in hybrids (PHEVs) produced this year, due to battery fire concerns. The carmaker is also suspending delivery of affected vehicles as part of a ‘preventative measure.’
The recall notice will come as a blow to the manufacturer, which recently revealed promising third-quarter free cash flow figures. Thanks to a fast recovery in several markets, BMW saw higher sales growth compared to the same period last year, on top of optimised working capital and a reduction of fixed costs. The manufacturer’s free cash flow from the automotive segment in Q3 2020 amounted to over €3 billion, compared with €714 million in Q3 2019.
But more widely, the recall could have a knock-on effect on vehicles equipped with alternative powertrains. With faults being reported by the likes of BMW and Ford, consumer confidence could take a real hit, alongside the residual values (RVs) of these electric vehicles (EVs).
Worldwide recall
In a statement to Autovista Group’s Daily Brief, the German carmaker confirmed the details of the recall. ‘BMW Group has launched a worldwide safety recall and stopped delivery of a small number of plug-in hybrid vehicles as a preventative measure to check the high-voltage battery,’ it said.
‘Internal analysis has shown that in very rare cases, particles may have entered the battery during the production process. When the battery is fully charged this could lead to a short circuit within the battery cells, which may lead to a fire.
‘A total of 26,700 vehicles are affected worldwide, of which only around 9,000 vehicles are already with customers and have been recalled. BMW apologises for the inconvenience caused to customers, but of course, safety must come first,’ the carmaker concluded.
In the US, National Highway Traffic Safety Administration (NHTSA) documents reveal that BMW became aware of an incident involving a 2021 BMW X5 on 4 August 2020, where the vehicle experienced a ‘thermal event’, whereupon it began analysis. Then, between early August and mid-September, the manufacturer became aware of three additional incidents.
‘A review of supplier production and process change records indicated that for the incident vehicles, battery-cell production at the supplier occurred during a specific and limited time period,’ the document states. The NHTSA document identifies Samsung as a component manufacturer. Autovista Group’s Daily Brief did approach the battery maker for comment, but it did not respond prior to publication.
On 23 September, BMW decided to conduct a voluntary safety recall. According to the NHTSA report, there are some 4,509 recalled PHEVs in the US, including 2,441 X3 xDrive30e (2020-2021), 1,228 X5 xDrive 45e (2021), and 33 Mini Cooper Countryman All4 SE (2020-2021). BMW is currently working on a solution to the fault. Until a remedy is available, drivers will be instructed to not charge their vehicle, not to drive in manual or sport mode, and to not use the shift paddles.
Wider EV impact
BMW is not alone when it comes to EV difficulties. Both Audi and Jaguar recalled their battery-electric vehicles (BEVs) in June 2019. Audi experienced issues with the e-Tron’s battery cells, while Jaguar recalled the I-Pace because of a software fault that could have resulted in the failure of the electric braking system.
In August, Ford issued a recall notice for Kuga PHEVs it built up until 26 June, after four vehicles reportedly caught fire. The problem was traced back to the potential for water to cause an electrical short, which could then lead to overheated battery cells. It was estimated that over 20,000 models could be affected.
Recently, Ford Werke GmbH posted a video to YouTube, with managing director Hans Jörg Klein, apologising for issues with the model and asking for customer patience as troubleshooting could take months rather than weeks.
With manufacturers pushing to make an electrified COVID-19 comeback, the success of their electrified models is of paramount importance. Carmakers are considering PHEVs as an essential stepping stone for some consumers on the road to full BEVs. If big brands like BMW and Ford produce problematic PHEVs, consumer confidence in electrified vehicles could take a hit.
This could then have a knock-on effect on RVs, as consumers shy away from vehicles linked to recalls, potentially in favour of models with internal combustion engines. As pointed out in the Autovista Group and Twaice Power of Signalling whitepaper, information on battery condition can be invaluable to help combat the asymmetry of information, and could significantly increase RVs.
The UK government has confirmed it will adopt European Union (EU) emissions targets for 2021 and beyond at the end of its Brexit transition period on 31 December 2020.
Following a consultation, the government said that the existing target of 95g/km CO2 emissions averaged across a vehicle fleet would remain, meaning carmakers may continue with their current strategies to ensure they meet the strict regulations. Many are looking to achieve this by selling a greater number of battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs). However, all must now be aware of their performance in two markets, rather than a single one.
Had the UK government decided to go its own way with regards emission targets, there were fears that the supply of BEVs and PHEVs in the country would become limited, as carmakers focused on supplying Europe to meet the needs of a bigger market.
The new UK rules will mirror those in the EU, including an £86 (€95) fine for each g/km above the carmakers’ respective targets multiplied by the number of vehicles registered in the year.
Changing figures
As the UK’s average fleet mass is heavier than that of the EU, the UK government has highlighted that the sum of individual manufacturer targets in the UK will be slightly higher than the sum of targets in the EU.
‘While this may therefore appear to be a slight relaxation of standards, by retaining the average EU mass value, it replicates the same level of effort required by manufacturers as under the current scheme in the EU,’ the government said. ‘This ensures that the regulation is as ambitious as existing arrangements.
‘If the UK average mass value was used to calculate manufacturer targets instead, it would make targets immediately more challenging.’
The UK average mass is updated every three years and will be used in calculations from the next due update onwards.
Future targets
The UK will also adopt EU targets set for 2025 and 2030 for a further reduction in vehicle CO2 emissions, meaning manufacturers will have to reduce output by 15% (based on 2021 levels) in 2025, with a 37.5% reduction in 2030.
European regulations (EU) 2017/1152 and (EU) 2017/1153 establish the correlation procedure to be used during the regulation’s conversion from New European Driving Cycle (NEDC)-derived targets and calculations to Worldwide Harmonised Light-Vehicle Test Procedure (WLTP)-derived targets and calculations.
While the corrections needed to ensure these regulations continue to function in the UK are minor, the EU dataset will be used as a basis for the correlation between NEDC and WLTP, providing further clarity for carmakers.
Super credits
One of the biggest changes in the government’s consultation announcement is the lowering of the CO2 g/km threshold for carmakers to apply for ‘super credits’. The credits can be used against emissions targets, and work as an incentive for manufacturers to sell more zero- and low-emission electric vehicles (ZLEVs) as they will multiply within a fleet. For 2020, one super credit counts as two vehicles, with this dropping to 1.67 in 2021, and 1.33 in 2022.
In the EU, the amount that manufacturers may benefit from the use of super credits is capped at 7.5g/km cumulatively over 2020-2022.
As the new regulations will only take effect from 2021, the UK government has decided to reduce the cap for two years to 3.75g/km. This received a mixed response in the consultation, some arguing that the figure was too high as carmakers may have already used their EU-mandated 7.5g cap, others suggesting it was too low, unfairly affecting those looking to bring more ZLEVs to the market in 2021 and 2022.
‘It is evident via the nature of the responses that this issue is complicated,’ the government said. ‘An increase in the super credits can act as an incentive for car manufacturers to put more ZLEVs on to the market, which is in line with the government’s net-zero and decarbonisation commitments.
‘Equally, the government recognises super credits can artificially lower manufacturer targets, thus providing the opportunity for higher emission vehicles to be sold. There is the possibility that manufacturers will use their EU-allocated 7.5g CO2/km cap in 2020 alone, meaning the 3.75g CO2/km cap available across 2021 and 2022 will be in addition to the super credits offered in the EU regime. Whilst this is possible, due to the timelines for enforcing the regulation, it will not be known until October 2021.’
New-car registrations increased in Germany by 8.4% last month, compared to September 2019. A total of 265,227 passenger vehicles were registered according to the latest figures published by the automotive authority Kraftfahrt-Bundesamt (KBA).
This marks the first month of growth for Germany this year. So far, the country has recorded double-declines almost every month in 2020, reaching of its biggest decline of minus 60% in April as the coronavirus (COVID-19) pandemic froze the automotive market.
New-car registrations, Germany, year-on-year percentage change, January to September 2020
Source: KBA
Powered by electric incentives
In some cases, alternative drivetrains underwent three-digit increases compared to the same month last year, no doubt buoyed by incentives. From 1 July, Germany increased its incentives for BEVs costing up to €40,000. The one-off payment rose from €6,000 to €9,000 and for models costing between €40,000 and €65,000, the incentive is now €7,500.
A total of 21,188 battery-electric vehicles (BEVs) were registered, up 260.3% compared to September 2019, capturing a market share of 8%. With 20.4% of the market, 54,036 hybrids were registered, up 185.2%, including 20,127 plug-ins (PHEVs), with a share of 7.6%, up 463.5%. LPG experienced an increase of 176.1% with 809 vehicles and a 0.3% market share. A total of 606 natural-gas vehicles was registered, up 17.9% with a share of 0.2%.
Meanwhile, not benefitting from any incentives, cars powered with internal combustion engines (ICE) saw double-digit drops. Petrol fell by 17.6%, with 120,645 new cars registered and 45.5% of the market. A total of 67,901 new cars were powered by diesel, decreasing 6.4%, and a 25.6% market share. The average CO2 emissions fell by 13.4% in September at 134.3g/km.
With a share of 21.2%, most of the new vehicles were allocated to the SUV segment, up 9.7%. After an increase of 5.7 %, the compact class achieved a share of 21%. Small cars held a share of 16.8%, up 28.9%. However, not all segments faired so well. Mini vans fell by 46.8% to a 1.3% market share, sports cars to 1.0%, down 12.1%, and minis down 2.8% to 6.0%.
Brand performance
Audi recorded a double-digit increase in new registrations at 42.2%. Other German brands like Mini (4.7%), BMW and Mercedes (1.9% each) and VW (1.6%), showed single-digit increases. Meanwhile, Smart suffered one of the worst declines in registrations at -41.2%, followed by Opel (-27.6%), Porsche (-19.7%) and Ford (-0.8%). The VW brand claimed the largest share of new registrations at 15.2%.
As for imported brands, Tesla (82.7%), Seat (71.1%), Subaru (70.4%), Alfa Romeo (59.5%) and Renault (58.4%) all experienced increases of more than 50%. In contrast, DS (-41.5%), Ssangyong (-29.0%) and Mazda (-24.7%) all saw double-digit declines. Recording a 29.6% increase in registrations, Skoda claimed 6.8% of the market share.
Automotive associations in France and Spain have reported declines in their September registrations, while Italy has recorded its first increase of 2020, largely thanks to government-backed incentives finally boosting registration figures. Autovista Group Daily Brief editor Phil Curry assesses the results.
Following the lifting of coronavirus (COVID-19) related lockdowns, the automotive industry in some of Europe’s biggest markets has shown signs of recovery. However, as the year goes on, pent-up demand and incentive schemes are making way for a drop in consumer spending due to economic woes, while a second wave could also impact sales.
New-car registrations, France, Italy and Spain, year-on-year percentage change, September and year-to-date 2020
Source: CCFA, ANFAC, ANFIA
New-car registrations in France fell 3% during September, according to the latest data released by the country’s automotive authority, the CCFA. Taking into account the number of working days in September 2020 compared to the same month last year (22 days compared to 21), this decline increases to 7.4%
Despite positive increases in June and July, thanks to a comprehensive incentive scheme, the removal of financial bonuses, following the cap in the budget being reached, have seen sales drop in the last two months.
Although a 3% decline is an improvement over August results, the market is still 28.9% down year-to-date. Over nine months, registrations stood at 1,166,699 units. The CCFA is forecasting the market as declining by 25-30% over the whole of 2020, amounting to the lowest number of registrations in 15 years.
Spain too logged a decline in registrations, with the market down 13.5% in September, according to the latest data from ANFAC. This is a decrease from August, despite the introduction of an incentive scheme in the country. Just 81,746 units were registered in the month.
Spain was one of the worst-hit markets in Europe, and the country’s government has recently introduced a number of local lockdowns, including the city of Madrid, as COVID-19 cases start to increase again.
While this move may not have impacted heavily on September figures, it highlights the changing situation in Europe, and how the automotive industry may struggle for the rest of the year. The Spanish market is down 38.3% year-to-date, according to the latest figures, with 595,435 registrations.
‘The drop in registrations worsened again in September compared to August,’ explained Noemi Navas, communications director of ANFAC. ‘Sales continue to fall in all channels, and this has a serious impact on employment, industry (because one in four cars manufactured in Spain stays in the country) and society as a whole. Without forgetting, due to its impact, that the renovation of the parc is slowed down and with it, the necessary reduction of CO2 emissions that we have to undertake. The RENOVE Plan [Spain’s incentive scheme] still has sufficient funds to boost sales for the last quarter, and we hope that the evolution of the virus will not slow down the market even more.’
Positive aspects
Italy offered an exception to the trend currently being seen in Europe, posting an increase in registrations of 9.5% in September, according to Italian industry association ANFIA. This is likely due to the country’s incentive scheme, which began in August. While sales in that month declined, delivery times would likely have pushed registrations back into September, boosting figures.
The country was the first to go into lockdown, doing so in March of this year. Since these measures were lifted, the Italian automotive market has shown a slow but steady increase in registrations, leading to the increase over the same month last year. This is in contrast to other markets, which have shown rapid increases followed by further declines.
‘The incentives introduced have contributed to this result,’ said Paolo Scudieri, chairman of ANFIA. ‘Funding for the 91-110g/km CO2 vehicle band was quickly exhausted, while those available for the 61-90g/km CO2 bracket will soon be depleted.’
Year-to-date figures show the Italian market is still down 34.2%, with 966,017 passenger cars registered.
Incentive burnout
The results show a mixed impact of incentive results. In France, the scheme was well received and depleted quickly, leaving the market at the mercy of a drop in consumer spending.
New-car registrations, France, Italy and Spain, year-on-year percentage change, January to September 2020
Source: CCFA, ANFIA, ANFAC
However, in Spain, the RENOVE scheme seems to have passed many buyers by, with funding still available, but a minimal impact on sales. The market saw a 1.1% increase in July, the first month of the MOVES II and RENOVE scheme introduction, but since then has posted declines of 10.1% (August) and now 13.5%. With funding still available, it is clear that consumer demand is the problem in the country. With the implementation of local measures to deal with a second-wave of COVID-19 infections, a further complication to recovery is being added.
‘In September there was a market slowdown,’ said Raúl Morales, communications director of Faconauto. ‘The evolution is not good, but we are still at a registration volume that is better than expected thanks largely to the effect of the RENOVE.
‘Undoubtedly, the worsening of the health situation and a new decline in confidence is already weighing on consumers, who view not only the present but also the future with suspicion. This slowdown was the fear we had, and that leaves us facing a last quarter of the year marked by uncertainty.’
Die Erholungs-Tendenz der aktuellen Bewertungen setzte sich im August – abgesehen von elektrifizierten Antrieben – weiter fort. In den Prognosen spiegeln sich dagegen noch Auswirkungen der
Vorkrisen-Entwicklung und erste Anteile der Krisenmonate März und April wieder. Die dreijährigen Gebrauchten bekommen dabei weiter attraktiven Rücklauf aus 2017, während den jungen Gebrauchten langsam der 2019er Nachschub aus Handels- und Eigenzulassungen ausgeht und 2020 dahingehend ja tief im Minus steht.
Während die Jungen vom Neuwagenlieferverzug profitieren, kommen den hier gezeigten Älteren die enger geschnürten Gürtel mancher Jung-Käufer sowie ex-ÖPNV-Umsteiger zugute.
Die stark rückläufigen Standzeiten bestätigen das hoffnungsvolle Bild. Bei den Schnelldrehern schaffen es sogar zwei Modelle mit ansehnlichen Stückzahlen deutlich unter die 30 Tage-Grenze!
The Autovista Group Daily Brief team discusses the biggest automotive news stories of the last fortnight. In this episode, Neil King examines Europe’s registration figures, Phil Curry focuses on fuel types, and Tom Geggus studies battery supply chains.
You can also listen and subscribe to receive further episodes direct to your mobile device on Apple, Spotify and Google Podcasts.
Following the emergence of Europe’s automotive sector from coronavirus (COVID-19) lockdowns, a ‘three-speed’ development of residual values (RVs) has prevailed across the region. Senior data journalist Neil King explores the region’s variations.
The UK and France have enjoyed a rally, driven by pent-up demand in the initial post-lockdown period. Autovista Group’s COVID-19 tracker, which tracks 12 European markets, shows that the index of RVs, compared to early February, has risen since mid-May and peaked at 104.8 (a 4.8% rise) in the UK and 102.4 (a 2.4% rise) in France in the week to 6 September. The start month was February, with a value of 100.
The UK is enjoying the release of pent-up demand, both from the lockdown and the uncertainty running up to the country’s departure from the European Union on 31 January. It also faces a starker vehicle-supply challenge than any other market, which is filtering through to higher RVs as used-car demand outstrips supply. ‘Stock of both new and used cars is the biggest issue in the UK. This is driving up used prices and we do not see the bubble bursting quite yet. It’s September and even convertible demand is still high, with values increasing,’ commented Anthony Machin, head of content and product at Glass’s.
French Revolution
France benefitted from pent-up demand and a new incentive scheme that came into effect on 1 June. The €8 billion package includes a €7,000 grant for private buyers of new battery-electric vehicles (BEVs) costing less than €45,000 (€5,000 for fleet buyers), while buyers of new plug-in hybrids (PHEVs) can claim a €2,000 subsidy.
Additionally, France doubled its premiums for those looking to trade in older vehicles for a cleaner model, with a €3,000 grant for vehicles with internal combustion engines (ICE) and €5,000 for BEVs and PHEVs. Crucially, the enhanced trade-in bonus also applies to used cars and hence the notable rise in RVs. However, the scheme reached its 200,000-vehicle cap before the end of July and the Ministry of Ecological Transition announced the replacement of the recovery scheme with a conversion bonus, applicable from 3 August.
‘In France, OEM plants restarted late and slowly, creating a lack of new-car stock in July and even more in August. Moreover, as people have defected from the new-car market to the used-car market, increasing demand, the low stock of used cars explains the ongoing increase in residual values. This is especially true in the A- and B-segments, where the conversion bonus is working really well, but this is not the case for all fuel types and segments,’ commented Yoann Taitz, operations director of Autovista Group in France.
Used-car transactions surged; 595,942 used cars changed ownership in France in June, 29.1% more than in June 2019, according to data published by the French carmakers’ association CCFA. This was followed by year-on-year growth of 13.3% in July and 16.8% in August. Nevertheless, there were still 9.2% fewer used-car transactions in the first eight months of 2020 than in the same period in 2019.
Autovista Group anticipates a slowdown in the RV development in France and our latest RV outlook calls for prices of used cars to be 0.3% lower in France at the end of 2020 than when the COVID-19 crisis erupted in Europe, in March. In the forthcoming September update of Autovista Group’s whitepaper, How will COVID-19 shape used car markets?, we will reveal which market is forecast to be the most resilient among the 18 European countries covered.
Source: Autovista Group, Residual Value Intelligence, COVID-19 tracker
Rapid-reaction markets
Sweden, Finland and Portugal all had rapid negative reactions to COVID-19. Dramatic lockdown measures were not introduced in Sweden and Finland, but RVs fell from early February to mid-May in both markets.
However, RVs have climbed in Sweden since mid-June and recorded 100.7 on the index in the week to 6 September, i.e. 0.7% higher than in early February. ‘The used-car market has recovered fine as stocks are decreasing and sales volumes and values are rising,’ said Johan Trus, chief editor of Autovista Group in Sweden. ‘People were not allowed to travel to other countries, so the summer vacation has been spent in the country, and then people needed a car to travel. In addition, car exports have picked up.’
In Finland, the index of RVs fell from early February to only 97 in mid-June and has remained at the lowest level in Europe since. ‘Finland is still running on low numbers, and we don’t see the same quick recovery as in Sweden. The import of young used Swedish cars has picked up again too, in combination with lower used-car values than normal, already before the crisis started,’ Trus commented.
Portugal also endured falling RVs since the tracker index started in February but a more pronounced downturn commenced at the end of March. As in Finland, the price index is only showing a modest increase and has not recovered to pre-coronavirus levels.
‘Used-car sales continue to recover quicker than new-car sales. In July, used-car sales grew 25% year-on-year whereas new-car sales fell 16.9%, although this was a significant improvement on June, when the drop was 56.2%. There was just a small 0.1% decline in new-car sales in August but the drop was 8.6% including light commercial vehicles,’ said Joao Areal, editorial manager of Autovista Group in Portugal.
‘In the next months, we will understand if the demand for used cars continues to grow or if this was due to pent-up demand built during the lockdown. The car market represented more than half of consumer credit in July but of this amount, 85% was for used cars. Although we can see a recovery in the car market, we are still far from pre-COVID-19 values,’ added Areal.
Late starters
The rest of Europe’s tracked markets remain ‘late starters’, where several effects are balancing each other out.
The first reason for the ongoing stability in many markets is that they have essentially remained ‘on hold.’ In Italy for example, ‘the market has been waiting for a better understanding of the full impact of the economic crisis, especially considering that many experts are convinced that we could face a second wave and a new lockdown in autumn,’ explained Marco Pasquetti, forecast and data specialist of Autovista Group in Italy.
RVs fell again in Italy from late June to late July. This is partly because of the incentives to support the country’s automotive industry, which came into effect on 1 August. ‘There is also the Ecobonus incentive scheme, but the amount allocated is insufficient in our opinion (so far). We think that we’ll see an impact on values starting from September,’ Pasquetti added.
The significant disruption to new-car supply and registrations is also impacting RVs in ‘late-starter’ markets.
In Germany for example, used-car transactions were just 6% lower in the first eight months of the year than in the same period in 2019, according to the KBA. They have even performed better than last year for two consecutive months. New-car registrations have been far more affected, however, and are still 29% lower in the year-to-date than in 2019.
‘The lack of new-car supply still boosts young used-car sales but dealers seem to be unnecessarily discounting them even more than before the crisis – probably in favour of a quicker turnaround of stock. After a proper autumn, we expect stronger price competition at dealers in the last two months of the year as they compensate for the loss in new-car sales with higher used-car turnover,’ commented Andreas Geilenbrügge, head of valuations and insights at Schwacke.
The situation is a bit more optimistic than before in Spain, but the country faces the same challenge. ‘The automotive sector is resisting the crisis better than expected, helped by the measures to boost the sector that the government put in place. The production stoppages have also reduced pressure on used-car stock and the average number of stock days is much longer now. However, there are fewer new used cars coming into the dealers and I think the MOVES and RENOVE plans and/or the high discounts for new cars and young used cars will end up affecting transaction prices in the coming months,’ said Ana Azofra, valuation and insights manager at Autovista Group in Spain.
Switzerland saw the same dramatic decline in new-car sales volumes as elsewhere. ‘So, nearly new cars, aged 0-6 months, served to fill the gap left by missing new cars and increased their values temporarily. However, used cars aged 0-6 months, as well as those aged seven to 17 months, are losing ground again as new-car sales slowly regain some of the terrain lost during the lockdown,’ commented Hans-Peter Annen, head of editorial for Autovista Group in Switzerland.
‘Now manufacturers have resumed production and all the individual new-car incentives are back, this will most likely increase the used-car stock volume and the pressure on RVs,’ Annen added.
Meanwhile, there has been continued positive development of RVs in Poland.
‘I can observe continuous good demand for young used vehicles. They are a lower financial risk for buyers in the volatile market situation. Besides, list prices are growing very fast. That’s probably due to expected penalties for CO2 targets and the introduction of WLTP and the new Euro 6d norm, with more complicated engines (mild-hybrids),’ commented Marcin Kardas, head of the Autovista Group editorial team in Poland.
‘On the one hand, the financial contracts between companies and fleet suppliers are extended, which will cause a lack of the youngest used cars on the market. But a lot of people still work from home so don’t need a car and the economy remains unstable. In this environment, it is really hard to predict the direction of RVs. Growing list prices will decrease them but strong demand for used cars will positively influence them. To recognise the real post-COVID effect, we should wait a bit longer but I don’t expect significant changes in the coming months,’ concluded Kardas.
As the UK looks to ban the sale of petrol, diesel and some hybrid powertrains by 2035, a new survey has highlighted the key issues consumers identify as putting them off purchasing battery-electric vehicles (BEVs). This is leading to calls for incentives and targets from the government to ensure the switch can be made seamlessly.
The survey, conducted by Savanta Comres on behalf of the Society of Motor Manufacturers and Traders (SMMT) suggests almost half of UK motorists don’t feel ready to buy a BEV. This, the body says, means the government should commit to ‘significant long-term incentives for purchases and binding charges on charging infrastructure.’
Electric vehicles (EVs), including BEVs and plug-in hybrids (PHEVs), are rapidly growing in popularity, with demand more than doubling over the last year thanks to massive industry investment worth some £54 billion (€59.4 billion) in 2019 alone. Over the last 12 months, the number of PHEV and BEV models available to buy in the UK has leapt from 62 to 83, with more scheduled for launch in the coming months.
There is interest from consumers in EV technology, with drivers attracted to lower running costs (41%), while interest in improving the environment only accounts for 29% of responses. However, while these cars now accounting for one in six models on sale (17%), they make up just one in 13 purchases (8%).
Issues found
The survey found the biggest factors holding buyers back are higher purchase prices (52%), lack of local charging points (44%) and fear of being caught short on longer journeys (38%). Encouragingly, a third (37%) are optimistic about buying a BEV by 2025, 44% don’t think they will be ready by 2035, with 24% saying that they cannot ever see themselves owning one.
However, the SMMT believes that the main barriers, those of cost and charging infrastructure, can be overcome with the right strategy. It is calling for a long-term commitment to incentives, including the continuation of the Plug-In Grant, which sees £3,000 taken off the price of a BEV, and the reintroduction of the grant for PHEVs, a technology which acts as a bridge for those who want a low-emission vehicle but still want the reassurance of an internal combustion engine (ICE). This grant was cancelled in 2019.
‘This commitment, alongside VAT exemptions for all zero-emission capable cars, would reduce the upfront price of a family car by an average £5,500 for battery-electric cars and £4,750 for plug-in hybrids, and for an SUV by £9,750 and £8,000 respectively – vital given the high cost of producing this advanced new technology,’ the SMMT stated. ‘This would bring them more in line with petrol and diesel equivalents and potentially drive some 2.4 million sales over the next five years, with an estimated 28% market share by 2025 compared with 8% today.’
Increased charge
Extensive analysis by the SMMT, alongside Frost and Sullivan also shows that a full, zero emission-capable UK new car market will require 1.7 million public charge points by the end of the decade and 2.8 million by 2035. Given there are only some 19,314 on-street charge points available in the UK at present, the task is massive, needing 507 on-street chargers to be installed per day until 2035, at a cost of £16.7 billion.
‘Carmakers are leading the charge to zero-emission motoring, with massive investment in new models fuelling huge consumer interest but they can’t transform the market alone,’ commented SMMT chief executive Mike Hawes. ‘To give consumers the confidence to take the leap into these technologies, we need government and other sectors to step up and match manufacturers’ commitment by investing in the incentives and infrastructure needed to power our electric future.
‘Manufacturers are working hard to make zero and ultra-low emissions the norm and are committed to working with the government to accelerate the shift to net zero – but obstacles remain. Until these vehicles are as affordable to buy and as easy to own and operate as conventional cars, we risk the UK being in the slow lane, undermining industry investment and holding back progress.’
The UK government has already taken steps to support the emerging EV market. Purchase grants worth more than £1.7 billion have been paid out or budgets earmarked from 2011 to 2023, alongside £500 million committed to the Project Rapid motorway charging
Editor comment
Autovista Group Daily Brief editor Phil Curry recently spent two weeks testing an MG ZS EV to experience the differences of living with a BEV in the UK.
Switching from ICE to a BEV is a big step, and currently requires a lot of planning, not just from a financial aspect, but also logistically. Consumers will need to look at the range of a vehicle and work out how often they will need to charge it. This is easier for those who use their car purely for local journeys, but those covering long distances will need to factor in charging times and charge point availability.
Having lived with a BEV for two weeks, while the technology was good, the MG ZS EV having a range of 160 miles was enough for everyday use but needed planning for longer trips. With no access to a charging point at home and no opportunity to plug in to a domestic socket, I relied on local infrastructure. However, in my local area, there is only one rapid charger, and five slower units, two of which are not currently operational.
On a longer journey, I relied on the current UK motorway charging network. However, having driven as far as I dare, I came across a service station with faulty charge points. The only option was to travel into a nearby town and use the only charge point available, a slow 7Kw unit, that took almost three hours to provide enough charge to get me most of the way home, missing my appointment.
Therefore, I can appreciate the SMMT’s calls for charge point targets. The UK’s infrastructure is only going to improve, but the number of charging points, especially on-street locations, needs to increase quickly if the government is to make it easy to switch in time for the 2035 target. With the country’s housing mix including a large number of flats, and homes without off-street parking, there will be a lot of reliance on a public network. As seen in the SMMT survey, consumers do not have confidence in what is available at present.
Kia Motors Corporation (Kia) is expanding its partnerships with mobility companies to ‘meet the needs of a diverse range of customers worldwide.’ The move will mean increasing its fleet sizes, providing customised transport offerings and launching new rental capabilities. In July, Kia also announced the formation of Purple M, a startup focused on electric-vehicle (EV) mobility services.
From the outset of 2020, Kia has been revealing how it wants to change the way these platforms operate. In January, the carmaker announced ‘Plan S,’ its long-term strategy to shift focus away from internal combustion engine (ICE) vehicles towards EVs and other customised mobility solutions. This strategy includes establishing hubs in cities with strict environmental regulations, as well as developing services based on electric and autonomous vehicles in the long term.
‘Kia is striving to provide customised products and differentiated mobility services based on its long history in automotive manufacturing,’ Kia’s President and CEO Ho Sung Song said. ‘Kia will further enhance its collaboration with global partners to offer regionally customised mobility services as it implements its ‘Plan S’ strategy.’
Regional strategies
During a visit to the carmaker’s Sohari plant in South Korea, Song revealed the company’s plans to develop different regional approaches to its mobility partnerships. So, in South Korea, the carmaker will build on its ‘Kia Flex’ vehicle subscription programme by expanding the fleet to 200 vehicles. The line-up will include the new Carnival, which is nearing its launch date in the country, as well as a new EV model to be added in the future.
Meanwhile, in Europe, Kia will collaborate with its partners to provide customised offerings. In 2018, Kia worked with Spanish energy company, Repsol, to establish a car-sharing service called ‘WiBLE’. Currently operating with a fleet of 500 Niro plug-in electric hybrids (PHEVs), it allows customers to rent and return vehicles at designated locations on a ‘free-floating’ system. Kia plans to provide a multi-modal service in the future, which will offer multiple means of travel, like public transport and car-sharing.
Later this year, the manufacturer also intends to launch a dealer mobility service in Italy and Russia. This will enable dealers to rent out vehicles for any period, from a single day up to a full year. Kia hopes to gradually go global with the offering in future.
In the US, the company plans to accelerate the electrification of its fleet and enhance cooperation with its mobility partners. The carmaker provided 200 Niro EVs to Lyft last year and this year it supplied 44 Niro HEVs to MoceanLab, Hyundai Motor Group’s mobility service company.
In emerging markets, the South Korean manufacturer has partnered with companies like Ola, India’s largest ride-hailing company, Revv, an Indian car-sharing company, and Grab, Southeast Asia’s largest ride-hailing company. Through these partnerships, Kia hopes to better understand the needs of its customers in the development of future vehicles.
Purple M
Investing further in mobility solutions, Kia has also partnered up with CODE42.ai, a technology firm focused on the transition to autonomous Transportation-as-a-Service (TaaS). Together, they have launched a joint venture called Purple M.
This new company aims to establish a flexible e-mobility platform, as well as develop a sustainable EV ecosystem. While consumer interest in EVs is on the rise, mobility services are still driven primarily by ICE vehicles. Kia reasons that this leaves room for an e-mobility ‘first mover’.
‘With the newly established Purple M, Kia will be reborn as a leader for the era of e-mobility,’ said Song. ‘CODE42.ai is a leading Korean company in the field of future innovation technology, and is the best partner for successfully promoting a differentiated e-mobility service business.’
Purple M will use CODE42.ai’s Urban Mobility Operating System (UMOS), a cloud-based platform that integrates autonomous vehicles and air transportation services. This includes e-hailing, fleet management, demand-responsive shuttles and smart logistics.
‘Our goal is to accelerate the era of electric vehicles through Purple M,’ said Chang Song of CODE42.ai. ‘The integrated mobility and logistics platform UMOS will be central to building an e-mobility ecosystem encompassing everything from infrastructure to services.’
The two companies will use the new platform to establish further collaborative partnerships with specialist providers, hoping to develop a flexible e-mobility infrastructure. In particular, Purple M aims to help revitalise South Korea’s domestic mobility industry. It hopes to achieve this by cooperating with mobility market players while presenting new standards in what Kia calls ‘the post-coronavirus (COVID-19) era’.
COVID-19 complications
Currently, manufacturers are having to focus on EV production to keep in step with emissions regulations. But as the COVID-19 economic downturn means fewer people will have the money to buy expensive vehicles, traditional means of car ownership might be questioned by consumers.
This, arguably, is exactly what services like Purple M have been designed for – a chance to challenge the status quo of ownership. Why own an expensive EV when you can rent one as and when you need it?
On the other hand, there may be some reluctance to make use of these offerings straight away. As consumers seek to avoid public transport and contact with other people, shared-mobility services may suffer the same fate. Providers like Purple M will need to routinely disinfect shared vehicles in order to reassure customers.
What is more, as offices remain closed to prevent further spread, fewer people will need a vehicle to commute. More broadly, if lockdowns continue to be intermittently enforced, travel will take a nosedive across the board. Until a vaccine is created, there will continue to be less person-to-person interaction and, consequently, far fewer journeys.
So, in the short term, the mobility services offered by the likes of Kia might be facing an uphill battle. But in the long term, consumers may recognise the potential of breaking free from traditional forms of car ownership and only pay for a car when they have an immediate need for one.
It has been almost seven months since the first official coronavirus (COVID-19) case was reported in Europe. Since then, governments across the continent have put procedures in place that had never been seen before. Whole countries locked down, travel bans were implemented and entire industries stopped as countries raced to reduce their rates of infection.
The automotive industry was particularly hard hit by the outbreak and resulting lockdowns. Vehicle production stopped, and dealerships closed, bringing a halt to sales. Since these lockdowns have eased, it is starting to become clearer how markets are reacting.
Yet questions remain. Will incentive schemes across Europe present additional residual value (RV) risk? How severe an economic decline should we expect towards the end of 2021? Are there still hopes of a V-shaped recovery?
To provide further insight into how the automotive market is reacting in the wake of COVID-19 lockdowns, and the impact the economic turmoil is having, or could have, on RVs, Autovista Group is holding a webinar: COVID-19 residual value impact – where are we now?
The 45-minute session is taking place on 16 September at 11.00 CEST (10.00 BST) and will see a number of Autovista Group’s experts, representing markets across Europe, come together to discuss the current state of the automotive market and the effect on RVs. Topics to be discussed include:
‘With the COVID-19 threat still present around the world, it is essential for businesses to have up-to-date information to help them understand the current situation and navigate through whatever the future holds,’ commented Phil Curry, Autovista Group Daily Brief editor and chair of the webinar. ‘When economic problems strike, the automotive industry is often particularly affected, yet there is more of an opportunity for used-car sales during these times, so having the latest information on RVs and the outlook for markets across Europe is essential, especially in these unprecedented times.’
To register for the free Autovista Group Webinar: COVID-19 residual value impact – where are we now? click here and fill in your details.
In-car infotainment systems appear to be expanding endlessly across cockpits, becoming more technologically advanced as they go. Examples range from the Honda e’s dashboard-wide multimedia suite to Tesla’s titanic touchscreen-driven approach. While this is great news for gadget lovers, it does raise issues around driver concentration.
Andy Cutler, car editor of forecast values at Glass’s, the UK arm of Autovista Group, recognises the increasingly distracting nature of touchscreen technology. He argues that drivers now need to navigate a number of on-screen menus to adjust features like climate control, even though this can be far more distracting than simply locating a physical button. Any time the driver spends looking away from the road is dangerous, and touchscreens have the potential to elongate this hazardous period.
Reaction times
This position was supported by the findings of a study published by the UK’s Transport Research Laboratory back in March. It found that the latest in-vehicle infotainment systems can impair driving reaction times more than alcohol and cannabis use. Reaction times slow by 12% at the drink-drive limit, which then decreases to 21% with cannabis. While using a touchscreen display with Android Auto or Apple CarPlay however, reaction times were more than 50% slower.
During the study, many participants realised the system was distracting them and tried to compensate by slowing down, for example. However, their performance was still adversely affected, with drivers unable to maintain a constant distance with the vehicle in front, reacting more slowly to sudden occurrences and deviating from their lane.
Drivers who took their eyes off the road for as long as 16 seconds while driving and using touch controls resulted in reaction times that were worse than texting while driving (35% slower reaction time). Some also underestimated the amount of time they spent looking away from the road by as much as five seconds when engaged with these infotainment systems.
Tesla touchscreen trouble
A German court case has highlighted the turning tide against this technology. A ruling was passed down that Tesla’s touchscreen controls should be treated as a distracting electronic device. The judgement was made as part of a case concerning a collision where the driver had been trying to adjust the windscreen-wiper settings.
The defendant found himself facing a fine and a ban, under the same rules used to prosecute those found using a mobile phone behind the wheel.
In March this year, the Higher Regional Court in Karlsruhe, known as the Oberlandesgericht (OLG) in German, heard a case that stemmed from a collision almost a year previously, a legal blog revealed. A Tesla Model 3 driver had been out in the rain when the car’s automated wipers activated.
Their speed can be automatically adjusted by the car to compensate for the amount of rainfall. However, manually changing the intervals is done via the central touchscreen in the middle of the cockpit, rather than on a button or dial.
In this case, the Tesla driver had to navigate software menus to choose from one of five settings after touching an icon on the screen. The court said that due to the ‘resulting loss of vision from the traffic’, the driver left his lane and ended up in an embankment, colliding with a sign and several trees.
The ruling
Following the incident, the driver was initially handed a €200 fine and a one-month ban from driving by a local court. This penalty came into line with the rules surrounding the use of a mobile phone while driving, namely, ‘Improper Use of an Electronic Device in Accordance with Section 23 (1a) of the Road Traffic Regulations.’ But the driver argued that the wiper controls were a safety-related feature which he needed to access, and so appealed to the OLG.
However, the higher court denied the appeal, agreeing with the initial ruling. It found that ‘the touchscreen (permanently installed in the vehicle of the Tesla brand) is an electronic device in the sense of § 23 Para, it does not matter what purpose the driver pursues with the operation.’
‘The setting of the functions required to operate the motor vehicle via the touchscreen (here: setting the wiping interval of the windshield wiper) is therefore only permitted if the view is only briefly adjusted to the screen for road, traffic, visibility and weather conditions and at the same time a corresponding turn away from the traffic is connected.’
So according to this ruling, a fixed touchscreen is an electronic device, even if it is only being used to adjust the wiper speed. The Daily Brief did reached out to Tesla for comment about this verdict, but the company has yet to respond.
Alternative cockpit systems
So manufacturers might need to take stock of touchscreen alternatives. This could mean multifunction dials on the steering wheel or a voice-activated command system, capable of carrying out tasks quickly and effectively.
For example, Polestar’s Precept concept boasts a 15-inch screen with Google Assistant providing advanced speech technology. However, vital information is displayed on a separate nine-inch horizontal display that utilises eye-tracking technology, allowing on-screen adjustments based on where the driver is looking.
The GLA is a well-established name for Mercedes-Benz, and the second-generation model (H247) has a more defined SUV shape than its predecessor. The new car is taller, slightly broader, and has a longer wheelbase, providing a more SUV-like entry and seating position as well as very good headroom and improved interior space.
The model has not grown in length overall but is still the longest of its premium competitors and is more easily differentiated from the A-Class. Its design is also strong enough to differentiate it from the GLB.
The new GLA has adopted the technologies introduced in the latest A-Class and, as a result, is the newest and most up-to-date crossover in the segment. Compared to its direct competitors, the GLA’s fuel consumption is rather low, with similar figures to less powerful engines offered on competitor models, and a petrol plug-in hybrid (PHEV) drivetrain has been added. However, the petrol and diesel engines are currently only offered with automatic transmission and so entry prices are comparatively high.
Click here or on the image below to read Autovista Group’s benchmarking of the Mercedes-Benz GLA in France, Germany, Italy, Spain and the UK.
We present new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.
The latest data from the respective associations in the major continental European markets reveal that the volume of used-car transactions grew in July 2020 compared to the same month last year. Autovista Group senior data journalist Neil King considers this return to growth across Europe’s used-car markets as the sector tentatively recovers from the coronavirus (COVID-19) crisis.
Used-car sales increased by 13% year-on-year in both France and Germany in July, and were up 9% in Italy and 6% in Spain. Through to July, Germany is the only major European used-car market that has not suffered a double-digit decline, with a comparatively modest contraction of 8%.
Used-car data is not yet available for the UK for July but is expected to follow the growth trend, especially given the 11% surge in new-car registrations in the country’s first full month of trading since February. This is even without increased buying incentives, which have been introduced in France, Germany, Italy and Spain.
Used-car transactions, year-on-year percentage change, July and year-to-date 2020
Sources: CCFA, KBA, ANFIA, GANVAM/IEA
Outperforming new-car registrations
Prior to the positive results last month, the volume of used-car transactions declined in the first half of 2020 compared to H1 2019 in all five major European markets. However, the downturns in the first half of 2020 were not as dramatic as the contractions in new-car registrations.
Used-car transactions and new-car registrations, year-on-year percentage change, H1 2020
Sources: CCFA, KBA, ANFIA, ANFAC, GANVAM/IEA, SMMT
In the UK, the used-car market contracted by 28.7% in the first half of 2020, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT) on 11 August. Following a comparatively modest decline of 8.3% in the first quarter of 2020 as the COVID-19 lockdown from March negated growth in January and February, there were only 1,039,303 changes of ownership in the second quarter, equating to a 48.9% slump in the second quarter. However, ‘the pace of decline eased as the quarter progressed, from a peak year-on-year loss of 74.2% in April to 17.5% in June, as private sellers and buyers got back on the move and transactions began to restart,’ the SMMT stated.
‘As devastating as these figures are, with full lockdown measures in place for the whole of April and May, they are not surprising. As the UK starts to get back on the move again and dealerships continue to re-open, we expect to see more activity return to the market, particularly as many people see cars as a safe and reliable way to travel during the pandemic. However, if we’re to re-energise sales and the fleet renewal needed to drive environmental gains, support will be needed for the broader economy in order to bolster business and consumer confidence,’ commented Mike Hawes, SMMT chief executive.
Continental transactions
There were similar contractions of the used-car market in Spain and Italy. Spain suffered the most, with 31.7% fewer changes of ownership in the first half of 2020 than a year earlier, but new-car registrations declined by more than 50%. There was a phased approach to relaxing the lockdown measures in Spain, which largely explains why both the new- and used-car markets were still weak, even in June. However, dealers can now fully reopen, and the introduction of the MOVES II incentive scheme for new battery-electric vehicles (BEVs) and plug-in electric hybrids (PHEVs) and the RENOVE scrappage scheme have stimulated the Spanish market since their introduction in early July.
Used-car demand fell 31.6% year-on-year in Italy in the first half of 2020, compared to a 46.1% contraction of the new-car market. However, many buyers of both new and used cars decided to hold off until government incentives came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). This new scheme comes on top of the Ecobonus scheme, which incentivises cars producing less than 20g of CO2/km.
Electric and hybrid cars can now benefit from up to €10,000 in subsidies when scrapping an older vehicle. €3,500 is now provided for scrapping vehicles that are at least 10 years old when buying a new Euro 6 vehicle with CO2 emissions up to 110g/km, and a price of up to €40,000. Dealers will put forward €2,000 towards the incentive, while the state provides €1,500. Without trading in an older model, the funds drop to €1,750.
In France, the 17.4% decline in used-car sales in the first half of 2020 was a significantly better performance than the 38.6% fall in new-car registrations. Whereas the incentives introduced on 1 June for new BEVs and PHEVs remain, the additional bonus for trading in older cars for cleaner new and used cars was exhausted before the end of July. The scrappage scheme reached its 200,000-vehicle cap after just two months, but the Ministry of Ecological Transition announced it would be replacing the recovery scheme with a conversion bonus, applicable from 3 August.
Germany has weathered the COVID-19 storm better than the other major European markets, with only 11.4% fewer changes of ownership in the first half of 2020 compared to the same period last year. New-car registrations have also suffered less than in the other major markets, but were still down 34.5% in the first half, and have therefore been outperformed by used-car demand here too.
Residual-value resilience
As used-car markets have proven more resilient than new-car markets, the impact on residual values (RVs) has been rather marginal in European markets so far this year. Nevertheless, a ‘three-speed’ development of residual values (RVs) is emerging. The UK and France are benefitting from pent-up demand and some markets have had a rapid reaction to the impact of COVID-19, but most are ‘late starters’ with limited value movements thus far.
Source: Autovista Group – Residual Value Intelligence Coronavirus Tracker
As COVID-19 lockdowns are left behind, thoughts turn to economic recovery. However, as the latest update to the Autovista Group whitepaper ‘How will COVID-19 shape used car markets’ explains, in the last month, the situation has taken a gloomier turn. Download your copy here.
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