UK edges Germany to top Europe BEV market in 2024

: Battery materials
25/01/07

Sales of battery electric vehicles (BEVs) in the UK last year climbed by 21pc to 381,000 units, according to the Society of Motor Manufacturers and Traders (SMMT), as the country overtook Germany to become the largest BEV market in Europe.

Sales in the UK climbed furthest towards the end of the year, driven by strong corporate subsidies (see graph). Sales in Germany slumped by 27pc to 380,609 units, as consumers continued to feel the loss of a €4,500 purchasing subsidy in December 2023.

Sales in France last year edged down by 2pc, and the halving of EV buyers' subsidies announced in November because of budget constraints is expected to weigh on sales further. France is Europe's third-largest market (see graph).

UK market stays open to China-made EVs

One reason for the UK's surge in BEV sales, after corporate incentives, is trade policy. The UK is one of the few established BEV markets without surplus tariffs on China-made BEVs, beyond unilateral 2.5pc duties agreed by member states of the World Trade Organisation (see graph). Japan, another unrestricted market, recorded just 4,531 units in November compared with 38,531 sales in the UK.

Sales of China-branded BEVs in western Europe have jumped to over 3pc of overall car sales in recent years, a sharp rise but still insignificant as a market share (see graph). But Chinese carmakers accounted for over a half of BEV sales in Europe — 51pc in January-September last year, up from 46pc a year earlier — according to market research firm JATO Dynamics.

UK corporate sales continue to prop up BEV sales

UK private sales to individuals accounted for just 1 in 10 BEV sales last month — of which there were 44,312 — according to SMMT chief executive Mike Hawes.

The remainder — around 89pc — were corporate car sales, much higher than the corporate sector's share of 68.5pc in the overall car sales market. This has risen sharply in recent years, from 57pc and 49pc in 2023 and 2022, respectively.

"At first glance, the apparent drop in demand from private buyers for electric cars may seem concerning. However, it reflects a fundamental shift in how we finance vehicles," Tom Barnard, analyst at Electrifying.com, said. "It's important to note that the sales figures from 2024 exclude private buyers who have benefited from the excellent deals on EVs available through salary sacrifice or personal lease schemes, as these are recorded as fleet registrations."

"Too many PCPs [personal contract purchases], contract hire, finance and motability purchases are recorded as fleet sales when they're being driven by private buyers," Quentin Wilson, founder of EV campaign group FairCharge, said. "We need to change the way these EV registrations are recorded, and fast."

By Chris Welch

UK BEV sales 2022-24

Europe's three largest BEV markets by sales

Tariffs on Chinese-made EVs of selected EV markets

West European new passenger car market share pc

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24/12/30

Viewpoint: Policy uncertainty dogs battery anode plans

Washington, 30 December (Argus) — Former president Donald Trump's re-election is sparking uncertainty in the US' synthetic graphite battery sector, with companies worried about a possible halt to government finance and a weaker outlook for domestic demand. "With Trump being elected president, everything's up in the air," one industry source said. Battery materials companies expecting to receive government funding to build plants in the US could see their prospects dim with Trump coming into office , since these companies need the federal grants to compete with China, a second source said. Trump on the campaign trail said he would rescind all unspent funds in President Joe Biden's Inflation Reduction Act (IRA) and scrap Environmental Protection Agency tailpipe standards, which he called an electric vehicle (EV) "mandate". The Biden administration is racing to try and secure projects set to be funded by the IRA. On 16 December, US battery materials producer Novonix received a conditional loan for up to $754mn for a new synthetic graphite plant from the US Department of Energy (DOE). If finalised, the loan would be used to build a new 31,500 t/yr synthetic graphite plant in Tennessee by the end of 2028. DOE previously awarded Novonix a $100mn grant and a $103mn tax credit to expand capacity at its Tennessee plant to 40,000 t/yr by 2025 and 150,000 t/yr by 2030. DOE on 16 December also closed on its up to $9.6bn loan to South Korean battery manufacturer SK On for the construction of three battery plants in the US, the largest loan ever awarded under its Advanced Technology Vehicles Manufacturing Program. DOE also in September selected SKI US , part of India-based Birla Carbon, to receive $150mn build a 25,000 t/yr synthetic graphite production plant in South Carolina. Some in Trump's orbit have warned they will review contracts they view as hastily pushed out before the former president takes office . But some Republicans are likely to oppose full repeal of the IRA, since the bill funds projects in their districts. And Republicans will hold a razor-thin majority in the House of Representatives. Even if Republicans do not repeal the IRA or other EV subsidies like tax credits, the uncertainty surrounding the new administration's support could be a stumbling block. "Who's going to put half a billion dollars into a battery plant right now when you don't have certainty on the push for EVs?" the first source said. Battery projects require huge amounts of investment. Swedish battery maker Northvolt obtained record venture capital investment for a European start-up at $15bn. But on 21 November, the company filed for Chapter 11 bankruptcy protection in the US , in part because of difficulties "bridging financing between different stakeholders", outgoing chief executive Peter Carlsson said. The company had already closed down its R&D facility in the US and put plans for factories in Canada, Germany and Sweden on hold. Its financial woes intensified after the Swedish government declined to invest. Other European governments have already reduced financial support for EVs, more for spending reasons than policy, which has softened demand in the region. France recently changed eligibility requirements for subsidies , and Germany ended its subsidy late last year. Some companies, like Norwegian battery materials company Vianode, have been planning multi-billion dollar investment programmes to expand their reach in the automotive industry throughout North America and Europe. It is not clear if Trump's election will have an effect on these plans. Vianode opened its first anode graphite production plant, Via One, in Herøya, Norway, in October. The plant will have a capacity of 2,000 t/yr, enough to supply 30,000 EVs annually, according to Vianode. Chinese firms have scaled up production of key battery materials at all stages of the supply chain, creating more competition for European and US producers. Chinese producers dominate the global EV market with about 70pc of market share, even as the EU and US have put policies in place to try to support their domestic industry. China's lithium-ion battery exports to the US jumped in November as suppliers looked to get ahead of potential new tariffs. The Trump administration is likely to increase tariffs on Chinese lithium-ion batteries to as much as 60pc in the coming few months after Biden earlier this year lifted them to 25pc from 7.5pc. This could help support US-based battery plants. But tariffs on Chinese goods could also present additional challenges, as the raw materials for synthetic graphite often have some Chinese components. Needle coke, traditionally the main raw material for synthetic graphite used in battery anodes, is not widely produced outside of China. And while companies in China have been researching options for using a wider range of petroleum coke qualities , specifications are still relatively narrow, with battery companies in China absorbing most of the world's suitable coke . One graphite anode plant in Europe has been struggling to procure petroleum coke, according to a market participant. Sourcing coke for synthetic graphite in Europe and other ex-China locations is likely challenging, as most of these refineries and calciners have tied up their supply in long-term commitments, one producer said. Refineries are also reducing coke production, as the required feedstocks have become more costly. By Lauren Masterson and Hadley Medlock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Singapore extends electric vehicle incentive to 2027

24/12/30

Singapore extends electric vehicle incentive to 2027

Singapore, 30 December (Argus) — Singapore has extended the incentive for electric light commercial vehicles under its Commercial Vehicle Emissions Scheme (CVES) to 31 March 2027 from 1 April 2025. Incentives for more pollutive vehicles will also be scrapped or their surcharges raised, under the CVES. This is part of efforts to push for the adoption of cleaner commercial vehicles. The country's CVES categorises vehicles based on their "worst-performing pollutant". The S$15,000 ($11,060) CVES incentive for Band A, which includes mainly electric vehicles, has been kept unchanged at S$15,000, according to a joint statement by the city state's Land Transport Authority (LTA) and National Environment Agency (NEA). The S$5,000 incentive for Band B, which includes mainly petrol vehicles, will be scrapped, while the surcharge for Band C, which includes mainly diesel vehicles, will be raised from S$15,000 to S$20,000. "These changes are in line with the government's vision to have all vehicles run on cleaner energy by 2040," the LTA and NEA said in their joint statement on 30 December. Singapore will be halting new registrations for diesel cars and taxis from 2025, it said in July. Existing diesel cars will also be subject to higher road taxes. The country's Early Turnover Scheme (ETS) for heavy commercial vehicles, which promotes the replacement of older, more pollutive diesel commercial vehicles and buses by providing a discount when switching to cleaner-energy vehicles, will be extended to 31 December 2025. There were 11,941 battery electric cars in Singapore as of end-2023, which constituted just 1.8pc of its 2023 car population of around 651,300 units. The figure for petrol-electric hybrid cars, excluding plug-in vehicles, was much higher at 79,256 as of the end of 2023. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

UK govt consults on shift to zero emission vehicles

24/12/27

UK govt consults on shift to zero emission vehicles

London, 27 December (Argus) — The UK government this week opened a consultation on moving to zero emission vehicles (ZEVs), seeking views from the industry on how to deliver a 2030 end date for sales of new gasoline and diesel-fuelled cars. The consultation "is focused on how, not if, we reach the 2030 target", and is largely technical in scope, the government said. "All new cars and vans will need to be 100pc zero emission by 2035. And no new petrol or diesel cars will be sold after 2030," it added. The consultation seeks views "on the treatment of new cars and vans from 2030 that are not required to be zero emission under the current ZEV mandate targets", the government said. It has invited industry responses on a technological definition, which would set out which cars are permitted by how the vehicle is powered. The consultation also seeks views on measures to support demand for ZEVs. The country's ZEV mandate came into force in January . Manufacturers will be required to produce a certain percentage of zero emission new cars and vans — 22pc in 2024 and rising by 5-6 percentage points over each of the following three years to 38pc in 2027. The target will then rise more rapidly to 2030, to hit 80pc for new cars and 70pc for new vans in England, Wales and Scotland. The government, which took power in July, committed in its manifesto to restore the 2030 phase-out date for sales of new gasoline and diesel-fuelled cars. The UK government in November 2020, under former prime minister Boris Johnson, announced that sales of new gasoline and diesel-fuelled cars would end by 2030. But this was then pushed back to 2035 by then-prime minister Rishi Sunak in September 2023. The auto sector expressed concern at the pushback. But the current government reiterated its commitment to policy clarity. "Vehicle manufacturers representing 67pc of the UK's new car market have already committed to being fully zero emission by 2030", the government said. UK automotive trade association SMMT welcomed the consultation. "It is imperative we get an urgent resolution, with a clear intent to adapt the regulation to support delivery, backed by bold incentives to stimulate demand", it said. The UK has a legally binding target of net zero greenhouse gas (GHG) emissions by 2050. The country halved its emissions between 1990 and 2022, but much of this reduction was from closing down coal-fired power. Domestic transport has been the UK's largest emitting sector for several years, and accounted for 28pc of GHGs in 2022. The consultation closes on 18 February. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan carmakers Honda, Nissan start formal merger talks

24/12/23

Japan carmakers Honda, Nissan start formal merger talks

Tokyo, 23 December (Argus) — Japanese automakers Honda and Nissan said today they have officially started merger talks and are aiming to close a deal by June 2025. Fellow Japanese carmaker Mitsubishi is also considering joining the transaction. Honda and Nissan have signed an initial agreement to discuss a merger, including by setting up a joint holding company under which the current brands would operate as subsidiaries. Honda will appoint a majority of the holding company's board members including its president or representative director, Honda's president Toshihiro Mibe said on 23 December. Mitsubishi will make a final decision on whether to participate in the negotiations before the end of January 2025. A Honda representative told Argus on 18 December that the firm was exploring a possible merger with Nissan. Collaboration on the electrification of automobiles is one of the major reasons for the merger, according to Honda and Nissan. The firms agreed a strategic partnership in March to work together on electrification, studying possible areas of co-operation in developing automotive software platforms, core components relating to electric vehicles (EVs) and complementary products. Honda aims to electrify all its new cars by 2040 and is investing ¥10 trillion ($64bn) by 2030 partly to reduce battery costs, which account for around 30-40pc of the total cost of producing EVs, Mibe said in May. Honda's combined sales of EVs and fuel cell EVs (FCEVs) more than doubled to around 42,000 units in 2023, according to the company. But this only accounts for around 1pc of its total sales. Further investments on electrification by a single manufacturer are not feasible, Mibe said on 23 December. Nissan produced 3.4mn vehicles in 2023. It does not provide a precise breakdown for global EV sales, although it said in August 2023 that such sales had surpassed 1mn units since its first delivery in 2010. This is dwarfed by foreign EV competitors, including Chinese producer BYD and US manufacturer Tesla, whose sales exceeded 3mn and 1.8mn units respectively in 2023 alone. The merger is also designed to optimise facilities owned by Honda and Nissan, Mibe said. But he denied that it would lead to a reduction in production capacity or asset cuts. The companies instead aim to expand output, Mibe added, although he did not disclose a detailed plan. Nissan is struggling to make a profit, partly because of weak EV demand. The company's net profit slumped by 94pc on the year to ¥19.2bn in April-September, prompting it to cut global production capacity, including for EVs, by 20pc to around 4mn units/yr. Nissan's financial struggles will not affect its collaboration with Honda, but it needs to accelerate its financial recovery, Nissan chief executive Makoto Uchida said on 7 November. But Mibe suggested on 23 December that Nissan's financial situation could cause the proposed merger to be scrapped. Japan's trade and industry ministry (Meti) has yet to make any official comment on the merger talks. But Meti minister Yoji Muto said on 20 December that restructuring the industry would generally help increase the value of private entity and promote innovation. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Europe’s EV future rests on Chinese FDI

24/12/19

Viewpoint: Europe’s EV future rests on Chinese FDI

London, 19 December (Argus) — The troubled buildout of Europe's EV supply chain, illustrated by the fall of Northvolt last month, suggests that the future now depends on foreign direct investment (FDI) — particularly from China. While EV sales in China rose by 46pc last month , they edged down by 2.48pc in Europe, and an increasing share is made up of Chinese-branded battery EVs , as western carmakers struggle to offer affordable models. China is now forecast to majority-own 300GWh of Europe's 1.3TWh battery capacity by 2030 ( see graph ). A shortage of skilled labour, fierce competition weighing on prices for feedstock materials and limited state investment — just some of the problems that befell Northvolt — suggest that Chinese FDI might need to increase further for Europe to expand its EV fleets. First, FDI into Europe that localises production of EVs that will eventually be sold to European consumers offers jobs to workers and affords Europe a portion of the value added. It offers a chance for technological ‘spillovers' — expertise on how to build and operate Chinese battery machinery in exchange for access to the largest EV market after China. Europe could also attract Chinese FDI under 50:50 joint ventures (JVs) between Chinese battery makers and domestic carmakers — such as CATL and Stellantis — in order to retain some equity and ensure an integration of local and foreign talent. It is how China developed its own internal combustion engine (Ice) industry, signing JVs with Volkswagen in 1984, Stellantis in 1992, General Motors in 1997 and Toyota in 2000, among others. It is also not clear to what extent China is comfortable with spillovers in exchange for market access. One criticism is that Chinese FDI might focus on EV assembly, although data from consultancy Rhodium Group show not only China's FDI into battery plants but that this has provided anchoring for FDI upstream into cathode and anode plants in Hungary, Sweden and Finland. Asian firms tend to hire talent from their home countries for senior positions without "skills trickling down to the local population", according to clean energy researcher Transport & Environment. Chinese firms could continue to make batteries in China, withholding the expertise that eluded Northvolt, before shipping parts for assembly in Europe. One condition could require a portion of FDI allocated to R&D, involving universities or local think-tanks. "R&D activities are usually not typical features of (Chinese) investments in the V4 [Visegrad] region, as investors usually bring only assembly," economist Agnes Szunomar said in a report on Chinese investments into the V4 in January, although Volvo and Nio have made plans in eastern Europe, Szunomar added. As it has increased, Chinese FDI — both state and private — has also shifted almost entirely away from mergers and acquisitions towards ‘greenfield' investments ( see graph ), i.e. businesses from scratch, suggesting a growing skills imbalance between the regions. European policy must change Europe is not the only target for Chinese EV-related FDI, and might have to increase its incentives if it is to build out homegrown industry. In a "carrot and stick" approach, endorsed by InoBat chairman Andy Palmer, the efficacy of the EU's much-deliberated tariffs as a ‘stick' appears uncertain so far. Analysis from Rhodium Group suggests that the EU's tariffs have disproportionately penalised western-branded EVs made in China and sold in Europe. They have also been too weak to entirely force China's EV production into Europe and yet strong enough to raise investor uncertainty, which could include further hikes on EVs or new tariffs on battery materials, for instance, which would scupper China's plans for FDI in battery assembly. Out of 11 EV plants that China is reported to have considered, just three in Europe have been confirmed ( see graph ) — the lowest share globally of China's investments. Meanwhile, tax breaks, grants and interest-free loans might fulfil the ‘carrot' in the EU's approach, as Hungary has illustrated, with state support for multiple projects, ranging from €2.4mn to €900mn for CATL's $7.3bn battery plant announced in August 2022 — set to create 9,000 jobs — and consequently 61pc of Chinese FDI into Europe last year, according to analysis from Rhodium Group ( see graph ). By Chris Welch Europe gigafactory forecast 2030 GWh Overall Chinese FDI into Europe, by conduit $bn Status of Chinese EV plants by region since 2022 Newly announced Chinese EV-related FDI by host region $bn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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