#Financing

Electric vs. diesel cars sales in Europe

dec 11, 2020 - 4 min read
Kris Turner, Global VP Business Development, Sopra Finance Platform at Sopra Banking Software

It is a thought-provoking statistic that the total number of new electric vehicles (EVs) registered in September – including pure electric, plug-in hybrids, full hybrids and mild hybrids – was higher than the number of registrations for diesel cars. Just five years ago, diesel cars were a dominant player in Europe.

In reality, it required full electric cars, petrol-electric plug-in hybrids, “self-charging” hybrids and mild hybrids to overcome the diesel figure. However, it was the first time that’s happened, and that in itself is noteworthy.

The volume of EVs increased by 139 percent to 327,800 units – a record in terms of both volume and market share. Battery Electric Vehicles (BEVs), Plug-in Hybrid Electric Vehicles (PHEVs) and Hybrid Electric Vehicle (HEVs) registered across Europe accounted for one in four units delivered.

Nor was this increase in EVs achieved in a shrinking market. The European Automobile Manufacturers Association (ACEA) reported a 3.1 percent rise in sales in September, while business intelligence experts JATO reported an increase of a 1.2 percent. Whichever way you look at it, there can be no question that the tide towards EVs has undoubtedly turned.

What is evident is that there is real momentum in the EV market. Honda announced recently that it planned to end sales of diesel-powered models in the UK to concentrate on petrol and electric cars. And it isn’t alone. New EV models are emerging at a rate of knots: Ford, BMW and Fiat have all announced new EV models in recent months, and there are plenty more coming.

That many people want to switch to an EV is evident, but there remain concerns: The modest re-charging infrastructure, range anxiety and the relatively high prices for EVs when compared to combustion engine cars, to name a few. Then there is the impact of Covid-19 on confidence, employment and the economy across Europe. Reported car sales growth after the initial lock-down was mostly in used cars (and often older, cheaper used cars at that). It was a trend helped by a switch from public to private transport. However, this shift was made usually on a “budget” basis.

Looking at Autorola’s latest assessment of the used car market across Europe, there is some fascinating data. EVs and hybrids sales volumes continued to increase significantly in September. BEVs and hybrids saw sales rise by 123 percent and 104 percent year-on-year respectively. However, stock turn of environmental cars was noted as being “well below the market norm.” Stock turn was noted as 4.4x for BEVs and 5.4x for hybrids. Both were well below that of petrol engine and diesel cars (7.3x and 7.9x, respectively). Overall, the numbers saw petrol sales up 37 percent and diesel sales up 35 percent.

With the economic outlook looking challenging, it’s likely that we will see EV sales grow, and that there will continue to be a robust market and demand for used diesel cars. It seems likely that the switch from combustion engines to EVs will be a controlled one as supply and demand transition. In short, a collapse in diesel values seems unlikely, simply because the pipeline of used diesel cars is diminishing as new car purchasing switches to EVs, and because quite simply, they are the cars many people can afford.