|August 25, 2020|
Electric car sales surge amid pandemic
|When it comes to clean cars, Europe is heading for a two-speed market.|
The pandemic has led to a collapse in sales of diesel and gasoline cars, but electric vehicles have popped --- something that's especially evident in the wealthier western half of the Continent. Now, the European Commission is trying to figure out a way to make sure the rich don't leave the poor in the dust on clean mobility.
One idea discussed by Commission officials could see the EU match any national e-car purchase premium programs as part of the coronavirus rescue effort, according to an EU official and a representative from the car industry. As capitals prepare to submit plans to access the €750 billion EU recovery fund, that could encourage those with low e-car penetration rates to set up stimulus programs.
"The car industry will benefit from the ambitious recovery instrument of €750 billion ... while remaining eligible for financial aid under several programs within the revised Multiannual Financial Framework proposal," a Commission official said on condition of anonymity, referring to the bloc's seven-year budget program.
In the first half of the year, car sales plunged by 38 percent, according to ACEA, the European car lobby. But electric cars are bucking the trend, accounting for 8 percent of sales in the first six months of 2020 --- double last year's rate.
The problem is that those sales are heavily skewed. In the first three months of this year, 98 percent of all battery electric vehicle sales across Europe were in the richer 14 EU countries, plus non-bloc members such as the U.K. and Norway.
The growth in electric car sales is not because the coronavirus has made car buyers greener. Rather, it's that government coronavirus rescue programs in big countries including Germany and France have included special provisions to make electric car sales especially attractive --- part of countries' efforts to get behind the EU's Green Deal project, which aims to make the bloc climate-neutral by 2050.
E-market shares hit 26 percent in Sweden and 9 percent in both Germany and France in June. By contrast, Italy and Spain saw clean car shares of just 3 percent, and Poland a paltry 1 percent, according to figures compiled by the International Council on Clean Transportation.
"The south remains a problem," said a car industry executive. "No buying power, high unemployment, no growth."
Shrinking the EV gap
The industry wants the Commission to help countries do a better job of designing national incentive programs --- something that might help shrink the gap between the west and the rest.
"The problem often lies not in the absence of support schemes, but in their bad design," said Julia Poliscanova with Transport & Environment, an NGO. "Poland is a good example, where most new cars just like in the rest of Europe are bought by companies, not individuals."
Poland's decision to exclude fleet sales from its electric car subsidy program is a drag on progress, she said. "The next big wave of sales will come from fleets."
ACEA said that 26 of the 27 EU countries have incentives in place to encourage people to buy e-cars.
"As long as plugins available in higher disposable income markets come with large subsidies attached --- be it fiscal or purchase subsidies --- we are going to be looking at a two-speed region," said Matthias Schmidt, an analyst tracking the deployment of electric cars.
Carmakers have also concentrated their e-car sales efforts in the wealthier part of the Continent because that's where buyers have more cash, and charging infrastructure is more developed. Those sales will help them meet next year's EU-mandated CO2 limits for each carmaker's fleet.
But they're going to have to shift focus to other parts of the EU as CO2 checks in 2025 and 2030 will give more weight to sales in markets with a lower EV penetration, making it more attractive to sell electric cars in places like Poland and Romania.
Europe's undisputed leader in e-mobility is Norway, and it could serve as an example in other rich countries.
"If Norway can do it then anyone can do it, especially, mild, heavily populated countries like Belgium and the Netherlands," Norway's 33-year-old climate and environment minister, Sveinung Rotevatn,said.
The answer isn't just about subsidizing the purchase of e-cars, but also offering reductions in parking and tolling fees that make owning such a car even cheaper to run, Rotevatn said.
But Norway is one of the world's richest countries thanks to its oil and gas revenues; poorer countries would need to raise taxes to counteract losses from waiving road taxes on electric cars, as well as any fall in revenues from taxes on diesel and gasoline.
"Norway is a quite special case, for example due to the fact that taxes on vehicle purchase and ownership are significantly higher than in most other countries and that the country was willing to accept a shortfall in revenues when introducing a tax break for electric vehicles," said Peter Mock, a researcher at the International Council on Clean Transportation.