EVs Made Up 10% of All New Cars Sold Last Year
China, Europe drive electric-vehicle expansion as U.S. gains traction
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BERLIN—Electric-vehicle sales crossed a key milestone last year, achieving around 10% market share for the first time, driven mainly by strong growth in China and Europe, according to fresh data and estimates.
While EVs still make up a fraction of car sales in the U.S., their share of the total market is becoming substantial in Europe and China, and they are increasingly influencing the fortunes of the car market there as the technology goes mainstream. The surge in EV sales also contrasted with the broader car market that suffered from economic worries, inflation and production disruptions.
Global sales of fully electric vehicles totalled around 7.8 million units, an increase of as much as 68% from the previous year, according to preliminary research from LMC Automotive and EV-Volumes.com, research groups that track automotive sales.
Ralf Brandstätter, the head of Volkswagen AG’s China business, told reporters on Friday that electric vehicles would continue expanding fast and that China could soon reach a point where sales of conventional vehicles begin to permanently decline as plug-in vehicles take bigger market share.
“Last year, every fourth vehicle we sold in China was a plug-in, and this year it will be every third auto,” Mr. Brandstätter said. “We haven’t reached the tipping point yet, but we’re expecting to get there between 2025 and 2030.”
For the full year, fully electric vehicles accounted for 11% of total car sales in Europe and 19% in China, according to LMC Automotive. Combined with plug-in hybrid vehicles, which can be plugged in to recharge the battery but also have a small combustion engine, the share of electric vehicles sold in Europe rose to 20.3% of the total last year, according to EV-Volumes.com.
The U.S. lags behind China and Europe in the rollout of EVs, but last year auto makers sold 807,180 fully electric vehicles in the U.S., a rise in the share of all-electric vehicles to 5.8% of all vehicles sold from 3.2% the year before. Tesla is still the world’s dominant EV maker, but conventional auto makers are shortening its lead with new electric-model launches.
In Germany, the largest auto market in Europe, electric vehicles accounted for 25% of new vehicle production last year, according to VDA, the German automotive manufacturers association. In December, there were more EVs sold in the country than conventional cars.
New-car sales overall fell around 1% to 80.6 million vehicles, according to the LMC data, with nearly 4% growth in China helping to offset a decline of 8% in the U.S. and 7% in Europe, which was hit by the weakening global economy, soaring energy costs, supply-chain disruptions and the war in Ukraine.
Bayerische Motoren Werke AG, the German luxury-car maker, was one of many manufacturers last year to see sales of plug-in models rise even as overall sales tumbled. BMW reported a 5% decline in total new-car sales but saw EV sales more than double last year.
“We are confident that we can repeat this success next year, because we have a continued high order backlog for fully electric models,” BMW sales chief Pieter Nota, said this month, commenting on the growth in sales of electric models.
VW, Europe’s biggest manufacturer by sales, said on Thursday that overall new-car sales fell 7% to 8.3 million vehicles last year, but sales of electric vehicles rose 26% to 572,100 units. The sales figures encompass the company’s large stable of brands, including VW, sports-car maker Porsche, luxury-car brand Audi and passenger-car brands Skoda and Seat.
The bulk of VW’s sales of EVs were in Europe, but sales growth was strongest in China and the U.S., the company said.
Other manufacturers reported a similar divide of strong growth in sales of electric cars—boosted in part by the availability of a wider array of models in addition to market leader Tesla Inc.—and weak or declining sales of conventional vehicles. Ford Motor Co., Mercedes-Benz Group AG and BMW each said their EV sales more than doubled in 2022, while their total vehicle sales declined.
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European auto makers have focused their EV production and sales on home markets as they try to meet European Union emissions regulations. They also began last year to more aggressively expand their EV business in other major markets, especially China and the U.S.
In China, which accounted for around two-thirds of global sales of fully electric cars last year, domestic manufacturers are gaining ground on traditional Western auto makers and are also beginning to expand into Europe and the U.S.
Worldwide, Tesla maintained the top spot in a global ranking of manufacturers by sales of all-electric vehicles, followed by Chinese manufacturers BYD Co. and SAIC Motor Corp., and brands belonging to the VW group, according to a study published by Stefan Bratzel, director of the Center of Automotive Management, an automotive-research group in Germany.
In the U.S., Ford is the second-largest maker of EVs by sales, followed by Hyundai Motor Co. and its affiliate Kia Corp. Meanwhile, General Motors Co., VW and Nissan Motor Co. lost EV market share in the U.S. last year.
While EVs are showing signs of becoming more mainstream globally, analysts warn that repeating last year’s strong EV performance in 2023 could be difficult as economic worries weigh on consumers, and cash rebates on EVs are reduced or scrapped completely in some countries. Rising electricity prices in Europe in the wake of Russia’s attack on Ukraine have also diminished the appeal of EVs compared with gas-powered cars.
Germany witnessed a surge in last-minute EV purchases in December, as consumers rushed to take advantage of government incentives before they were cut this year. Since Jan. 1, government subsidies for the purchase of an EV with a listing price of up to 40,000 euros, equivalent to about $43,000, fell to 4,500 euros from 6,000 euros previously.
For the past couple of years, auto makers, especially in Europe, have struggled to find key components such as computer chips to maintain production in pace with demand. This mismatch between demand and supply is one reason auto makers posted lofty profits last year despite broadly weaker sales.
As the economy weakens, supply-chain problems ease and subsidies dry up, manufacturers could find it harder to maintain the high prices for new cars as they chase potentially fewer buying customers. This could result in a downward price spiral that potentially hits profits.
“Demand is likely to weaken in the coming year,” said Peter Fuss, an auto analyst with Ernst & Young. “The weak economy will cause retail and business consumers to be more reluctant. And it is possible that supply will outpace demand and we will begin to see discounts again.”
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The marketplace has spoken and, at least for now, it’s showing preference for hybrids and plug-in hybrids (PHEVs) over battery electrics. That makes Toyota’s foot dragging on EVs (and full speed ahead on hybrids) look fairly wise, though the timeline along a bumpy road still gets us to full electrification by 2035.
Italian supercar producer Lamborghini, in business since 1963, is also proceeding, incrementally, toward battery power. In an interview, Federico Foschini , Lamborghini’s chief global marketing and sales officer, talked about the new Urus SE plug-in hybrid the company showed at its lounge in New York on Monday.
Lamborghini
The Urus SE SUV will sell for US$258,000 in the U.S. (the company’s biggest market) when it goes on sale internationally in the first quarter of 2025, Foschini says.
“We’re using the contribution from the electric motor and battery to not only lower emissions but also to boost performance,” he says. “Next year, all three of our models [the others are the Revuelto, a PHEV from launch, and the continuation of the Huracán] will be available as PHEVs.”
The Euro-spec Urus SE will have a stated 37 miles of electric-only range, thanks to a 192-horsepower electric motor and a 25.9-kilowatt-hour battery, but that distance will probably be less in stricter U.S. federal testing. In electric mode, the SE can reach 81 miles per hour. With the 4-litre 620-horsepower twin-turbo V8 engine engaged, the picture is quite different. With 789 horsepower and 701 pound-feet of torque on tap, the SE—as big as it is—can reach 62 mph in 3.4 seconds and attain 193 mph. It’s marginally faster than the Urus S, but also slightly under the cutting-edge Urus Performante model. Lamborghini says the SE reduces emissions by 80% compared to a standard Urus.
Lamborghini’s Urus plans are a little complicated. The company’s order books are full through 2025, but after that it plans to ditch the S and Performante models and produce only the SE. That’s only for a year, however, because the all-electric Urus should arrive by 2029.
Lamborghini
Thanks to the electric motor, the Urus SE offers all-wheel drive. The motor is situated inside the eight-speed automatic transmission, and it acts as a booster for the V8 but it can also drive the wheels on its own. The electric torque-vectoring system distributes power to the wheels that need it for improved cornering. The Urus SE has six driving modes, with variations that give a total of 11 performance options. There are carbon ceramic brakes front and rear.
To distinguish it, the Urus SE gets a new “floating” hood design and a new grille, headlights with matrix LED technology and a new lighting signature, and a redesigned bumper. There are more than 100 bodywork styling options, and 47 interior color combinations, with four embroidery types. The rear liftgate has also been restyled, with lights that connect the tail light clusters. The rear diffuser was redesigned to give 35% more downforce (compared to the Urus S) and keep the car on the road.
The Urus represents about 60% of U.S. Lamborghini sales, Foschini says, and in the early years 80% of buyers were new to the brand. Now it’s down to 70%because, as Foschini says, some happy Urus owners have upgraded to the Performante model. Lamborghini sold 3,000 cars last year in the U.S., where it has 44 dealers. Global sales were 10,112, the first time the marque went into five figures.
The average Urus buyer is 45 years old, though it’s 10 years younger in China and 10 years older in Japan. Only 10% are women, though that percentage is increasing.
“The customer base is widening, thanks to the broad appeal of the Urus—it’s a very usable car,” Foschini says. “The new buyers are successful in business, appreciate the technology, the performance, the unconventional design, and the fun-to-drive nature of the Urus.”
Maserati has two SUVs in its lineup, the Levante and the smaller Grecale. But Foschini says Lamborghini has no such plans. “A smaller SUV is not consistent with the positioning of our brand,” he says. “It’s not what we need in our portfolio now.”
It’s unclear exactly when Lamborghini will become an all-battery-electric brand. Foschini says that the Italian automaker is working with Volkswagen Group partner Porsche on e-fuel, synthetic and renewably made gasoline that could presumably extend the brand’s internal-combustion identity. But now, e-fuel is very expensive to make as it relies on wind power and captured carbon dioxide.
During Monterey Car Week in 2023, Lamborghini showed the Lanzador , a 2+2 electric concept car with high ground clearance that is headed for production. “This is the right electric vehicle for us,” Foschini says. “And the production version will look better than the concept.” The Lanzador, Lamborghini’s fourth model, should arrive in 2028.
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.
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