Why I call bullshit on ACEA's reasons for EV delay.

The dance around EU 2025 CO2 requirements

Here’s the headline from the European Automobile Manufacturers’ Association (ACEA) press release, my screenshot from their website:

I just thought I should show you the irony of these colorful tags of the ACEA website — Green & Clean, Smart & Efficient, Safe & Reliable, Global & Competitive — and the press release they sent out last week. In short, it is a plea to the EU institutions to let automakers keep burning fossils because they are, in fact, willingly not focusing on any of what those eight words mean.

Oh, the irony. But I guess it’s an expected one. The ACEA here calls on EU to trigger a “special crisis clause” to delay the CO₂ targets meant for 2025.

The T&E suitably calls this the “Groundhog day for carmakers, but the complaining has become absurd”.

From the press release:

For context, what they’re talking about here is the next step in CO₂ regulation in Europe: From 2025, dropping the average grams of CO₂ per km (gCO₂/km) of newly sold fleets of an automaker from current 115 gCO2/km for 2021-2024, to 93.6 gCO2/km from 2025.

Now, the ACEA does paint a suitably dark picture in their release, writing (read the full release for the complete doom and gloom):

• EU car sales are still around 18% lower than pre-pandemic levels in 2019;

• Year-to-date EU battery-electric sales volumes have dropped 8,4% in an already shrinking market;

• Year-to-date EU battery-electric market share has dropped from 13.9% last year to 12.6% this year;

• and citing some honestly quite bs McKinsey reports about customer preferences (I’ll leave a deep dive I made on those reports for another day).

Now, you, my dear reader have already seen the real picture of EV sales in Europe and elsewhere in our 2023 and H1 2024 deep EV sales reports, and know the picture isn’t at all as dark as they want you to think. With the EV slowdown for some countries after a huge year for EVs that was 2023, of course it is the perfect moment to send this message out.

Since ACEA linked to “year to date” data on its claims including August, I went through it all to give you a real idea what’s happening in EV sales. Has everything really changed in these two months?

The real picture of European EV sales today

Now, I’m not just talking of the EU here because these ACEA makers obviously sell to the whole of Europe, which is EU + EFTA + UK. Here’s what I found by going through the Jan-Aug car sales data:

15 countries have declined in EV sales, leaders in drop being the small markets of Iceland (-72.4%, although note their 2023 was crazy high) and Latvia (-37.1%). Then comes European largest market which is “going through something” right now, Germany, with -32% year over year sales decline. All the rest are under 30% in decline.

16 countries have risen in EV sales, leaders being again smaller markets or EV markets like Malta (+92.8%) and Hungary (+53.4%), and in the third place the incredible run of Denmark continues with +50.8% growth year over year in an already sizable market. Belgium, Czechia, and Cyprus all over 40% EV sales growth.

Similar numbers go for the EV market share growth or decline, 15 vs 16.

Europe EV sales in total are down -5.5% Jan-Aug 2024 compared to he same time in 2023, but get this:

Europe excluding Germany was growing 4.69% year over year. If we go back to ACEA reporting on EU only, Europe excluding the German market grew 5.09% year-over-year.
And while the EV market share in Europe dropped from 15% Jan-Aug last year to 14% so far this year, the EV market share excluding Germany grew from 14.06% last year to 14.38% this year.

Why I said Germany is “going through something”, it’s because it kind of is. Why is the rest of Europe clearly moving towards EVs and this country suddenly stopped?

The sudden cut of incentives in December certainly had something to do with it, the rest is perhaps a bit more complex. I’m convinced that this market too, like the others in Europe that jump and down for various reasons, will level up very soon back towards EVs.

So you can now see what’s weighing the average down conveniently. And if nobody tells us the larger picture, we’d be sure EVs are on their way out already.

Do they report on the major successes of these countries? Just look at the EV market share in so many European countries today:

🇳🇴 Norway of course leads with 86.81% EV market share, but following it are 🇩🇰 Denmark with 46.91% (with a wild 15.34% jump in market share from 2023), and 🇸🇪 Sweden 32.39%. Do the automakers and the ACEA tell you that nearly every other car is EV in Denmark, and every third in Sweden? Didn’t think so.

At least every fourth car sold is fully electric in the 🇳🇱 Netherlands (31.4%), 🇲🇹 Malta (29.9%), 🇫🇮 Finland (27.12%), 🇱🇺 Luxembourg (26.52%) and 🇧🇪 Belgium (25.9%). How wild is that!

And we’ve got even 8 countries more over 10% for a total of 16 such countries. Even 🇩🇪 Germany actually falls into this category, with 12.68% of cars sold fully electric. 10% EV adoption can be considered somewhat of an inflection point, a point of no return.

The countries you see at <10% EV market share are all from either Eastern or Southern Europe, and living in one of such I can tell you we’re always just a few steps behind but moving on the same direction as the rest. All of Europe will drive fully electric, it is now but a matter of time.

Not all of ACEA agree with the letter

These are the current ACEA members: BMW Group, DAF Trucks, Daimler Truck, Ferrari, Ford of Europe, Honda Motor Europe, Hyundai Motor Europe, Iveco Group, JLR, Mercedes-Benz, Nissan, Renault Group, Toyota Motor Europe, Volkswagen Group, and Volvo Group. Notably, Stellantis stepped out of the group in 2022.

Renault CEO and current President of ACEA, Luca di Meo, just recently warned in an interview with France Inter radio that reaching the targets will be almost impossible if EV sales keep slowing down. “This could cost the carmakers up to 15 billion euros in fines.”

We’ve seen other members of ACEA, like VW Group and Mercedes-Benz, echo the same.

Now, if you remember from our previous reports, Mercedes recently relaxed it’s already pretty wide target for EV sales to nearly meaningless ones. Would expect nothing else here.

However, some have taken the stand in the opposite corner, including from within the member group. Let’s start from the breakaway Stellantis first:

Tavares has indeed started the race — we’ll report on the newsletter today it is just launching the European deliveries of the two affordable EVs — from the joint EV venture with Leapmotor. The T03 compact car will go on sale at the end of the month starting from €18,900 ($20,990) and the C10 SUV from October at €36,400 ($40,6k).

Interestingly, we’re seeing BMW, an ACEA member, join the opposite side too:

Now, we’ve got a comment by what you could consider the “receiving end” of the ACEA call, the EU Commission’s Spokesperson for Climate Protection, Tim McPhie (link):

It’s not a coincidence that, per T&E, EV prices in Europe has increased by a third since 2021, while halving in China and input costs like battery prices dropping to an all-time low. The automakers have plenty of more affordable EVs ready to roll off the line soon, but naturally not launching before absolutely necessary.

The best thing EU can do right now is stay true to the targets, so us consumers could get see the more affordable EVs on the streets sooner. Here is a great further reading from T&E on what are the European carmakers’ CO2 compliance gaps right now and what can we expect from them to close it.

Some automakers are just hurting…

…due to their own short-term profit focus over long-term sustainability, the latter both in terms of the planet and in terms of actually staying in business.

We are witnessing the legacy automakers (well, most of them anyway) being dragged to the future, which is clearly fully electric. And I get it — they’re hurting.

If you don’t make competitive EVs, you are absolutely burning already in China (which has historically been a huge market for our very own European OEMs and they are in fact burning), and you’ll want to avoid that as long as possible and rely on current cash cows, the gas guzzlers here. Makes sense.

EU protectionism against Chinese EVs, biased media spreading EV doom, and a possible short-term ‘relief’ on the new CO2 rules really all really do just one thing, and that is they slightly, just slightly…

delay the inevitable.