2020: the year the EV must take off

In their report submitted in February 2019, Xavier Mosquet and Patrick Pelata considered that it was urgent, in order to "make France a leader in low-emission vehicles", to "create strong momentum to develop the electrified vehicle market": In the light of the emission curves for 2017 and 2018 and knowing the CAFE targets defined by the EU for 2020 and 2021, the roughly 30,000 battery EVs and 14,500 rechargeable hybrids registered in France in 2018 were not enough and it was essential, in their opinion, that from 2019 onwards, both firms and public authorities should be strongly mobilised.

 

At the end of 2019, in terms of registration figures, the effect is not very significant since, at the end of December, electric vehicles accounted for 42,800 (1.9% market share) and rechargeable hybrids for 18,600 (0.81%): manufacturers have waited until 2020 to launch their offers so that their EV registrations - which will double this year and then be affected in 2021 by a coefficient of 1.67 and in 2022 by 1.33 - will effectively take them out of the red zone in which de-dieselisation has put them.

 

Beyond the "wars of religion" that continue to be fought, in France as elsewhere in Europe, for or against electrification of the automobile or for or against BEVs (vs. hydrogen), the question everyone is asking themselves at the beginning of January is whether the gear change so long awaited by EV promoters will be observed.
It should be remembered that in the industry contract signed at the Strategy Committee meeting in May 2018, the targets were set at 100,000 EVs for 2020 and 135,000 in 2021, and at 75,000 PHEVs in 2020 and 115,000 in 2021. The targets are high for EVs (multiplied by 2.5 in one year) and very high for PHEVs (multiplied by 5), but they are probably not unreachable given the changes in supply that are taking place this month. Indeed, it should be remembered that 86% of EV registrations in 2019 will be accounted for by seven models (Renault Zoé, Nissan Leaf, Smart Fortwo, Tesla Model 3, Hyundai Kona and Kia Niro). By 2020, according to Transport and Environment, we should reach 33 BEV models on the market and, above all, the manufacturers that supply them will have a very strong interest in selling them and creating a sustainable appetite for these vehicles.

 

Indeed, as was measured in China in 2019 and as is taking shape in France for 2020 and even more so for 2021, the financial support that consumers receive to acquire these vehicles will not be sustainable and the amortization of the efforts made to develop them will depend on the ability of carmakers to find "real" demand at prices that will remain high in the next two to three years in any case. The oil price per barrel that had risen to $75 in the fall of 2018 has now fallen to $63 and is not helping to find the optimal TCO equation. The fact that the movement of the "yellow jackets" has deprived the government of the weapon that could have been the "Climate Energy Contribution" complicates the matter and, in this context, the halving of the bonus granted to companies to acquire EVs puts the industry at risk of struggling to achieve the targets it has set itself. To take the case of Zoé, of the 18 818 vehicles sold in 2019, only 9664 were sold to private individuals, whereas the authorities bought 2042 and companies 3385. It is difficult to see how the objective of multiplying EV sales by 2.5 can be achieved if it becomes more difficult to convince business customers.

 

The BCG, which presented its 10-year forecast for the automotive market on Thursday, January 2, told us in Les Echos that "the rise of electric and hybrid engines in car sales could take place more quickly than expected". Whereas in 2017 he was expecting a 25% share of electrified vehicles in world sales in 2025, and nearly 50% in 2030, BCG now estimates that electric vehicles could account for a third of the market in 5 years, and 51% in 10 years (18% of battery-powered EVs and 33% of HEVs and PHEVs).

 

To explain this, the cabinet refers to European and Chinese policies as well as bans decided by many local authorities around the world. It calculates that the cost of a battery pack would fall below 100 dollars per kWh by 2030, whereas it was worth 540 dollars in 2014, and considers that the drop in associated TCO alone should be enough to drive the market from 2023.

 

In fact, the stakes of massification are there: only it can ensure that, in 3 to 5 years, the economic equations that are still fragile today will be resolved without a joint effort by public authorities and companies. All that remains is to pass this milestone and to mobilize to ensure that it is: this is what Mosquet and Pelata call "momentum", where the clarity of collective mobilization removes objections and convinces manufacturers and consumers who are still hesitant that we are there and that the economic and commercial equations that we used to manipulate until 2019 have changed parameters.

 

The retreat of the French State, which seems to be afraid that its policy is working too well and which changes the parameters in December, has, in this perspective, a rather catastrophic dimension.

 

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Translated with www.DeepL.com/Translator, corrections by Géry Deffontaines