European EV sales in Q1 outstrip China due to Covid-19

Europe has edged past China in electric vehicle sales during the first quarter of 2020 according to a study launched by PwC. 

The coronavirus outbreak saw China dealing with imposed shutdowns and a national lockdown, leading to a significant loss of profits for its businesses.

Meanwhile, unit sales in Europe more than doubled in that time, compared with the first quarter of 2019. In China, the sales dropped by more than half due to the lockdown.

The loss of sales has already lead to companies like Renault to pull out of partnerships with Chinese automotive manufacturers as they try to curb their losses in the wake of the Covid-19 pandemic.

Despite this, owing to the lockdown currently in place across Europe, the trend could reverse sharply as restrictions in China are gradually lifted throughout the spring and summer period. There have been 84,000 cases of coronavirus in the country since the disease was first spotted in Wuhan in December, and according to official statistics, no new infections occurring.

The drop in cases may allow China’s ravaged economy to reinvigorate itself following the decline of the disease.

Felix Kuhnert, the global automotive leader at PwC, said: “The Chinese government is again introducing incentives for electric vehicles – both subsidies and tax breaks – and China also has the production capacity, so we believe that China will again take the lead in registrations later this year.

Over the next few years, it will be a neck-and-neck race between China and Europe, with the winner decided by political will, improvements in charging infrastructure and the quality and availability of electric vehicles.”

Over 1.1 million jobs in the automotive industry across the EU have been jeopardised by Covid-19, with factory shutdowns and social distancing measures grinding production to a halt.

This is nearly half of the 2.6 million direct manufacturing jobs in the industry provided by the EU, split over 226 vehicle assembly plants.

The study also suggests that when hybrid vehicles are added into the calculation, alternative energy vehicles already have by far the highest market share in Europe. Renault’s Zoe is by far the best-selling battery-powered EV in Europe, with Mitsubishi’s Outlander being the best-selling plug-in hybrid.

Mr Kuhnert also predicts that government support for alternative power vehicles could mean that PwC’s forecast for 2020 for 11 million passenger vehicle sales is globally achievable. He estimates the broader automotive industry could sink by anywhere between 10 to 40% over the course of the year.

He said: “We will see a scrapping incentive program in Europe, but with an ecological element. That could improve environmental factors such as air quality and also help automakers meet their carbon-emissions targets, which could persuade consumers and voters that not only will such incentives not only help the auto industry in the long run but also have very immediate benefits for society as a whole.”

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