UK car sales rebounded in the past month with sales of petrol and diesel cars seeing a smaller share of total sales in the first quarter and JPMorgan expecting the growing share of electric vehicles to accelerate further in coming years.
Just under 284,000 cars were sold in March 2021, up 11.5% on the same month last year, though sales of just over 425,500 so far this year is down 12% on the first three months of last year.
Looking just at last month, sales of battery EVs were up 88% to a little over 22,000, while hybrid EVs, petrol hybrid and ‘mild hybrid’ petrol and diesel vehicles all saw increases.
Petrol cars were still by a long way the biggest selling cars in the UK, with almost 138,000 registered in the month, a 48% of the market.
In the first quarter of 2021, petrol car sales have represented 49.2% of total sales, down from 60.4% a year ago, with diesel vehicles 11.4%, down from 18.9%.
Pure battery EVs have represented just 7.5% of cars sold in the UK, up from 3.8% at this time last year. They have been eclipsed by ‘mild hybrid’ petrol vehicles at 10.7% and ‘mild hybrid’ diesel at 7.6%, while plug-in hybrid EVs have had a 6.3% share and hybrid electric at 7.4%.
JPMorgan, in a note to clients on Tuesday, observed that the global share of pure and hybrid electric vehicles (EVs) in February rose to 7.5% from 5.5% a year earlier.
European markets currently hold the highest penetration rates of 12.9%, compared to China with 8.7% and the US with 3.2%.
By 2025, the share of EVs in Europe is expected by JPMorgan to increase to 33%, comprising of 18% battery EVs and 15% plug-in hybrids.
Competition is heating up, the analysts noted, with mass market original equipment manufacturers (OEMs), the four-seater compact segment priced around €30k includes models such as the Mini-e, Peugeot e-208, Honda-e, Nissan Leaf, Renault Zoe and Seat Mii.
On the higher end five-seater compact segment there is “strong competition” between VW, PSA Group and Renault, with an average battery size of around 42kWh and electric driving ranges of about 260kms.
Mass market SUVs are priced in the €30k-€35k range, with Peugeot’s e-2008 SUV and DS 3 Crossback e-Tense competing with the likes of Hyundai Kona, Hyundai IQNIQ, Kia eNiro and Kia e-soul models.
“Within the luxury segment, Tesla has the strongest pricing power across peers, and also offers leading capabilities in terms of range, charging speed and energy efficiency.”
More than 90 new battery EV are expected to launch between 2021 and 2025, with 26 this year and 28 in 2022, with German premium OEMs “accelerating launches reacting to Tesla in Europe”, while VW has the “largest economies” as Ford is basing its hatchback on VW’s electric platform.
Stellantis, the group encompassing Peugeot, Citroen, Opel, Vauxhall and Fiat Chrysler, will unveil its battery EV plan in June this year.
Keep an eye on vans, the analysts added. Margin dilution is inevitable within the mass-market segment but light commercial vehicles (LCVs) will be key, the JPMorgan team said, as they command the highest average selling prices and offer battery sizes on a par with SUVs/sedans, so will deliver higher contribution margins for the OEMs.