* ICE in this diary means Internal Combustion Engine.
Shortly after leasing our first EV (a 2012 Nissan Leaf), I started looking into EVs’ impact beyond individual footprint and towards the bigger picture. My first such attempt was right here at the 2013 No Keystone XL blogathon, organized by the late, beloved Linda a.k.a. Patriot Daily News Clearinghouse.
My basic thesis was (and still is): the EV revolution will start bearing major fruit long before most cars are EVs. It’s all about trends and horizons. Fossil extraction is a big, often politically risky investment, requiring constant infusion of billions for years before generating any income. Once the rationale for such investment dissipates, things can quickly grind to a halt. With EVs on the rise, $$ for oil projects can start drying up, so we get to Keep It In the Ground.
IOW, it’s about getting Big Oil quickly to where Big Coal is at now. Mind you: even in 2019 coal still accounted for a 36.5% plurality of global electric generation. But it’s been on a stumble for the past decade, falling off a cliff in the US and most of Europe. The pace and magnitude of Big Coal’s drop in the West was not even imagined by the mainstream energy-expert consensus a decade ago. Many standard analyses are still not catching up with coal’s actual situation and outlook. There is no doubt now that we can reach an effectively coal-free near future in the West. And this — along with the climate crisis as a global driving motive — is having a strong effect on coal’s fortunes in elsewhere in the world.
So it’s not about the snapshot: it’s the trajectory and outlook. At some point the combined force of EV market penetration and sales trends, together with policy, activism, and consumer trends, economic decision makers will be forced to add 1+1 and conclude the gig is up. Exploration will be off-limits, and drilling plans will shrink dramatically.
Back in 2013, I thought that we’d reach that point once EV sales are a few % of the auto market. That has turned out to be a tad optimistic, because:
- I didn’t internalize how universally broad, vicious, and myopic the resistance to EVs will be. Not just the usual suspects, Big Oil and their political lackeys. The oil coalition is much broader and more pernicious, including also the majority of legacy automakers, dealers, the automotive/economic press, and even many in the public who — politics aside — prefer the convenience of familiarity, and resist “being told to eat their veggies” on car choices.
- Since vehicle fleets take at least ~12-15 years to get replaced, a few percents loss in current ICE sales are dwarfed by the nearly-pure ICE fleet still on the road in most countries. In terms of fleet share, these EV sales become a fraction of a percent, easily offset just by annual sales fluctuations, or by a manipulated consumer rush from cars to more gas-guzzling crossovers and trucks. So since EVs’ short-term impact on oil consumption in the US and Europe has been miniscule, the bean-counters and other EV-resisters could ignore the writing on the wall: the rapidly-increasing trends in EV sales and driving ranges, Tesla’s stellar rise, the faster-than-expected drop in battery prices, dramatic policy changes, and other obvious signs.
Together, these two factors have enabled Big Oil and its auto-industry allies to continue pretending “EVs Are Not a Thing”.
Well, now they cannot. Not in Europe anymore. In 2020 the continent — or at least its economically dominant western and northern parts — has jumped straight from “plausible deniability” territory into immediate disruption territory. What do I mean?
I mean: Going from 3.6% to 11% EV Share in 1 Year!
2019: 560k new plug-in passenger vehicles sold in Europe, the 3.6% share representing a 1.4x rise over 2018.
2020: 1.37M and an 11% passenger EV share, culminating in a 23%-share, 281k-sale December. A staggering >3x jump in EV share, clear into 2-digit disruption territory.
What does a jump to >10% share do?
- Place a hard cap on ICE fleet size projections. Oil analysts looking at this should know that a decade from now, there is no way Europe’s passenger fleet will be even 90% of its current size.
- Demonstrate production and sales capacity. Providing 10% of the market means EVs are not a “niche” for European automakers any more. They’ve put down the big money and can expand further. Reaching 20% as early as 2021 is not out of the question. This in turn means that a more realistic projection would be that 10 years from now Europe’s passenger ICE fleet will be 60%-80% of its current size. With smart money betting on the lower end of this range, if not lower. And another decade after that, The bottom will fall out, with some countries’ decisions to ban ICE sales in the 2030s suddenly looking realistic.
How did it happen? It’s the policies, silly.
A recent demonstration of the new rule’s teeth: apparently, while VW passenger division managed to meet its goal for 2020, VW as a whole missed slightly. Despite reducing emissions from 2019 by 25%, VW reportedly ended 2020 0.5g/km above target — and will pay >$100M. Imagine the fine VW would have incurred, had it sat and twiddled its thumbs like USA’s Big 3 and Japan’s Big 3.
How The Jump played out in leading countries:
In 2019, Germany became the first European country (and third overall) to exceed 100k passenger EV sales in a year. Just barely, with 109k sales. How many crossed into 6 figures in 2020? Let’s see...
- As I wrote in the summer, Germany has the most EV-friendly Covid GND, the Social-Democrats winning the fight to completely exclude ICE vehicles from stimulus incentives. It has paid off in spades: The country’s passenger EV share jumped in one year from 3% to 14%, with total 2020 sales just about 400k — exceeding the stagnant USA to become the world’s 2nd-largest country by volume after China. A year ago no one had even dreamed this could happen. Germany barely made my 2019 Top 10 Countries list. In 2020, I have a feeling it’s on the podium.
- In France the mass entry of Peugeot-Citroen, which didn’t really do EVs till 2020, helped fuel a rise from 3% to 11%, easily breaking the 6-figure barrier to end the year at 186k. The P-C invasion spread across several models, and so no single model was a match to local and continental queen Renault Zoe, which was #1 in Germany as well.
- Lastly, the UK, despite not being an EV-making powerhouse like the other two, went from 3% to 10.7%, logging 175k passenger EV sales in 2020.
Three more countries stopped the dials just shy of 100k EV sales: Trend-setter Norway went from 56% to 74% of the passenger market, for a total of 92k. Sweden’s 94k were good for 32% of the market, up from 11% in 2019. And the Netherlands came in just under 90k, going from 15% to 25% of the market.
A great thank-you for nearly all of these numbers, to Jose Pontes, founder of the EV Sales Blog and EV-Volumes, and maintainer of the official EU site eafo.eu EV section.
The Covid drop in overall auto sales made Europe’s EV gains even more eye-popping in market share terms. One would argue that this extra boost is an optical illusion, since a higher-than-usual proportion of the old ICE fleet remained in service through 2020. No, it’s a win-win: eventually those ICE cars that didn’t get replaced due to Covid will either be replaced a couple of years later — and the longer it takes, the more likely they are to be replaced by EVs — or will be replaced by nothing, meaning smaller fleets which is generally better.
And it’s not just passenger cars. Bus and light-commercial* numbers for the entire year are not fully in yet (this is where you’ll find them eventually) — but while not quite as dramatically jumping as passenger cars, Europe has in general kept the momentum in these two tougher segments as well.
* Europe’s passenger and light-commercial (~10x smaller sales volume than passenger) are together the correct analogue to US light-duty vehicles. Europe doesn’t have as many pickup trucks; instead, small businesses buy light-duty vans. France is continental leader in this segment’s EV revolution, followed by Germany and the UK. Generally EV market share has been slower to rise for light-commercial — but compare to the US pickup and van segments, where EVs are still almost nonexistent.
It’s not just cars: Europe’s e-bus production and delivery is finally reaching more respectably disruptive numbers.
What about the Rest of the World?
Europe is not alone. China already has 3 years with ~5% share under its belt, finished 2020 above 2019 with 6.3%, and stands a good chance to cross 10% in 2021. China’s bus sector had already set the trend, jumping in 2015 from near-zero to ~20% share. After several years of substantial bus fleet conversion, China e-buses have been making EVs’ first visible contribution to reducing current global oil consumption.
I’m sure Big Oil will try to pin its hope on emerging markets, just like Big Coal has done. In both cases it’s a liar’s tall tale and a fool’s errand. China, Western Europe, and the US account for 2/3 of the global auto market, and where they are headed is where the remaining one-third will go sooner or later. The bus sector is right up there with passenger cars, and as China has shown it can move faster when there’s political will, since governments play an even more direct and decisive role in the bus sector. Trucks are a up to a decade behind, but will get there too. This leaves flights, ships and some industrial consumption and power generation; not enough to keep Big Oil anywhere near its current size.
The US, stuck at ~2% EV share for 3 years, is now the big laggard. Chief culprits are tRump and his mob of evil clowns, and a spineless, yet-again-clueless Detroit Big 3 who used the tRump years as an excuse to snooze.
Biden-Harris-Congress must lean hard on the auto market now, from all directions, to help us catch up and deny Big Oil a safe haven here. But this is subject for a different diary.