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2020 was the year that European EV adoption exploded so which market do you enter next?

For eMobility, 2020 was demonstrably different to all years preceding it. Amid a slump of car and van sales across the continent, electric vehicles (EVs) hit the headlines for sharp increases in deliveries and resulting gains in vehicle market share.

While this growth trend has been felt consistently across Europe, all markets are not equal. Any business with a multi-national EV strategy will be exploring this with a variety of metrics to measure the size of the EV opportunity in 2021.

So, with this blog, I will present EV registration data for 33 markets across Europe. With this data I propose Europe should be segmented into four separate clusters in 2021. For those looking to expand into their next market, I hope this helps define the opportunity within your multi-national strategy.

graph comparing European markets

Europe’s EV fleet grows by over 70% in one year

For the above graph, I compared two metrics:

  • How many EVs are on the road in each market (vertical axis)
  • How much that number of EVs has grown since 2019 (horizontal axis)

Not 100% of datasets are available for all 33 markets yet* but the picture is clear. Growth rates varied from 18% to 161% across Europe, collectively recording more than 1.2 million EV registrations.

As shown on the graph, I have split each market into one of four key clusters. For me, this is a useful way of seeing how 2020 evolved and reflecting on the opportunities for EV charging businesses in 2021.

The Breakaway: Move over Norway, Germany has arrived.

Norway has long been the undisputed champion of EV in Europe. But, that crown of “largest European EV market” was finally removed in late Autumn of 2020.

Germany registered an unprecedented 390,000 EVs in 2020. This makes it the first market to top 500,000 via a growth of 161% compared to 2019 figures. So, my first cluster is actually just one market. Germany: the EV breakaway.

We were optimistic about Germany but the golden combination of enhanced demand for EVs with enhanced supply of EVs and the impact of enhanced European CO2 regulation created a boom we did not think was achievable.

With the highest levels of requirement for charging infrastructure, Germany is the market with the greatest growth opportunity for EV charging players in 2021. It is the most cited market for international expansion among European players with many international players, predominantly Chinese manufacturers, targeting office development in Berlin or Munich as their European home.

With a very strong domestic presence of manufacturing and innovation, expect Germany to have the greatest opportunity but also the greatest competition.

The Big Five: Sweden joins the club of major EV markets

We used to refer to the “Big Five” as Norway, Netherlands, France, UK and Germany as the five large EV markets with similar growth patterns. With Germany setting a different pace coming into 2021, Sweden has conveniently taken its place. It is the only other market to break the 100,000 EV barrier.

Many EV charging companies have been watching Sweden’s rise closely to realising an opportunity may lie in building a strong regional strategy for the Nordics.

The Big Five will continue to dominate opportunities for EV charging sales in 2021. Norway and the Netherlands had comparatively lower growth but much of this stems from stronger growth in 2019. It should also be noted that two other major vehicle markets have had fantastic EV performance too: the UK and France. It is only Germany that skews this achievement.

The Promising: a cluster of young markets having a significant growth spurt.

Questions have existed around Italian growth for many years. Despite being one of the largest vehicle markets in Europe, it has been slow to adopt EV. 2020 may have seen a turning point for the market, thanks to a 76% growth rate pulling it closer to the 100,000 registered EVs mark. Those patiently developing the Italian market should be handsomely rewarded.

Again, I highlight Nordic nations having a strong growth. Individually, small markets, but collectively a strong opportunity. Building transferrable business units across the region is key in 2021.

The Emerging: a cluster of next wave markets primed for acceleration

It would be unfair to consider this cluster of markets as laggards, growth rates between 20-50% would be tremendous in any previous year. Instead, questions should be asked as to why the growth of their neighbours was not replicated.

The biggest surprise was in Southern Europe. Spain and Portugal experienced less growth compared to Italy. Appropriate post-COVID policies are required to re-establish vehicle sales, Spain was especially impacted by closure of local manufacturers.

Neighbour markets to the “Big Five” also sit in this cluster. Players focused on the Netherlands and Germany have the opportunity available for recreating propositions via partner businesses in Belgium and Austria respectively. A small investment in neighbour markets today could deliver a market leading position when their growth spurt comes in the next few years.

decorative map of Europe

Explore your border markets in 2021

EV adoption remains dominated by Western and Northern European markets, and despite growth from the next tier of markets, EV opportunities will continue to centre here.

EV charging players are learning fast how viable their international strategy is. Commonly this is linked to the nature of the business model (are you selling a chargepoint fixed to the ground or a charging app that could be used in any country?) and how well that can align with a business’s partnerships in each market.

I enjoy talking with those making these decisions on international market strategy each week. I look forward to watching this race continue, and I look forward to your predictions on what will happen in 2021. I’d be glad to chat so please do send me your thoughts at alexander.lewis-jones@delta-ee.com.

*Only the six major EV markets have reported complete 2020 year data. All markets are correct as up to 1 November 2020. For the smallest markets, representing 10,000 EVs or less, analysis has not been provided due to the high sensitivity of a growth rate at low volumes.

Sources: EAFO; EV-volumes.com.

 

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Wednesday, 21 April 2021

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