Sales of electric vehicles surge in Europe

As Covid-19 crunches car sales globally, a backlog of orders has helped electric vehicles maintain momentum in much of the world and perform better than cars and trucks fuelled by petrol or diesel.

In March, as lockdowns swept the globe, sales of batterypowered vehicles, including plug-in hybrids, surged in France, Germany, the Netherlands, Sweden and the UK, a new report from Bloomberg New Energy Finance says.

The demand, however, is somewhat synthetic. European emissions targets will rise considerably this year, and vehicle makers that do not meet them will face steep fines for the first time. Passenger cars in Europe are required to reduce carbon emissions by roughly a quarter from levels of two years ago. So 4%-6% of cars sold in Europe this year will have to be batterypowered to hit new carbon dioxide targets.

Many brands have pushed electric vehicles more aggressively in recent months and held back 2019 orders so that they would count towards 2020 mandates, according to BNEF analyst Colin McKerracher.

Drivers in Europe’s three largest car markets — Germany, France and the UK — bought 46,052 electric vehicles as the pandemic deepened in March, almost double the number a year earlier. The tailwind could continue for several months.

Meanwhile, the coronavirus has underscored the environmental damage of vehicle emissions. Covid-19 fatality rates have been closely linked to air quality. Sheltering restrictions and lockdowns have emptied once busy streets and idled factories, resulting in cleaner air in many of the world’s densest, dirtiest cities.

McKerracher says electricvehicle adoption rates could hold steady this year or even rise. “Longer term, I think the pressure to electrify road transport only rises from here,” he said. “People will be angry that action wasn’t taken sooner.”

The short-term picture, though, remains grim for the vehicle industry at large. Analysts predict a large decline in overall vehicle sales this year. In the US, vehicle makers should brace for the virus to gobble up $100m-$300m in 2020 revenue, according to Bloomberg Intelligence analyst Kevin Tynan.