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Norway has been a global leader in switching its transportation to electric vehicles and has set its deadline to end the sale of petrol and diesel engines by 2025, much earlier than any deadline set by other European nations. The UK is planning to do the same from 2030 while Germany from 2035 and France by 2040. The Norwegian Road Federation disclosed that Battery Electric Vehicles (BEV or EV) made up 77.5% of all new cars in September, up from 61.5% a year ago. Tesla Model Y, a compact sports vehicle, was the first in terms of market share with 19.8%, followed by the company's Model 3 with 12.3%. Skoda's Enyaq was third with 4.4%. Internal Combustion Engine (ICE) vehicles, i.e. petrol and diesel cars together only had a market share of 5.3% (!) on the new car market in September 2021.
The sudden drop in interest in petrol and diesel cars can in part be attributed to the fact that the state of Norway imposes high monetary disincentives on ICE vehicles and subsidises BEVs, making the purchase price of electric and hybrid vehicles lower.
While places like California, New York, or Brussels have envisioned banning ICE vehicles from their streets completely from around 2035, Norway is not aiming to have such stringent measures, therefore traditionally powered vehicles will continue to circulate on the second-hand car market. However, new car retailers are saying that interest in conventional vehicles has decreased so much that soon it will not be worth it for them to keep petrol or diesel cars in stock, so they are looking into delisting them from their offers completely. Some dealerships are saying this can happen as soon as next year. Therefore the ICE market may completely be reduced to the second-hand market in Norway very soon.
The rest of Europe and Malta is still far off when it comes to their EV market share but the trend is very similar. In August 2021, it happened for the first time on the European level that more electric vehicles were sold than diesel-powered ones. According to JATO Dynamics Ltd, a global supplier of automotive business intelligence, fully or partially electric vehicles had a 21% market share in the new car market in Europe in Q2 2021. Although still, more than two-thirds of new cars sold in Europe were powered by petrol or diesel. In Malta, no new car sales were available as of Q2 2021, out of 408 thousand vehicles registered on the island, only 3,946 were electric, but the increase was 28.2% compared to Q1 2021.
The example of Norway can be a glimpse into the future of EV markets elsewhere in the world. While some regulators will attempt to curb the sale of conventional vehicles by banning them, perhaps these measures are inefficient or unnecessary. As the prices of electric vehicles continue to drop with the help of different government subsidies and the improvement in battery technology – batteries being the most expensive part of an EV – and ICE and EV prices become comparable, market forces alone can do the trick and we might achieve electric vehicle dominance and zero emissions in transportation earlier than expected.
Disclaimer: This article was issued by Tamas Jozsa, Research Analyst at Calamatta Cuschieri. For more information visit,?www.cc.com.mt. The information, view, and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.
The information provided on this website is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Similarly, any views or opinions expressed on this website are not intended and should not be construed as being investment, tax or legal advice or recommendations. Investment advice should always be based on the particular circumstances of the person to whom it is directed, which circumstances have not been taken into consideration by the persons expressing the views or opinions appearing on this website. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views, or opinions appearing on this website. You should always take professional investment advice in connection with, or independently research and verify, any information that you find or views or opinions which you read on our website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. CC does not accept liability for losses suffered by persons as a result of information, views, or opinions appearing on this website.
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