The Dutch market for battery electric vehicles (BEV) is slowly recovering. It is 82% higher in the first half of 2022 than in the first half of 2021, thanks to 29,428 registrations. At the same time, the internal combustion engine (ICEV) vehicle market fell by 16% to 124,280 registrations.
In the past decade, before the disruptions caused by Covid-19 and now Ukraine, the Dutch car market has had between 400,000 and 450,000 cars annually. The last normal year was 2018, with 443,000 registrations.
Declining Dutch car market with shift to BEVs.
The Tesla Model 3 came on the market in 2019, followed by a few competitors. The market grew to 449,000, but that year the shift from ICEVs to BEVs began. In previous years there were some smaller sales of BEVs, but it is not yet eating into ICEV sales. In 2019, BEV sales grew 157% from 24,011 to 61,624, while ICEV sales fell 8% from 419,000 to 388,000.
In 2020, the Covid-19 disruption impacted both market segments. BEVs grew a meager 19% and ICE vehicles fell a whopping 27%. Tax cuts and EU fines for not selling enough BEVs caused automakers to register many thousands of unsold cars as deliveries for 2020, creating a reservoir of BEVs to be sold in early 2021, often at handsome discounts.
BEV sales in 2021 got off to a very slow start. At the end of the year, the usual year-end peak was also lower. The result was a decline in BEV sales, both in volume and market share, one of the few countries in the world where this has happened. They were BEVs at 12% and ICEVs at 8%.
This year it seems to be getting back to normal. In the first half, BEVs were up 82% and ICEVs were down 16%, a clear shift to BEVs in an overall contracting market.
The shrinking market this year is likely mainly caused by supply problems – the chip shortages, the transport problems with insufficient capacity for containers from Asia to Europe, the Ukrainian suppliers who saw factories shut down by bombs and personnel going to the front lines or fleeing to safer places.
There is enough money to see a thriving market even with the current high inflation rates. Sales figures come back, but delivery is often many months in the future, giving the impression of a shrinking market.
If the automakers prioritize BEV production and deliveries over ICEV production and deliveries, a further shift from ICEV sales to BEV sales this year could be an optical illusion. But not all automakers have enough BEV models or the need to prioritize one powertrain over another. It is more likely that the shift is real.
The most important allowance – a lower tax in kind (BiK) for company cars – is fixed for this year and for the next two years. No major end-of-year peaks are expected this year and next. The BiK incentive accounts for about 60% of the new car market and is not limited in budget. The other 40% have a cash bonus of about half the value and on a shoestring budget — just for the early birds. The rest have nothing or have to wait until next year.
BEV market share lags behind by 12 months.
Both incentives are too small to really make a difference, but will make the decision to go electric easier. The shift may begin to accelerate with the new models set to hit the market later this year and next year. If we look at new models such as the MG5 and the Renault Megane E-Tech, we see an increase in efficiency and a better price level compared to the models of just two years ago.
Which models and brands are the most popular on the Dutch market, I leave to the articles about my colleague Jose Pontes writes. He’s much better at that part of the reporting than I am. A spoiler that I can reveal: Tesla is no longer the Dutch champion it used to be. There are already too many Tesla cars on the road, too few models and trims to choose from, and they are too expensive.
A number of Chinese brands are coming to Europe. NIO and XPeng are in the higher echelons of the market, but the Ora Funky Catas shown in Oslo at EVS35, it could also put pressure on European automakers to try harder to make what the public likes to buy: affordable cars.
ORA Funky Cat as shown at EVS35 in Oslo 2022.
ORA Funky Cat Information Sheet at EVS35 Oslo.
Traditionally, the Dutch car market sees 55% of the sales volume in the first half of the year and only 45% in the second half. This year will probably be different. In the first half we saw fast growing delivery times due to production and logistical issues. If the problems ease in the second half of the year, we will probably see more signups in the second half than in the first half.
The Dutch automotive sector, organized in RAI and BOVAG, expects sales volume of 390,000 vehicles by 2022† After registering only 153,000 in the first half, a boom to 240,000 in the second half is unrealistically to be expected. Delivery delays occur throughout Europe and even worldwide. The production capacity specifically for BEV models just isn’t there. Only part of the current backlog can be completed in the second half of the year. Market and public deserve a more realistic forecast.
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