In 4th Quarter, for first time Hybrid and Electric Vehicles outsold Diesel and Gasoline Cars in the European Union

Ann Arbor (Informed Comment) – In the European Union in the fourth quarter of 2022, for the first time in history diesel- and gasoline-powered automobiles with internal combustion engines (ICE) were a minority of vehicles purchased. Hybrid, plug-in hybrid and battery-electric (BEV) cars together outsold the ICE models, according to DW.

The European average was substantially brought up by Germany, where consumers have rushed to go electric in a way only outstripped by Norway. In December, 55% of German new car sales were BEVs or plug-in hybrids, so that doesn’t even count the older brake-charging hybrids, such as Toyota’s Prius. So reports Maximilian Holland at Cleantechnica. A year ago, in December 2021, plug-in models were only about a third of new car registrations. Holland estimates that at the current rate of growth, battery-electric vehicles will be half of new vehicles sold in Germany in 2026 and 90% in 2028. Although these projections are hypothetical, they are useful in opening our eyes to just how quickly things are changing.

The Russian war on Ukraine was expected by many observers to slow the progress toward green energy, but in fact it gave it a fillip. There is nothing like spiking gasoline prices to make consumers take another look at electric vehicles, which are much cheaper to run. As we move to local solar, wind and battery, moreover, electricity prices will be less beholden to geopolitics and less volatile.

Costs are dropping. Tesla has announced global price cuts of between 6% and 20%. While these price reductions are mostly about marketing, trying to overcome consumer resistance, and competition for market share, it is likely that further price drops will be driven over the next decade by new technology allowing cheaper and more efficient batteries.

In the US, the Chevy Bolt is now available for about $27,000, with a potential $7,500 tax credit that gets it below $20,000.

The German automobile industry is jumping into BEV production with both feet. Last year, Volkswagen sold 325,100 Volkswagen battery-electric cars, up nearly a quarter over the previous year.

Likewise, Mercedes Benz’s fully electric car sales rose to 117,800 in 2022, growing 124 percent — a bright spot in a year when over-all sales fell 1% because of pulling out of the Russian market, supply chain bottlenecks, and other problems.

Germany, with a million electric cars on the road, has made progress with setting up charging stations, and has big plans to do much more. Likewise, the Biden administration’s Infrastructure Act and the IRA will jumpstart charging networks throughout the US.

Some 46% of German electricity is from renewables this year, and even though there has been a temporary spike in coal use because of the Russian gas crisis provoked by the Ukraine War, it is unlikely to last very long, and anyway was not as big as had been feared. Germany’s electric cars are thus achieving a significant reduction in carbon dioxide emissions, and this reduction will accelerate for the rest of the decade.