Nordics on track to wave bye to ICEs first?

Over 100 different pure electric (BEV) models have entered Europe's most Northern market over the past decade, contributing to nearly every fifth car on Norway's roads today (15.9% BEV parc January 1, 2022) motoring along silently. The half millionth model will enter the 2.9m car market during this year's second quarter.

Matthias Schmidt

European Automotive Market Analyst @ Schmidt Automotive Research

Meanwhile the zero emission models which can be found on the country’s roads range from the absurd: the garishly coloured and original gull-wing doored EV, Mercedes SLS EV supercar. The marginally more sensible: the baby-faced and Lotus-based Tesla Roadster. While the less fruity but arguably just as exotic homegrown lead-acid battery-driven Th!nk City are among these.

Visually, the roads of this wealthy oil-rich market, stretching from Oslo to Bergen, have become as diverse looking as the multi-coloured aurora borealis lights that illuminate its winter skies. While acoustically, city centres remind one of that moment when noise-cancelling headphones are switched on during plane journeys.

While Norway’s industry leading plug-in (PHEV/BEV) mix of 89.8 per cent during this year’s first quarter – with just over 30 months to go until the lights are turned out at ICE showrooms – stands out, the other four northern fringe markets all saw their combined BEV/PHEV mixes top all other West European markets.

Iceland (62.7%) and Sweden (53.5%) both saw the majority of their new car volumes capable of charging externally, while Finland (34.4%) and Denmark (33.6%) both followed, seeing at least one-third of their new volumes being either a BEV or PHEV model.

The next best market was The Netherlands with 28.6% mix.

Although the collective population of all five northern lying markets (27 mn) accounts for just one-third of the population of Germany (83 mn), it helps underline why they accounted for just 16.1% (87,600 new plug-ins) of the region’s new plug-in registrations, despite the high individual mixes.

Germany alone accounted for 27.7% (151,400 units). However, while total volumes are never going to compete with more central major markets, the high concentration of BEVs in a relatively compact geographical region makes it appealing to new market entrants, especially from China. FAW, Nio, XPeng and BYD are all making their first European baby steps here, offering quick feedback in a micro and manageable market environment. During the opening quarter, Chinese OEMs accounted for every ninth new BEV in Norway, or double the regional average (4.4%). Five per cent of all the vehicles on these North European roads (parc) up to January 1, 2022 were BEV models already, while across the entire West European region, just 1.2% of all cars were BEVs. This falls below 1% if the five Nordics are deducted.

In an almost perfect storm scenario, all five nordic markets that benefit from high levels of renewable energy and economic living standards are witnessing this silent revolution. With well-heeled governments on hand to fund high purchase incentives or, more common in fact, lower taxes than their ICE equivalents –helping price parity – this form of market stimulation can only partially be replicated in markets lying further south.

Source:Nordics on track to wave bye to ICEs first? | Schmidt Automotive Research

Having just returned from a trip to Denmark and Sweden, the tangible signs of a revolution on the roads are certainly well underway. Not only in green-thinking metropolitan bubbles can plug-ins be seen recharging between hip coffee shops, but also in rustic fishing villages, parked next to upturned barnacle-lined boats.

Having visited Oslo in 2015 when new car BEV penetration was running at just below 20% mix, it appeared monumental, but being in Sweden seven years later and Q1 2022 BEV penetration running at 28.3%, or 53.5% if PHEVs are included, it gave an even starker impression that a tipping point has arrived.

With a Malus creating headwinds for ICEs and a Bonus creating tailwinds for BEVs, bonding price parity with combustion engine equivalents, it will likely be geopolitical headwinds and lack of supply that will brake even greater further adoption for now.

Once the winds settle, however, expect Europe’s Northern Lights to continue to shine brightest… for the time being.

And finally…
Matthias will be at the Financial Times Auto Summit next week, so please get in touch if you are heading there also


Matthias Schmidt

European Automotive Market Analyst @ Schmidt Automotive Research
Automotive Analyst with 15 years of experience serving the highest-ranking executives and decision-makers in and around the industry Member of @thefactory Berlin Automotive.

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