Germany Plugin EV Share Grows, Fiat 500e Bestseller, Grimm Warnings

Europe’s largest auto market, Germany, saw plugin electric vehicles take 26.0% market share in June, up from 23.6% YoY. Overall auto volumes were down 18% YoY, to 224,558 units, the lowest June in 25 years (except 2020). The Fiat 500e was Germany’s best selling full electric in June.

June’s combined plugin share of 26.0% comprised 14.4% battery electrics (BEVs), and 11.7% plugin hybrids (PHEVs). Their respective results a year ago were 12.2% and 11.4%.

Tesla’s Shanghai production pauses in Q1 and Q2 put a notable dent on BEV growth (across all of Europe) in June — which is normally a delivery peak for the brand. Instead, June 2022 saw “just” 2,908 Teslas delivered in Germany, compared to 8,045 in March — a shortfall of over 5,000 units.

Had Tesla’s June volumes been on trend, and other things been equal, BEVs would have taken 16.3% of the market, and combined plugins, 27.6%. Growth should be back on trend by September, unless other disruptions occur.

Best Selling BEVs

With Tesla’s temporary headwinds, the Fiat 500e too the top spot in June, at an impressive 2,973 units, far exceeding its previous best (March 2002, 1,991 units).

Tesla still managed a decent 2,144 Model Y deliveries in June, taking the #2 spot, followed by the venerable Volkswagen e-Up! in third.

Newly appearing in the top 20 in June was the Renault Megane, joining in 15th spot, with 864 units.

Since monthly results are erratic, let’s step back for an overview of the past quarter:

Shanghai’s shutdowns in Q1 and Q2 have noticeably — though temporarily — hampered Tesla’s volumes. Recall that Tesla easily took the #1 and #2 spots in Q1, with a combined 14,408 units. In Q2, Tesla volume temporarily dropped by 73% to 3,851 units, and ranked #11 and #22.

However, this is no time for Tesla’s competitors to be taking a victory lap. With Shanghai now buzzing again, plus the Brandenburg site also now ramping past 1,000 units per week, Tesla should be at record volumes in Germany by the end of this year.

Here’s the summary of the notable movements in ranking in Q2 compared to Q1:

On the flip side, there were obviously some notable falls:

In the case of the BMW i3, the drop was due to the recent termination of its production run. RIP to its bold design and innovative engineering.

There are a few BEV models to watch out for in the coming months. The Renault Megane is ramping up volumes. Recall that its older sibling, the Zoe, has been immensely popular in Germany (#1 in 2019 and 2020, #2 in 2021). The Megane has the potential to rank well inside the top 10 by the end of this year, from its current 32nd spot.

The Seat Born is seeing steadily increasing volumes, and will climb higher than the 18th spot it grabbed in Q2. It wouldn’t be a great look for the VW Group for it to challenge the Volkswagen ID.3 in Germany’s rankings, but it certainly has a less-vanilla design, and interior.

Further off, the Volkswagen ID.Buzz should prove relatively popular in Germany once it ramps (it remains at dealer-sample volumes for now).  Let’s keep an eye on it. MPVs and camper buses have seen growth in Germany over the last two years, but still remain small segments overall, so the Buzz is unlikely to be a regular member of the top 20.

Group Rankings

Here’s an overview of the manufacturing group performance in the German market in Q2:

Compared to Q1, VW Group keeps the top spot. Tesla has (temporarily) dropped from 2nd to 7th. Stellantis Group, and Hyundai Group, have each shuffled up a spot to fill Tesla’s gap. Renault-Nissan Group jumped from 7th to 4th, overtaking both Mercedes, and BMW, who remained in place.

In volume terms, VW Group grew 38%, Stellantis grew 36%, and Renault-Nissan, 16%. Hyundai Group and Mercedes Group were stable, and BMW Group dropped 18%, partly because the i3 has just left the stadium. Tesla’s case has been discussed in detail above.

Outlook

The long term progress of transport electrification remains on track in Germany, but there are storm clouds coalescing on the economic front, in the short term (at least). These make forecasts for the auto market over the next year or so anyone’s guess.

The political and security crisis in Europe, as well as the trade war, have given a shock to energy supplies. Last Sunday, Germany’s head of trade unions (DGB), Yasmin Fahimi, warned that the resulting economic consequences for the country may be dire:

“Because of the gas bottlenecks, entire industries are in danger of permanently collapsing: aluminum, glass, the chemical industry… Such a collapse would have massive consequences for the entire economy and jobs in Germany.” (Yasmin Fahimi, Bild am Sonntag interview)

Meanwhile German consumer confidence is at its lowest level since records began in 1991 (GFK survey), again related to energy price inflation and food price rises.

The economics minister, Robert Habeck  said on Wednesday, “Alone from the dynamics which are now being created by speculation and fossil energies, there is already a risk of slipping into a recession.”  (Machine translated).

For the auto outlook on the supply side — heavy manufacturing requires huge amounts of energy, and the German auto industry is thus directly exposed to rising energy costs (as well as other supply chain inflation, and shortages). The even more energy-intensive industries that Fahimi mentions (“aluminum, glass, the chemical industry”) are all important suppliers to Germany’s auto industry, and if large portions of those collapse, the auto industry won’t quickly (or cheaply) find alternatives.

These sorts of disruptions could make the previously headlining “chip shortage” look like a walk in the park.

On the demand side, evidently German consumer confidence (noted above) is already at a 31 year low and may fall further, if a recession occurs. This will impact demand for all vehicles, including BEVs and PHEVs.

So with pressure both on auto manufacturing costs, and falling consumer demand, such a scenario would inevitably result in damage to Germany’s most well known industry. The single largest industrial complex in Europe.

To point out that plugins’ relatively cheaper fueling costs may help them maintain relative market share — even with the real prospect that large swaths of the auto industry, the broader economy, and ordinary folks’ lives, face lasting damage — sounds inappropriate.

We will have to keep an eye on the situation. Until we have more clarity about the broader economic outlook in Germany (don’t hold your breath), there’s not much definite that I can say about the plugin transition through the rest of the year.

What are your thoughts on the near term prospects for Germany’s auto industry (and manufacturing economy more generally)? Please jump in to the comments below to share your insights.

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