Sweden’s Plugin growth is catching up after the recent Pull-Forward
Sweden’s share of plug-in electric vehicles in January was 52.4%, unchanged from 52.9% year-on-year. The temporary pause in growth comes after a move forward in December. The total car volume in January was 35,476 units, down about 27% from January 2022. The best-selling all-electric was the Volvo XC40.
January’s combined plug-in share of 52.4% was made up of 28.9% all-electrics (BEVs) and 23.5% plug-in hybrids (PHEVs). This compares with respective shares of 52.9%, 25.9% and 27.0% a year ago; thus, BEVs are still steadily replacing PHEVs in share.
With plugless hybrids (HEVs) also seeing slight growth in share compared to the previous year, internal combustion engine-only vehicles were squeezed and continued to lose share.
In terms of volume, all powertrains except the small “other fuels” lost volume year on year.
Murky Incentive Changes
January’s low ebb for plugins was said by the trade association Mobility Sweden, to be “a consequence of the high number of new registrations in December ahead of the reduction of the climate bonus from January 1.” No further elaboration.
And so… I have to admit that I am now a bit confused. Based on several hours of previous research of Swedish reports (via machine translation), I had understood that the bonus reduction had already been introduced — with immediate effect on November 8, 2022 — for all push orders made after that date, which I reported last month.
Now I find this throwaway comment from Mobility Sweden, and – after much more digging – that the Swedish Transport Board then issued more corrections and attempted clarifications about bonuses. They have said recently both that “from the turn of the year [Jan 1st 2023]the rules for climate bonuses will change.” and also that, “The climate bonus ends on November 8 [2022].”
To their credit, the agency seems to recognize that the messages are prima facie contradictory and says “I understand that it can be perceived as contradictory when we go out and inform about changes to something that we previously announced has ceased to apply. Therefore, this clarification feels urgent, says Jonny Geidne, qualified investigator at the Swedish Transport Agency.Yet the purported “clarification” itself does not provide any clarity – perhaps something is lost in translation.
At this point, I would like to ask all our readers who are Swedish speakers and have a very clear grasp of all the relevant incentives, and their latest changes, to please help me and our other readers understand all this. Please jump into the comments section below if you can decode what’s going on.
Regardless, looking back from here on the data from the last few months, we can now conclude that there was indeed a pull-forward effect on plugin registrations in November and especially December, from which January experienced a significant hangover. This explains the lack of year-on-year growth in January. Once we have more clarity on the incentive landscape, we may be able to predict when things will return to normal (I will update this report if our community increases).
The overall long-term trend for plug-in powertrains in Sweden will of course remain “up and to the right”.
Best selling BEV cars
While overall BEV volumes declined, the Volvo XC40 retained its top spot in the charts, albeit at a quarter of December’s volumes. The Kia EV6 took #2, and the Volvo C40 took #3.
Only a couple of the top 20 BEVs increased their volumes in January compared to their recent average. The Mazda MX-30 came close to its record volumes, with 178 units. It is now available in both the basic battery-only model and in a range-extending version (with over 80 km electric-only range).
The new BMW iX1 hit 110 units in January and should continue to grow from here (subject to sufficient supply).
At the other end of the scale, both the Ford Mach-e and Aiway’s U5 were not delivered at all in January. All of the Teslas were at the lower end of their logistic scale, as were several other models that performed well in December (eg BYD Atto 3, Cupra Born, VW ID.5, and more). Again, many of these changes simply reflect temporary allocation reversals, following the December forward rush.
In terms of new faces, BYD Han saw its first Swedish samples arrive in January (8 units), and the Nio ET7 also appeared for the first time (only 1 unit). Both are large sedans, around 5 meters long and decent value compared to segment rivals. We will have to wait a few more months to see what volumes they can achieve in steady state.
Now let’s take a step back and look at the closing three-month picture:
The Volvo XC40 continued to dominate and once again took the top spot, a strong turnaround from the low ebb between May and August. The Volkswagen ID.4, the former favorite, once again had to settle for 2nd place. Volvo C40 came third.
Here are the significant climbers compared to 3 months earlier:
The following models dropped in ranking:
Most of these changes are temporary, but the venerable (and still futuristic) BMW i3 is now finally being phased out everywhere except Germany, where modest numbers continue to be delivered (at least for now).
It’s a bit ironic that – just as the most interesting 1st generation extended BEV engine retires – Mazda is coming out with a new iteration of this format.
I still think a BEV+Rex that has decent all-electric range (80+ km /50+ miles) that can be used completely independent of the ICE is still a good compromise at this stage, while global battery production capacity remains a limiting factor keeping ICE sales afloat. Three 20kWh BEV+Rex vehicles in daily use with families and commuters will typically electrify far more KM driven than a single 60kWh BEV plus two ICE only vehicles. Later in life, on the used market, even with a potentially failed Rex engine, these could step into the role of BEVs for local use, for years into the future (much like early Nissan Leafs still do today).
Of course, when global battery production capacity is no longer a bottleneck, the calculus becomes different. We’re not there yet. BEV “purists” feel free to preach to me in the comments for this heresy 😉
Sight
Obviously, the aforementioned changes in the Swedish bonus policy have temporarily disrupted the car market, but the transition will no doubt return closer to long-term trends in due course. I eagerly await clarifications from our Swedish readers on what the “actual” changes to the incentives have been, and insights into likely market patterns in the near term.
Sweden’s wider economic landscape also shapes the car market. That’s what Mobility Sweden says “Private customers are decreasing as a result of the economic situation and households’ reduced purchasing power… price increases for cars, higher interest rates, and reduced bonuses for ordered cars… The increasingly difficult financial situation for households is contributing to a shift from private customers to business customers.” (Machine translation).
This reflects the Swedish economy shrank in the fourth quarter of 2022with the Minister of Finance predicts recession lasting until 2024and inflation is at its peak highest figure in over 30 years (and climbing). Sweden is not alone here, as the UK and Germany are also now in (or entering) recession.
We will see how the economy shapes Sweden’s car market and the transition to electric cars. With the long-term cost savings, I still expect the plugin share of the car market will grow this year, but partly because of the total car volumes will likely be lukewarm.
What are your thoughts on Sweden’s car market and electric car transition? Please jump in below to join the discussion.
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