It's well known that a large part of car sales in developed economies correspond to businesses, rentals, and fleets in general. The business world shares the market with private consumers who go to dealerships for a new vehicle purchase. in Europe, businesses account for more than half of the sales.
In fact, businesses, dealerships, rentals, and fleets in general made up 54 percent of total registrations during the first quarter of 2022, according to information provided by JATO Dynamics. The data, from 17 European countries, indicate that the percentage has dropped compared to 2020 mainly due to the boom in pure electric cars. Are electric cars having that big an impact in the region?
EV Ownership Is Half Business, Half Private:
JATO's analysis reveals that slightly more than half (50.2 percent) of Battery Electric Vehicle (BEV) registrations during the first quarter of this year were for business. It is less than the total average of the continent, equal to 54 percent. Furthermore, the percentage is lower than that of the business sector regarding demand for cars with internal combustion, fuel cell, mild hybrid, and plug-in hybrid engines.
In other words, the electric car boom in Europe has a strong private-owner component. This is very good for the industry, as the margins for retail sales to individuals are usually higher than those for corporations. Furthermore, consumers are truly responding to the incentives offered by governments across the region.
It's also good in that demand isn't driven by artificial sales like the practice of self-registrations, where many brands sell their cars to dealerships to show better sales results at the end of each month. The more private registrations there are, the better it is for brand profitability and a clearer understanding of market trends.
Plug-In Hybrid Is The Opposite
In contrast to the healthy sales mix of electric cars in Europe, plug-in hybrids and PHEVs showed a strong share of business registrations through March 2022. According to the data, 69 percent of the recorded registrations in the first quarter were done with companies and fleets, leaving only 31 percent to private individuals.
These cars have become a good alternative for many companies across Europe, due to their lower fuel consumption and some tax benefits depending on the country.
The Curious Case Of The Dacia Spring
Although the Tesla Model 3 is the most popular electric car among individuals and businesses, it is the Dacia Spring that has the largest share of normal customers in terms of overall sales.
In fact, registrations to individuals represented 83 percent of its volume in the first quarter, just like its older siblings (the Sandero and Duster) among cars with internal combustion engines. Their registrations to individuals accounted for 88 percent and 84 percent respectively, making them the best-selling cars among consumers.
The author of the article, Felipe Munoz, is a JATO Dynamics Automotive Industry Specialist