According to recent data released by European Automobile Manufacturers Association (“ACEA”), the number of zero-emission models sold in the European Union more than doubled year over year in August. According to Reuters, fully-electric models made up about 21% of all vehicle sales last month, marking the first instance where they constituted more than a fifth of the total sales.
More Into Sales Data
Per Reuters, the European Union witnessed close to 1 million electric vehicle (EV) sales within the first eight months of 2023. Notably, the market for fully electric cars saw a remarkable upswing, with sales more than doubling to 165,165 units in August 2023 from a year ago.
With the auto industry recovering from a pandemic trough, a 21% rise in car sales in the EU in August, marked the 13th consecutive month of growth in sales.
Optimistic Outlook for the EV Market
Per Global Market Insights, the EV market in the European Union (“EU”) is poised to witness a CAGR of 16% from 2023 to 2032. Valued at $303.6 billion in 2022, the EV market in the EU is projected to reach $1.35 trillion by 2032, fueled by extending regulatory and policy support.
To stimulate the adoption of EVs, governments in the bloc have introduced incentives such as tax breaks, subsidies and reduced registration fees. These incentives are designed to make EVs more appealing and affordable to consumers.
European nations have also implemented rigorous regulations and policies to curb greenhouse gas emissions and address climate change, pushing the companies to focus more on the EV segment of their production line. With the EU looking to achieve carbon neutrality by 2050, the emphasis is firmly placed on the significance of investments and the optimistic prospects within the EV sector.
Car Makers Increase EV Presence in EU
According to Reuters, after receiving regulatory approval, Vietnamese EV maker VinFast plans to deliver about 3,000 units of its VF8 crossovers to France, Germany and the Netherlands.
Nissan also announced that by 2030, it plans to sell only EVs in the region, with all the new models being electric, according to an article by Reuters. Nissan’s new objective aligns it with other automakers like Ford, Stellantis and Renault.
Any Obstacles?
The Brexit situation in the continent creates a cause of uncertainty for EV manufacturers. Per Reuters, EVs traded between the single currency bloc and the U.K. stand to trigger 10% tariffs, potentially resulting in a price surge.
Per the EU-U.K. post-Brexit trade agreement, EVs must contain at least 45% EU or U.K. content starting from 2024. Additionally, there is a requirement for EV battery cells and packs to have between 50% and 60% content to avoid facing import tariffs of 10% from either the British or EU side.
Inefficient EV supply chains in the U.K. and the EU, raise concerns regarding manufacturers meeting the criteria, prompting them to call for the rule to be postponed until 2027.
ETFs in Focus
Below, we highlight EV ETFs with exposure in Europe.
iShares Self-driving EV & Tech ETF (IDRV) – has an exposure of 22.13% in Europe
Global X Autonomous & Electric Vehicles ETF (DRIV)– has an exposure of 12.32% in Europe
KraneShares Electric Vehicles & Future Mobility Index ETF (KARS) – has an exposure of 8.52% in Europe
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Global X Autonomous & Electric Vehicles ETF (DRIV): ETF Research Reports
KraneShares Electric Vehicles and Future Mobility Index ETF (KARS): ETF Research Reports
iShares Self-Driving EV and Tech ETF (IDRV): ETF Research Reports
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