EV supply and demand

VW seems to have given up the EV battle. They are ending ID3 production in their Dresden plant and reducing staffing at their all-electric Zwickau plant. At the same time, they have partnered with Xpeng to essentially put a VW label on Chinese designed and built BEVs. They are in talks to make a separate partnership with Chinese Leapmotor to make its Jetta brand.

VW cannot compete independently in the EV marketplace. They will become increasingly dependent on Chinese technology and manufacturing. So much for the tradition of “German engineering”. Perhaps BMW will save the German auto industry.

@DrBob2 This is why GM and F have left the mid-sized market mostly by now. The successful number of cars produced to pay for the assembly line is difficult to achieve. VW is just cutting its losses. Other models if by other manufactures will fill the void. It is not an EV market failure.

I wonder if we’re not seeing the result of something entirely different. Yes, charging stations and incentives matter, obviously, but there is a dramatic financial plus for countries where electricity is cheap. Here’s a chart showing, rather than “dollars & cents money”, the time is takes “to buy electricity”, which normalizes such other things as food, housing, etc.

I see that the leaders on the list are those which are 1) advanced economies with 2) homogeneous populations 3) significant energy resources from whatever source, 4) geographically small - and which have been aided in adoption by government incentives.

While the US has incentives as well, it is a far more diverse society and geographically huge as compared with others at the top of the list.

The adoption rate is a complex animal with many moving parts. The short term government push is aided mightily, I would argue, by the economic incentive of “cheap fuel”.


Did you mean heterogenous or homogenous?


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Corrected, thank you.

The average gear head in the US knows all the stats on fuel efficiency and then buys what he wants. The Germans are the same way. I’d need to see a comparison between diesel and electricity in the German market to have a better answer. Then I’d still revert to the buyer does whatever with less of a care.

I’d also need to see the Germany adoption rate of EV. Even if it is behind the US by a bit this won’t lock it out or preclude EV.

Probably. BUT, you always have to look at the alternative. You need the same chart of daily gasoline expenditures to daily wage. Most of the countries with expensive electricity also have expensive gasoline. So for those who require daily travel using some from of energy to effect movement, they’re either going to pay in the form of gasoline or in the form of electricity. And one of the biggest advantages of EVs is that using electricity to effect motion is far more efficient than using gasoline to do so (much less wasted heat, much less wasted friction, and less wasted motion of parts).

You don’t even have to look far to see the phenomenon. Just look at CA. Electricity is 50 to 100% more expensive than elsewhere, and gasoline is also 50+% more expensive than elsewhere. And EVs/hybrids are HUGELY popular in CA. Heck, we had 2 discussions here recently about how uberlyft drivers are preferring to buy older Prius models despite possibly having to replace the battery someday soon. That’s because the only way they can earn a reasonable profit in CA is by minimizing their fuel costs.

And all I need to do is look at my own records. My previous nice 4-door sedan (a genesis with a very capable 3.8l engine) would take me about 50 miles on $10 of gasoline (maybe a little less today with the higher gas prices), and my current nice 4-door EV (a Tesla, also with a very capable motor) takes me >250 miles on $10 of electricity. And the old 4-door sedan needed to be replaced anyway, and I replaced with an EV that was in the same price range as ICE vehicles I was considering.


@DrBob2 @Goofyhoofy

It is a lot of Horse Puckey.

VW just does not have a successful product as the assembly line won’t get paid for plus.

Germany is a huge leader in EV as of 2023

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I mean - sure? VW isn’t saying that folks aren’t adopting EV’s as quickly as they thought for no reason. If there are barriers to adoption (say, inadequate roadside charging opportunities), that will be a reason why growth isn’t happening that fast. But that doesn’t change the fact that growth might not follow an S-curve all the way up to a large proportion of adoption.

Seems unlikely. If we look at places like Norway or Sweden, which have shown the largest switches to EV’s, Model Y is a small fraction of the market. It’s the best seller in those countries - but it “only” has 15% of the market. More than 80% of EV’s sold there were brands other than Tesla. Where there’s demand for EV’s, consumers are happy to purchase all kinds of EV’s - not just Teslas.

VW’s position is that consumers aren’t showing as strong a desire to switch to EV’s as they had thought. That’s consistent with what we’re seeing in the near term. Government policies can create massive subsidies/disincentives pushing the switch, - but outside of the countries that are doing that (which are the smaller markets), adoption has started to slow. So overall, you’re not seeing as rapid growth in the EV market as some had hoped.

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Interestingly, Norway - the worldwide leader in EV adoption - doesn’t have that. Norway’s got among the cheapest electricity prices in Europe (close to that of the U.S.), and among the most expensive gasoline in the world ($8.37 per gallon). Norway’s got one of the biggest spreads between gas and electricity costs in the whole developed world - save perhaps Iceland, which has cheap geothermal electricity and $9.00 per gallon gas (and is, not surprisingly, also a leader in EV adoption).


Yep. Low electricity prices and high gasoline prices is the sweetest spot of all for spurring EV adoption.

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The more important factor, the Western world can afford to move to EV. We are doing so quickly now.

VW is saying what they are saying because they see their own EV sales slowing. That’s not true for Tesla, which makes a better BEV, or MG, which makes a cheaper BEV. VW is rationalizing for an inferior product.

My point is that the car market in Europe is very heterogeneous, where data from rapid BEV-adopting Scandinavia are mixed in with that from slower adopting eastern European nations. That introduces a lot of variability into the data depending on which region happens to be buying more cars at a given time.

The Model Y began deliveries into the UK in 2022. BEV sales rose 40% from 2021 with the Model Y accounting for over 20% of the BEVs sold. That’s a noticeable impact.

Introduction of the Model Y can significantly increase BEV market share in markets in the early stages of the S-curve.

VW thought they could make an EV competitive with the Tesla models. They just found out that they cannot, not if they want that EV to be profitable. If there is a decline in EV sales in Europe, I think it is because the OEMs have put out products that are not worth the sales price. That says less about the demand for EVs and more about the available products.

Again, with the entry of the Model Y a year ago, the UK appears to be entering the S-curve.

Again, that seems unlikely given what we see in the markets that have fully moved up the S-curve, like Sweden and Norway. Teslas make up fewer than 20% of those EV markets. Consumers that are willing to buy EV’s appear to be getting products that they think are worth the sales price from a variety of manufacturers, across a plethora of makes and models. That’s pretty inconsistent with the idea that only Tesla is selling EV’s that people want to buy.

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Again, Tesla market share only seems to be constrained by supply. In a June, 2023 article:

The Model Y represents almost a quarter of all car sales in Norway since the start of the year, with 24.2% market share for this single car model…Tesla as a whole has a 26.3% market share this year, making it the country’s #1 brand. Tesla Model Y outsells 2nd place ID.4 by 4x in Norway, 97% electrified in May | Electrek

Now that the Berlin gigafactory has increased the availability of Teslas in Europe, Tesla market share in the mature BEV Norwegian market is over 25%.

Also coincident with ramped up production from Berlin, Tesla substantially increased its European market share during the first half of 2023.

In most of the world, Tesla is driving the BEV market.


They must have had a rougher couple of months. Your article has data through May - but through August, Tesla’s market share in Norway was just under 19%.

But regardless of whether Tesla’s market share is 20% or 25% (and obviously it will vary over time), the overwhelming majority of Norwegians (75%-80%) are buying EV’s made by companies other than Tesla. This doesn’t mean that Tesla’s aren’t awesome - it just means that other companies are making plenty of other EV’s that Norwegians find to be worthwhile value for the price. The EV market in Norway (or Europe generally) isn’t mainly or mostly Tesla, and it’s growth isn’t limited solely by how many cars Tesla can pump out.

VW is actually the market leader in Europe, ahead of Tesla, with about 24% of the market compared to Tesla’s 18% YTD. Both automakers have a higher market share than last year’s full-year figures (and Tesla is up more) - but both are gaining at the expense of other auto groups. Tesla isn’t taking share from VW, which has 6 of the top 10 models in Europe (led by the Skoda Enyaq, which is the second best-selling model after the Y).



In a senior moment, posted reply to a different thread. Here it is again.

Which just goes to show that if one raises the incentives high enough, people will buy their second or even third choice if the first choice isn’t available. Nevertheless, when Tesla enters a market, it almost always immediately becomes the top selling BEV. Tesla is driving the BEV market, at least outside of China.

But look, here is all you need to know. VW is saying there is slowing demand for EVs. Tesla is selling a bunch of EVs in Europe. MG is selling a bunch of EVs in Europe. That suggests the slowing demand is for VW EVs, not the general European BEV market.

One final point. Whether the EV S-curve is flattening or not depends on what data you are using. If EVs includes plugin hybrids then the data is potentially problematic for evaluating the S-curve for BEVs. Specifically, plug-in hybrids were in decline during much of the period you cite as evidence of an EV slow down, while all-electric BEVs are showing S-curve adoption.


In Q1 2023, Battery EV (BEV) sales jumped 32% YoY while plug-in hybrid EV (PHEV) sales declined 13% YoY. Consequently, the EV share of total passenger vehicle sales declined during the quarter from that a year ago. European EV Sales Increased Over 13% YoY in Q1 2023 with Tesla Model Y as Bestseller - Counterpoint

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No - it often immediately has the top-selling BEV model. In many markets - including most of Europe - Tesla isn’t the number one auto manufacturer by sales. For example, we’ve been talking about Norway, and Tesla hasn’t been the market leader in Norway since 2019. The overwhelming majority of EV’s and BEV’s that are sold, and have been sold, in Europe aren’t Teslas.

But that’s not true. VW is also selling a bunch of EV’s in Europe. I mean, MG isn’t even close - VW has two single models (the VW ID4 and the Skoda Enyaq) that sell more than MG, and as an automaker they sell 10x as much. But they’ve sold more EV’s in Europe than Tesla this year as well, with 20.3% marketshare compared to Tesla’s 12.3% (a large enough gap that we know that VW sold more BEV’s as well, since they don’t have many large-volume PHEV’s in their stable). And that’s actually up slightly from where they were the same time last year! VW has grown marketshare and sales volume from a year ago. They’ve actually been doing really well, among the OEM manufacturers - its BMW, Mercedes, and Hyundai-Kia that have seen their marketshares fall precipitously.

Tesla only dominates the EV market in North America. In most of the rest of the world, they are a very strong manufacturer, and are one of the top sellers in the market - but often lag behind a domestic producer in that market and make up only a modest part of the overall market. They contribute importantly, but not overwhelmingly, to the sales growth in any market outside of North America.

Here’s the bottom line - European EV sales for 2023 through August were 1.67 million units. Through the same time last year, they were 1.44 million units. That’s only a 15% rate of growth. EV/BEV share of the auto market went from 20%/12% to 22%/15%, respectively, YoY. That’s good growth, but hardly hypergrowth. Which is what VW - as the market leader in both EV’s and BEV’s in Europe - is pointing out.

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Be interesting to see what happens when the updated version of the VW EV camper van becomes available in a year or two in the US. Lots of nostalgia but also no idea about real buyers vs talkers/shoppers.

Seems to be delayed, or at least one model of it is delayed.