The Rise of BEVs- Global Trends, Expectations, and Debunking ICE Myths

Introduction

This is a guest blog by LeRaffl, find him on Twitter (X) and BlueSky!

The world is changing, and so are the cars we drive - or are they? Depending on who you ask, you may hear people claiming electric vehicles are unstoppable. Others argue they are failing massively and if not a next generation of ICE vehicles, then Hybrids or even Hydrogen are going to take over.

Over the past 2 years, I have accumulated a better view than most on what is actually happening in the world's automotive market, at least a better view than those random voices you'll hear left and right.

So today, let me show it to you. Let me show you what is happening, where, and how fast. Are electric vehicles really just a momentary thing, or are they here to stay?

Let me first tell you a little about what we're about to do. This is going to involve math. If you're less of a math savvy person, that's fine, you can skip chapter 1 and go straight into the outcomes if you want.

1. Basics: The S-Curves of Adoption

You may be familiar with this, you have certainly experienced it before. Whenever new technology has been introduced in the past that would turn out to dominate the older tech, this is the type of adoption we're seeing.

Groundbreaking technological changes come to the market, take a tiny share at first, then accelerate, take more and more market share, and then finally flatten out at or near 100% market share.

We have seen this happen too many times to list, but you might remember the introduction of the iPhone and the smartphone takeover after that. The internet, the telephone, LCD televisions, digital cameras, streaming services, and, last but not least, the automobile itself were technologies that rose in this kind of style.

So if BEV are truly a groundbreaking new technology, we would expect them to rise in this kind of fashion, right? To make it more visual, we are talking about this kind of curve:

You may have heard the term "sigmoid curve". That's what people are referring to. However, the term "sigmoid" doesn't necessarily cut it. These kinds of curves are usually seen in mathematics, specifically in statistics, and they come in thousands of versions, each with its unique characteristics.

This means if we want to check for this kind of curve, we have quite a few to choose from. The one I chose to use is based on a distribution called Weibull.

Why this one specifically? Well, because math. But two of the key features are something you can see from the graphs above.

Firstly, these kinds of curves can result in shapes that are NOT S-curves. This is important because if we choose to use a curve that will give this shape either way, then we'll have gotten no information. We specifically want something that can fail to produce an S-shape.

Secondly, these kinds of curves aren't necessarily symmetrical. This is important because if we choose something that's always symmetrical, then the later years in the transition will always be equally slow as the early years are fast. This isn't something we can just assume. We need some degree of freedom for this.

So we chose a type of curve. What now?

Now comes the fun part. We research tons of data for registrations by fuel type, translate them from absolute numbers to percentages, plot those 100 or so points and try to lay one of those curves into the cloud of data points such that the line fits the cloud as nicely as possible. We do that for each country. Then we observe if the result is a curve in this shape and how well it fits. Passenger cars are what matter to us specifically, partly because data for those is far easier to come by, partly because this is mainly what people talk about and partly because it is more representative of the population of people living in the countries.

Now let's see what some regions produce, shall we? Spoiler: Basically all countries fit these curves, they mainly vary in timeline.

2. Europe

Certainly a diverse region, ranging from having essentially already completed all the way to having barely started the transition.

Norway is the country with the biggest BEV share, if there's any country that can tell us whether the concept of these curves holds, that's the one.

And indeed, Norway does seem to fit this kind of curve quite well. Naturally, there will always be a bit of fluctuation, but all in all this fits quite well. We have the shape and we have a snug fit. Looking at the line, we can see how it rose from the 20% level to the 80% level in about 6 years. This can be our benchmark in the future.

What about other countries? Do they fit? Are they comparable?

Scandinavia fits well and is generally very far along the curve already. Let's look at a few more.

You may notice a drop-off in Germany specifically. Next to the general economic situation (high interest rates affect BEV more than ICE), you may not be surprised to hear that there is another reason for it: Incentives

In 2023 Germany cut incentives for BEV in 2 steps. One of which was for corporate cars, which are a big deal there, the other was for all remaining BEV. The official reason was that the state budget had a sudden lack of funds due to the supreme court rejecting special funds from back in COVID times. This effect, coupled with the misinformation that comes with it, can be felt to this day. Considering Germany is THE country for cars, that is not a surprise. Even less surprising is the fact that those funds could have been founds elsewhere in the budget, but weren't. Why is that not surprising? Because the minister of finance, whose responsibility this falls under, is part of the FDP, a party that has propagated "openness to technology".

This party has been spreading the idea that politics must under all circumstances remain open to all technologies. And in their words this explicitly includes internal combustion engines, Hydrogen and specifically eFuels, which deserve a debunking article all on their own.

I am not going to show off every last country I have done these curves for, but you get the idea, right? It generally fits very well as a concept, it's mainly transition speed that is different between countries.

Having said that, you should also take a look at the bottom of the list - the slowest countries so to speak. In Europe, there are two countries that stand out here, Spain and Italy:

As you can see, it's still quite possible to fit a curve onto their data, but the curve itself is slow. While big parts of Europe and the world have problems with misinformation about BEV, Spain and Italy seem to be especially hit by it. Reportedly in Italy oil companies and politicians are a little too chubby for example, so it's really no wonder the curve looks like it does.

Finally, let's take a quick look at the EU overall.

You can visually see how early 2024 dipped due to the overall economic situation and how within 2024 itself, the cycle with later months being higher than earlier months is still kept.

Let's move on to outside Europe now and see if these curves hold elsewhere as well. After all, if BEV really are a disruptive new technology, they should be observable all over the place.

3. China

This is a big one. You have certainly heard a lot about China from all sorts of sources, so you'll not be surprised by how the curve looks that's generated from their historical data.

Just like the other graphs, this shows BEV share in new registrations. I mention this, because I have noticed that in China you will often see so-called NEV share reported. NEV is simply a category that includes more than just BEV, but more on that later.

The important insight in China is, the data does again seem to follow the curve we thought it would follow, and quite fast at that even.

But why did I choose to grant China their own paragraph in the article? It's just one country. Europe has far more countries, and they were lumped in together.

The reason is that we need to talk about something. We need to talk about Germany again. And that's because German automakers sell big chunks of their cars in China. We will take VW as our prime example.

In 2023 the VW group (that includes all VW brands like Porsche as well) delivered 9,362,000 vehicles worldwide, earning them 322 bn EUR revenue. Almost all of those vehicles were passenger vehicles, to be exact they delivered 8,901,338 passenger vehicles. (sales and production are more or less the same as deliveries) Of those 8,901,338 a whopping 3,233,933 went to China, that's 36%, almost triple of what went to Germany itself. Of the 322 bn EUR, 50 came from Asia-pacific (which is more or less China), so about 15.5%. In 2019 This was still at 17%. And they delivered not 3.2 bn passenger vehicles to China, but 4.2 bn, aka 39% of their deliveries.

What does that mean?

It means VW is losing China as a market fast. After seeing the graph above, are you surprised? I wouldn't need to tell you that VW has problems selling specifically BEV in China. I would also not need to tell you that China is now going to the offensive and starting to sell cars to Germany instead. You've heard that a thousand times by now, with all the tariffs on Chinese cars and whatnot. These tariffs are by the way not going to solve anything. At best, they will stop an influx of cars from China into Europe, but China as a market will stay unaffected even in the best case, and that's the whole problem for the automakers, because with smaller markets come smaller profits, a smaller takeaway from scaling effects, making cost per product more expensive, leading to even less sales (or alternatively less profit), it's a death spiral. And this death spiral starts with German brands selling ICE cars in China and will be inherited all over the world.

And the biggest problem isn't even anything political, no, the worst part is that those Chinese cars aren't even bad. In the past, German brands could pride themselves on luxury, on quality, on their name. But with BEV we have entered a new age. And in this new age, people (especially in China) don't care if your panel gaps on the left are 3mm and 3.5mm on the right. They care about Infotainment. They want screens and perks. It needs to be a cool experience. Essentially a Smartphone on wheels is what they want. And this is exactly the opposite of what is being provided from Europe.

And how do we know it's THIS that is lacking (next to price of course)? The answer is simple: Tesla is selling BEV in China with much less impact on their sales. Tesla has been made fun of extensively in the past, but they are the only non-chinese brand that currently seems to stand a chance in China.

4. North America

Were you surprised it took until now to get to Tesla? I certainly was when writing this, but while we're at it talking about Tesla we should look at the USA and Canada. Let's start with the obvious one: the USA

Do you notice the first little blip in the data? That's the Tesla Model 3. In fact most of the curve is made up by Tesla themselves, which also explains why their deviation from the line is so small. Tesla simply ramps their production very smoothly for years now. GM is a bust and Ford has been making losses for a while now on BEV. Biden might have given the scepter to Mary and told her she led, and it mattered, but the king of BEVs in the US is still undoubtedly Tesla. Always has been. Without this one singular company, none of these curves would exist in the first place. They'd all just be flat lines. And if you notice the years and when the lines in all the graphs above took off, you'll more than once see that it correlates with the Tesla Model 3 releasing. And that's not by chance, either. It's a great product for an affordable price. The end. There's not much to it. Everything else is an analogue story to VW and Germany. But we shouldn't leave North America before taking a quick swing at Canada.

What is interesting to see in Canada are regional dependencies. They probably exist in the US as well. Taking two examples, we can see the range of how Canada splits.

In Quebec, not only is BEV share above the 20% level already, but our fitted line suggests it takes about 10 years to get to the 80% level.

Ontario on the other hand is still struggling with the 10% barrier, and their current development makes our fitted line suggest 15-16 years to achieve the same step from 20% to 80%.

In fact, given that statcan provides their data split into provinces, we can do these curve fits for all of them and then visualize them on a map. If we choose to do this, we can plot any number of things. To make it easy to read, I often go with the trailing 12 months BEV share or the above-mentioned expected time to get from the 20% level to the 80% level. Doing this produces the following map:

Time to transition from 20% BEV share to 80% BEV share in new registrations in Canada by province

It should be noted that Ontario sees about 30k registrations per quarter, while Quebec has about 20k registrations per quarter.

Why is this worth a mention? If you pay attention in close detail to BEV share across countries, you will start to notice that the fluctuations are not only cyclical (later months in a year typically come with higher BEV share), but also that absolute BEV sales numbers fluctuate less than those of ICE cars. Because of this, BEV share will fluctuate. More importantly though, it suggests that the customer base that already exists consists of people that are more sure of their purchase and are less influenced by traditional reasons. This is consistent with the picture we got so far.

Advertisement and lobbying against BEV seem to have great influence in holding back people from buying BEVs, so those that still buy them can be expected to be more sure of their purchase, while BEV incentives influence the BEV share in a major way without it touching ICE numbers. We'll touch on lobbying shortly.

5. Other Countries

Having had a look at Europe and North America we need to cover at least a few other locations as well just so we can be sure this isn't a localized phenomenon, since you will be confronted with "It's only Europe that forces BEV"-type comments.

So let's take a look at Australia first:

Australia is still in an early phase of transitioning, but the first slope can be seen already. Since the transition stage is still so early and since we fit our curves by minimizing the distance to the points as best we can, the earlier we try this, the more volatile our curve will react if we choose to add additional points in the future. Curves like the one in Norway don't really change anymore when adding data, but Australia will. Having said that, even Australia doesn't really look to contradict our notion of the transition curve.

In contrast to Australia, their next door neighbor New Zealand shows a more depressing take on things.

Originally, New Zealand showed impressive growth. However, with these visuals, it's easy to spot there's something happening in New Zealand. The answer to this is the end of the CCD (Clean Car Discount) on 2023-12-31, which offered rebates of up to $7k for new BEV and $3.5k for used ones in late 2023 and even up to $8.6k before July 2023. New Zealand relies heavily on imports from Japan.

Moving on to South America, we can choose some more remote places.

Remember when I told you small numbers make it easier to transition? Uruguay is a prime example of that. With only a good 2k registrations a month, Uruguay doesn't need many units to make their share rise. And rise it does, mainly via BYD, who is the main player.

Let's swing back to larger Europe for a moment to conclude with the last singular country I want us to talk about, Türkiye.

Growth has been impressive in Türkiye in the last few months. They also keep an S-shape pretty much without hiccups. The reasons for Türkiye specifically are various. They span from hedging against increasing fuel costs, to an exemption in VAT, to Togg, Türkiye's first domestically produced electric car. Togg enjoys strong governmental and public support, fosters national pride and their T10X is quite successful, being the 3rd most sold car in Türkiye. All of this happens parallel to BYD building a factory that will not only increase supply, but also bring jobs to the country. Türkiye is profiting majorly from the push towards BEVs.

Naturally, not all countries across the globe have visibly started their transition on a visible S-curve yet. If you try and fit a curve onto their data, most of them produce a fine curve. However, visually it doesn't really look all that convincing yet for them because BEV share is low and the concept we developed using our S-shaped curves turns out to work way better than just looking at dots and going "Hm, yeah, nah, maybe".

One of those countries, the worst one in fact, is Japan. Not only does the data visually look like nothing is happening, no, but even our very well performing model cannot really deal with this data.

No real BEV Trajectory visible in Japan yet

Instead of showing any real curvature or slope, Japan outputs basically a horizontal line. When we try and look up how long it takes to go from 20% to 80%, it fails completely and outputs -∞, essentially telling us "I can't really deal with this."

Simply put: The model breaks if there's no trajectory we could model

Technically the model DOES still output something, but the interpretation is more than shady. This is what I call "showing no noteworthy transition" and it's the result of what you have already guessed before I was able to type it out: Toyota

In the past, Toyota was known for cheap and reliable cars and they were the biggest manufacturer worldwide, even pushing away GM in the US and taking over the country. Nowadays Toyota has failed miserably with the Mirai, a Hydrogen car that is expensive, inefficient and badly made. It's funny they chose to name it "Mirai", seeing how this is Japanese for "future". It sold 4,023 units in 2023. This is globally, even.

Instead, Toyota focuses more and more on various Hybrids and chooses to more or less ignore BEV entirely. The only BEV they have put out (excluding Lexus), the BZ4X, almost makes the impression it was designed to be bad as to make their Hybrids more appealing in contrast. This is a bad choice, as we will see in the next paragraph.

6. The Myth of Hybrids taking over

You may often be told Hybrids combine the best of both worlds, when in fact they combine the worst of both worlds. I am not here to talk about technical details, you'll find much more in depth articles and accounts talking about why this is, explaining how smaller engines and batteries come with only downsides or how repair costs are much bigger. Instead we will look at this from the same point of view we used for our BEV curves.

You likely have read through the first few paragraphs and thinking, "Can't we do the same thing for ICE sales or Hybrid sales?" And the answer to that is yes, yes we can. Good thinking!

Nothing is stopping us from mirroring the curve and doing the same for ICE share, just as a falling version. And if we add up the BEV curve and ICE curve, we will naturally be left over with a curve for Hybrids, which we can then compare against data.

Before we do, let's think about what to expect. If we are indeed correct in our hypothesis that BEV are taking over, then these newly sold BEV have to take their market share from somewhere. Humans are a species with inertia in forming opinions and trying new things, so it'd be reasonable to think that a big chunk will not switch from pure ICE vehicles to pure BEV vehicles from the get-go.

Instead, people will probably switch gradually, right? They'll go from a pure ICE to MHEV, to HEV, to PHEV, to BEV, so essentially from ICE to BEV with a quick pit stop at buying Hybrids if we want to simplify it to 3 categories.

Let's not overdo it though and only show a few countries. We'll start with one of the countries furthest along the transition.

Trajectories of ICE / BEV / PHEV shares in Sweden

The green curve is already old news to us, but the red ICE line and the blue PHEV line fit our hypothesis pretty well, don't you think? It shows people switching away from ICE into BEV and PHEV and later on leaving PHEV behind for even more BEV.

Norway shows the same picture. The only reason we looked at Sweden instead of Norway is because I have yet to update the Norway categories to ICE, PHEV and BEV.

What about other countries far along?

Trajectories of ICE / BEV / PHEV shares in Denmark

In Denmark the Hybrid decline is even harsher and also quite asymmetric (you may remember that this was one of our key assumptions).

And it's not only Scandinavia showing this development, China is following this shape very closely as well and so is the EU.

Trajectories of ICE / BEV / PHEV shares in China

Trajectories of ICE / BEV / PHEV shares in the EU

Unlike for BEV, where we can make out the curve with the naked eye (even with relatively few data points), the blue curve has a peak, meaning it's hard to see it with only the data points and no line, since few countries have yet to reach the point when PHEV would naturally go down again.

But if you remember the previous paragraph when I told you that Toyota has made an unwise decision focusing on Hybrids, this is the reason.

Unfortunately, companies, news outlets and even analysts more often than not, look at only the current data without trying to follow a trajectory and doing the whole "what if this goes on like this"-game that we are doing right now.

This explains why so many of them tell you Hybrids are selling so well, it's because they are! But what they aren't telling you is that this is not going to remain the case. And they don't do that because they don't know it themselves.

If OEMs advertise their Hybrids, which are taking advantage of transport getting more and more electric by the day, then none of this comes as a surprise. It was always to be expected that we would see a rise in Hybrid sales. But it is also expected that this rise will not continue. And we have the data to show it. (Norway, Sweden or Denmark for example)

7. The end of OEMs

You have now been walked through the process of these transition curves and seen what they show in terms of future sales. What you have not yet thought about are the implications of this, of which there are many, but two in particular I want to mention.

The first implication is China. We have seen the staggering speed at which China, the world’s biggest car market, is transitioning towards BEV, leaving ICE behind. We have also seen that Hybrids will peak there in only a little bit.

Since China is such an important market for most OEMs, this will hit them. If China is transitioning towards BEV faster than you, a manufacturer, are transitioning your sales towards BEV, then naturally what's going to happen is that you will lose your ICE sales in China faster than you can rack up BEV sales. And this is even assuming you can sell your BEV in China in the first place.

The first case of this being reported in the news was VW. They are in this exact kind of position and have as a result now had to close several factories and let go a big number of their employees.

VW is not the only OEM this is happening to, though. German automakers are all in the same boat. All of them have trouble keeping their Chinese market and struggle to sell their BEV, partly because they are expensive premium models, partly because they simply don't cater towards the modern customer. They are ICE cars with batteries, unlike BYD or Tesla.

This even applies to Toyota, if only at a later date, because the focus on Hybrids shifts this outwards a bit, as you can see by the blue curves falling later than the red curves.

This has a trickle-down effect even, because fewer sales mean you cannot profit from economies of scale as much, driving your costs up. And since batteries are getting cheaper quite fast, any OEM still selling ICE cars or Hybrids is maneuvering itself into a corner.

The result will be that OEMs will go bankrupt. If our trajectories hold even approximately, that's the only possibility.

Once that is the case, jobs will be lost en masse, economies will enter recessions, GDP will tank and entire business branches will die off. It will not be pretty.

The second implication I want to mention is that of used car prices.

What we have produced above are curves for new registrations, aka sales. It's not unreasonable to think that consumers for used vehicles will have similar demand to that of new cars' buyers.

Think of this for a second before we go on.

New cars are becoming used cars in the span of a a few years, so today's new car market is the used car market in a few years.

But is the demand in a few years the same as the demand today? That is doubtful.

What does this mean? Well it means that the used car market of the future will have more BEV demand than the used car market will have BEV supply. It also means that the used car market will have more ICE and Hybrid supply than there will be demand.

What this leads to is increased BEV prices on the used car market, yes, sure, but those aren't the issue since the new car market is getting cheaper anyway, so there's a counter for that.

No, what I want you to focus on are ICE and Hybrids, because this will mean their prices will drop. And fast! Depending on where you live, this will impact you earlier or later and at different scales, but the concept remains.

So I urge you to not buy ICE or Hybrids if you plan to sell them in the future. You will have to lower your prices drastically to find a buyer.

Of course this is just my advice, but you have seen what this advice is based on, so you should be in a position to judge if it's good advice or not.

Let's wrap this up now.

But before I leave you alone, let me give you another picture, a map this time. What we can do is take the lines, look up in what year the 80% level will be hit, and then we can color countries by this year. This is obviously going to change significantly over the years, but it gives a nice overview over what's happening globally.

Year countries are expected to hit 80% BEV market share in new registrations as per historical data

8. TLDR

BEV truly do take over in an S-shaped transition
BEV are taking off globally, the data says so
ICE is declining
Hybrids are expected to rise before declining

This article only showed off highlights. For more details on any one country please look up my highlights tab. I try to update each country regularly and pin those updates so you will find about 30 countries' graphs on there.

I wrote this article in a little bit of a holiday hurry. There is so much more to say about the topic. There was no time to mention absolute numbers (see valley of death) or effects like autonomy.

What I want you to do with this article and all the graphs on my highlight tab? Simple, really. We need to educate people about the topic and show them what is happening. We need to fight the fear, uncertainty and doubt people still have.

I published this before the holidays, so you can read it before all your family gathers and this topic undoubtedly comes up.

Use the insight you have gained and tell people about reality. Be nice. Be loving. Be understanding. It's hard for people to change their view. We can spread the love. We can spread the truth.

You're essential for that.

Thank you (^u^) /

- LeRaffl (that's an L at the end btw 😉)

Thank you Raffl for sharing this with us, see you on the socials!

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