Western Europe's battery-electric vehicle (BEV) market reached unprecedented heights in Q4.

In the rapidly evolving world of electric vehicles (EVs), several European countries are leading the charge towards a greener future. This article provides an overview of the current state of EV adoption in Norway, Germany, Sweden, and the UK.

Norway, home to the world's largest sovereign wealth fund, has been a trailblazer in the EV market. The Scandinavian country recorded a total plug-in market share of 88.5% in 2022, with its battery electric vehicle (BEV) mix remaining twice as high as Iceland's 35.1%. The Norwegian government initiated the BEV market with the introduction of a few models in the previous decade, including the homegrown TH!NK city model. The country now boasts that every fifth car on its roads is a pure electric model.

Germany, the largest BEV volume market last year, is another European powerhouse in the EV sector. In December 2022, BEV volumes accounted for every third new passenger car entering the country's roads. The German government offers a maximum government-supplied subsidy of €4,500 for the new Model 3 and Y, but is reducing purchase subsidies to more modest levels in 2023.

Sweden and the UK, two other key markets, are under the spotlight this year. Both countries scrapped purchase subsidies entirely in 2022 but still offer generous tax savings for company car drivers. The automakers to closely watch in 2023 due to tax changes in these countries are primarily those with strong market presence, such as BMW, which is actively rolling out electric and automated vehicles. Other OEMs may not make price reductions until further into the year due to healthy order backlogs.

The EU CO2 fleet average emission target remains a significant focus, and traditional OEMs may have to swallow some price cuts once order books thin out. The Norwegian government will apply a NOK 12.5 (€1.10) per kg weight penalty tax for each kg over 500kg curb weight, while from 2023, a 25% VAT rate will be applied for the first time on new BEVs priced over NOK 500,000 (€45,000), causing a rush to dealerships at the end of 2022.

Norway is moving towards a 100% electric car market, but BEV adoption could be set back a few years if other markets react too hastily. The Norwegian government has put a 2025 sell-by date on internal combustion engine (ICE) vehicles, meaning a rebound effect towards petrol/diesel models is off the table.

Lastly, the full study published each month now features an in-depth look at the Chinese OEMs and their European expansion. It's clear that the EV landscape in Europe is dynamic and ever-changing, with countries like Norway and Germany leading the way, while others like Sweden and the UK provide interesting test cases for the future of the EV market.

Western Europe's battery-electric vehicle (BEV) market reached unprecedented heights in Q4.