EV numbers continue to surge in EU: ACEA

Sales of new electric vehicles (EVs), including hybrids, surged in 2022, outstripping those of diesel and gasoline vehicles, according to the European Automobile Manufacturers Association (ACEA). This may explain stagnant lubricant demand across the continent and a lack of post-Covid recovery in demand.

EV sales made up 44pc of all new vehicle sales in the year, compared with 36pc and 16pc for gasoline and diesel vehicles respectively. This continues a growing trend of EV sales increasing at the expense of the declining internal combustion engine (ICE) vehicle market.

The total number of EVs on the road in Europe increased from 5.8mn units at the end of 2021 to 9.8mn units at the end of 2022 according to the latest data provided by ACEA, an increase of 67pc. The number of diesel vehicles fell by more than 336,500 to 138.3mn and the number of gasoline vehicles rose by around 45,000 units to 129.3mn.

EVs' share of all European vehicles increased by 1.4 percentage points to 3.4pc at the expense of ICE vehicles. EV sales are likely to continue increasing in the run up to 2035 when the EU has committed to completely ban all non zero-emission vehicles as part of its 'Fit for 55' agreement.

This could help explain the systemic trend of declining or stagnant lubricant demand across Europe (see chart), even though the amount of vehicles on the road has increased by 12.5mn since 2018 (see chart). In particular, German annual lubricant demand has not recovered to pre-Covid levels with 2021 and 2022 lubricant demand lower by 167,000t and 155,500t than the 882,300t consumed in 2019. During the same time period, the share of EV cars in Germany increased from 0.9pc to 5.7pc. Likewise in Italy, post-Covid lube demand fell by 10,900t and 31,300t in 2021 and 2022 from the 381,000t consumed in 2019, while the share of Italian EV cars increased from 0.6pc to 2.9pc.

The situation is similar in the UK, where an increase in EVs at the expense of ICE vehicles has seen a decrease in lubricant demand since 2018.

The specter of a worsening economic situation and further falls in the share of ICE vehicles in Europe will probably continue to weigh on lubricant demand. There will probably also be a shift in demand towards Group III and Group III+ base oils for hybrid vehicles, away from Group I that currently comprise the majority of European output.

By Jeffrey Wang

Total vehicle in EU-27 100,000 vehicles

Lubricant Demand by Country t/yr