By Michael Elkins
HSBC Global Research cut estimates for European battery electric vehicles for the first time, following a disappointing 1H22. With just 10% penetration, results are a long way away from the previous estimates for 18% penetration in 2022.
HSBC's new full-year BEV penetration estimate of 14% in 2022 still implies at least a 17% result in the 2H of this year. An estimation that assumes an improvement in semiconductor availability. The estimation cuts were extended to 2023 where HSBC now expects a penetration rate of 18%.
Global BEV penetration averaged 9% in the 2Q, a 1% improvement over 1Q's 8% and significantly higher than last year's 2Q result of 5%. However, European's cut results in a reduced global estimation from 11% to 9%.
China reached nearly 2m BEV units in the 1H22, almost double what Europe and North America produced combined. Analyst Edoardo Spina believes that the results were pushed by local incentives in 2Q to reach over 18% penetration, beating estimates of 17%.
Tesla (NASDAQ:TSLA), who remains the market leader with an 18% global BEV share, is starting to improve its share in China with the Model Y but VW remains behind. Chinese OEMs dominate the local market with BYD leading prominently in both battery electric vehicles and plug-in hybrid electric vehicles (PHE).
Spina believes that the path towards electrification faces some headwinds, including increasing electricity and metal prices. Aluminium, Copper, and Cobalt declined below 2021 levels, although they are still c40% above their 2019 averages. Lithium prices, however, remain 3Xs their peak in 2018. Spina believes public incentives are the key to supporting the future transition to electric transportation.