Electric Vehicle Sales Review Q2 2023 Foresight to drive the industry August 2023 This publication has been developed in collaboration between Strategy&, PwC’s global strategy consulting business, alongside PwC Autofacts’ Automotive industry and function experts. Together, we transform organizations by developing actionable strategies that deliver results. At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 152 countries with almost 328,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. www.pwc.com Strategy& 2 Executive summary BEV sales increase dwarfs overall market In almost all major markets, BEV sales grew far more than the total light vehicle market. In the ten Western European focus markets, BEV sales increased by 49% in the second quarter of 2023 in comparison with the equivalent period last year, whereas the total market grew by 17%. In the United States, the corresponding percentages were 67% and 19%, and in China 49% and 29%. In fact, the only major market analyzed in which BEV and overall powertrain sales growth were in any way comparable was in Italy, where the figures were almost identical (around 19.5%). Of course, BEV growth itself is responsible for much of the overall powertrain sales increase in many markets. When one compares BEV growth with the increase in sales of conventional ICE vehicles, the results are even starker (49% vs. 8% in the ten Western European focus markets, 49% vs. 20% in China, and 67% vs. 14% in the United States). The growth of each respective BEV market depends to a large extent on its maturity. Year to date, the BEV market in Norway has increased by just 2% compared to the same period in 2022. The apparent stalling of market growth is little surprise when one considers that BEV market share has already reached 83%. The reverse can be seen in BEV markets that have been slow to take off. For example, in India and Turkey, where BEV market share hovers at around just 2%, BEV sales grew by 139% and 341% respectively in the first half of 2023. Significantly, BEV market share in France, Germany and the UK, the three largest European markets, stands at around 16%, widely considered to be the inflection point at which mainstream consumers give serious consideration to a BEV purchase. Given that the momentum of BEV sales growth is therefore likely to increase, OEMs are positioning themselves to take advantage by offering discounts and new products. Unlike with BEV sales, the fortunes of the PHEV market have fluctuated markedly. Whereas PHEV sales decreased by 2% in the ten Western European focus markets in Q2 2023 vs. Q2 2022, they grew in China by 105%. PHEVs fall within the definition of the new energy vehicle (NEV) in China, and the purchase tax exemption for NEVs has now been extended for a further four years, to varying degrees. Strategy& The BEV market increased by more than half its size across all analyzed markets in one year 52% BEV sales growth across all 20 analyzed markets in Q2 2023 from the same quarter last year 3 1. News and highlights BEV market continues its steady drive into the mainstream OEMs look to seize station wagon opportunity Interest in the Micro BEV segment is maximizing Europe is the home of the station wagon, boasting almost two thirds of global sales in 2022 (1 million out of a global total of 1.5 million).1 Little wonder, therefore, that OEMs in the region are looking to offer electric versions, further evidence of the steadily growing electrification of the mainstream car market. Given the significant costs of the official approval process for standard passenger cars, OEMs and start-ups are becoming increasingly interested in developing light (L6) and heavy (L7) quadricycles as BEVs for city use. For OEMs, there is the added bonus that there are fewer requirements for these vehicles to be built with certain expensive safety equipment, such as crumple zones, airbags and radar sensors. Electric station wagons have a major advantage over SUVs, with superior aerodynamics improving their range and efficiency. The competitively priced MG5 and the much more high-end Porsche Taycan Sport Turismo are the only