2020 was a record year for EV sales globally, against a backdrop of a declining overall vehicle market due to the global pandemic. According to EV-volumes.com, global sales of electric vehicles, including BEV (Battery Electric Vehicle) and PHEV (Plug-in Hybrid Electric Vehicle), totalled 3.24 million, 43% up on 2019, with global stock levels reaching 10 million, a stock share of 1%.

China remains the biggest market with an EV fleet of 4.5 million in 2020. However, it was Europe that was the driver of growth in 2020, accounting for 43% of global EV sales. New EV registrations totalled 1.4 million with a total market share of 10%, exceeding China for the first time that saw 1.2 million registrations (5.7% market share). This surge in European EV registrations reflect a number of policy measures. First, 2020 was the target year for the European Union’s CO₂ emissions standards that limit the average carbon dioxide (CO₂) emissions per kilometre driven for new cars. Second, many European governments increased subsidy schemes for EVs as part of stimulus packages to counter the effects of the pandemic.

Based on data from IEA, Germany saw some of the largest increases in EV registrations, up 254% in 2020 to just under 400,000, representing a market share of 13.5%. This expansion meant Germany became the second-largest EV country market after China. France and the UK also reported significant growth in sales up 198% (to 185,000) and 135% (to 176,000), respectively, representing market shares of 11.3% in both cases. While not a large volume market, Norway continued to have the largest market share of new EV sales in 2020 at 75% (106,000). This was followed by Sweden and the Netherlands, reporting EV market shares of 32% and 25%, respectively. Looking forward, the IEA forecast that China and Europe will continue to lead global EV markets through to 2030, with Europe set to become one of the most advanced EV markets. For example, the market share of new light-duty electric vehicle registrations could range from 40–80% by 2030.

This expansion in Europe will be supported in part by CO₂ fuel economy standards, goals that are being supported by a number of manufacturers. For example, some manufacturers, such as Volvo, have announced their intention to only sell EVs in Europe by 2030. This shift to EVs is further reflected in the increasing number of EV models available globally. In 2020 there were an additional 106 EV models brought to the market, up 40% on 2019 levels to total 368. With the IEA stating that 18 of the largest 20 manufacturers have committed to increase their offer and sales of EVs, this model count is set to increase further.

EV brands from Asia now looking to Europe

While the large manufacturers are expanding their EV offer, the growth in the EV market has also been supported by emerging EV only vehicle brands. Tesla is perhaps the most well-known of these, but we have seen brands such as Polestar and NIO launch in Europe in recent years. NIO is one of the first in a wave of EV brands from the Asia Pacific that are establishing a physical footprint in Europe via ‘showrooms’ in order to raise profile and drive sales. With the projected expansion in the European EV market, many more are expected to follow suit. For example, Savills has relationships with 23 EV only brands in Asia that operate with physical ‘showrooms’, but only four have expanded this offer to Europe to date.

Unlike traditional vehicle manufacturers, however, many of these EV brands are not looking to open conventional car dealerships or showrooms, tending to see location and the nature of the space as instrumental in communicating their brand to their target audience. As a result, the traditional car dealership locations do not necessarily appeal. This is even more pronounced for some of the aspirational EV brands as proximity to those consumers where the EV brand choice is determined by lifestyle choice is a top priority. This has materialised as a preference for flagship city centre locations in some cases. However, over the medium to longer term, as brands become more established, we could see demand expand to those more conventional locations that can offer more space and test driving capabilities.

What does this mean for Europe’s city centres?

While we expect to see more EV brands enter the European market, we don’t expect them to be major occupiers at a national level. Rather their impact is going to be more pronounced for key gateway cities and their flagship retail locations, as profile is going to be a key initial consideration for many of these brands. A requirement for larger spaces, in most cases, however, does present an opportunity for landlords where demand for large units amongst traditional high street occupiers has shrunk. For example, NIO’s Oslo space covers 2,000 sq m.

Perhaps, what is most interesting with the arrival of EV brands into our city centres is the fact that it further highlights the emergence of our retail destinations as ‘profile raising’ locations in which to showcase a brand and engage with consumers, rather than just a place to sell product. This is further evidenced by the arrival of other types of non-retail brands into our city centres; for example, TikTok ran a pop-up experience in London’s Westfield over the summer of 2021.

An analytic approach to location identification

For these new EV brands, the importance of proximity to target customers means a more research-driven and analytic approach to identifying suitable brand locations is needed. This is an approach Savills have developed and delivered to support site selection for a number of EV brand clients.

Key to the Savills approach has been understanding the brand vision of our clients and who their target audience is. With this insight, we have then worked with our clients to identify metrics that can be used to geographically identify target consumer clusters across a range of markets. For one EV brand client, we utilised this approach across Europe, firstly to shortlist target cities and then to identify areas within those cities that could be suitable ‘brand space’ locations due to the concentration of their target customers. This identification process was then utilised by our agents to investigate and deliver specific opportunities.