Article Type: Editor's Choice

The 2023 Autovista Group Residual Value Award winners

The inaugural Autovista Group Residual Value Awards crowned value-retention champions across eight different categories. These were based on segment, body type and powertrain groupings.

Autovista Group experts analysed data from 17 different European markets. Countries included Austria, Belgium, the Czech Republic, Finland, France, Germany, Hungary, Italy, the Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden, Switzerland, and the UK.

Relying on Autovista Group’s vast amount of data and expertise, the 2023 awards stood out to key automotive players such as carmakers, fleet managers and leasing companies.

Small Car category

The Mini was the overall winner in the Small Car category. The iconic vehicle competed for recognition as a residual value (RV) champion in a densely-populated segment.

Source: Mini

‘The Mini is an icon and a success story. Its strong used-car market performance is the evidence. It is proof that success can be achieved by authenticity, continuity, and a consistent brand strategy,’ said Dr Christof Engelskirchen, chief economist at Autovista Group.

The category winner was followed by the Audi Q2, Dacia Sandero, Volkswagen (VW) T-Roc and Mini’s own Countryman. The Mini was a wide-spread success, ranking in the top-five shortlisted models across Europe a total of eight times.

Small BEV category

The Jeep Avenger won in the Small Battery-Electric Vehicle (BEV) category. With a sizeable number of new all-electric models belonging to larger vehicle categories, these smaller BEVs are particularly exciting as attention turns to the mass market.

Source: Jeep

‘Given its approximate four-metre size, the Jeep Avenger is quite effective as a city car. It is small, even within the small crossover category, and yet it does not lose out when it comes to space and practicality. On top of this, the Jeep Avenger adds off-road ability and impressive handling, making it one of the most fun-to-drive small crossovers on the market,’ said José Pontes, data director at EV-volumes.com.

The Fiat 500e, the Dacia Spring-e and the Hyundai Kona all frequently appeared in the top-five lists of different countries. The 500e made the shortlist in 12 out of 17 countries, Dacia’s Spring-e is attractively priced, which helped it perform well, while the Kona was also a contender for the crown.

Compact Car category

The Compact Car Award went to the Mercedes-Benz CLA. Considering all powertrains within the C-segment and excluding SUVs, this competitive category was led by German brands.

Source: Mercedes-Benz

The pan-European results saw Mercedes-Benz take the top two spots with the CLA in first and the A-Class in second. Then came the BMW 2-Series in third, followed by the VW Golf in fourth. The BMW 2-Series Active Tourer followed up in fifth.

A total of 35 models made it into the top-five rankings in at least one of the 17 countries examined by Autovista Group experts. For example, the Cupra Born competed with the Toyota Corolla and the Mercedes-Benz B-Class with the MG4. But these cars did not make it to the overall European top-five ranking.

Compact SUV category

The Mercedes-Benz GLA won in the Compact SUV category. The vehicle came out on top in the highly-competitive C-SUV segment, which has seen rapid growth in recent years.

Source: Mercedes-Benz

‘The GLA from Mercedes-Benz is the standout model amongst the contenders in Europe and therefore a worthy Autovista Group Residual Value Award winner in the Compact SUV category,’ said Engelskirchen. ‘The vehicle performed well across all markets, but it features particularly strong value retention in Germany, France, and the UK.’

A total of 31 models made it into the top five ranking across all countries examined, with a mixture of high-end premium brands that market their cars at a budget price but still offer plenty to drivers. Amongst the European top five, it was the known brands that featured prominently. Mercedes Benz, Land Rover, Audi, BMW, and Dacia competed most successfully.

Compact and Large BEV category

The BMW i4 won in the Compact and Large BEV category. This award recognised all-electric models that often compete with SUVs in their market space.

Source: BMW

‘The sleek electric BMW is the brand’s first step towards beating Tesla in a game that once belonged to the Bavarian make. It provides the usual BMW strong points of engaging road behaviour and presence, while adding one of the best electric ranges in its class,’ Pontes commented.

The Porsche Taycan finished in second place, performing in line with the carmaker’s strong RV performance. Third place went to the Polestar 2, a model that has proven to be a success in the segment and a popular choice amongst BEV buyers. The Tesla Model 3 came next. While still considered a crucial model in the segment, the older BEVs RVs are starting to feel the effect of list-price reductions.

Compact and Large BEV SUV category

The Tesla Model Y won in the highly contested Compact and Large BEV SUV category. The best-selling all-electric car competed against strong European rivals in the top five shortlist.

Source: Tesla

Pontes described Tesla’s BEV SUV as a default choice in its segment. ‘A bit like the VW Golf in previous decades, you cannot go wrong with the Model Y,’ he said.

Runners-up in the category included the Skoda Enyaq, which achieved a top-five positioning in nine out of 17 markets. Other notable contenders were the Audi Q4 e-Tron Sportback, the Volvo EX90, and the VW ID.4, all of which boasted a strong RV performance.

Large Car category

The Mercedes-Benz V-Class was crowned the RV champion in the Large Car category, marking the third RV Award for the German carmaker, following the success of the CLA and GLA.

Source: Mercedes-Benz

‘The V-Class is the overall winner and performs particularly strongly in Germany, France, the UK and Switzerland,’ said Engelskirchen. ‘Although an electrified van, the EQV, is available, it could not steal the thunder from its diesel-powered sibling in this award category. Elegance, brand identity and versatility make strong sales arguments on both the new and used-car markets.’

The V-Class was not Mercedes-Benz’s only RV success story in the Large Car category. The luxury brand took second place with the C-Class and fifth place with the E-Class. BMW also performed well, with the 3-Series and 4-Series ranking third and fourth respectively.

Large SUV category

The Land Rover Defender won in the highly competitive Large SUV category. A star among its peers, the Defender carries over a strong brand identity from its predecessor.

Source: JLR

Known for its iconic silhouette, the design of the new Defender makes it look less rugged while maintaining a robust and pragmatic charm. The vehicle has proven to be one of JLR’s biggest success stories, helping create significant value for the brand and those who carry the asset risks for the model.

The Large SUV award category featured models from the D and E-segments, including all powertrain types. The Defender faced fierce competition, not least from German brands. Mercedes-Benz was a top contender among the top five finalists, with the GLE Coupé, the GLE SUV, and the G-Class ranking second, third and fourth respectively. BMW’s X6 also performed solidly, landing in fifth place.

The methodology

Rather than rely on a panel of judges, the Autovista Group Residual Value Awards tapped into the vast amount of data available to Autovista Group. By collating, calculating and analysing this information, the company’s experts were able to reveal this year’s winning models. Used-car market data from February to April 2023 was utilised with forecast trade residual values of 36-month-old cars at 60,000km.

To be considered, models had to fall between the 20th and 90th percentile of the selected category’s horsepower distribution. This was to prevent the creation of a league table that featured cars with extreme power outputs, thereby distorting the results of the analysis.

Vehicles also needed to occupy the space between an entry-level price point, and those at the opposite end of the affordability spectrum, such as extreme-sports variants. This resulted in a concentration on mainstream trimlines, avoiding vehicles at either end of the price scale.

Autovista Group analysts then went on to identify the version of each model with the highest residual value, expressed as a percentage of retained list price (%RV). For each available market, models were indexed by dividing their %RV by the average %RV in that category.

The RV awards were given based on a category’s average index across selected countries. This was then weighted against each market’s new-car sale volumes, so that extraordinary results from high-volume markets were represented in the final figures.

This content is brought to you by Autovista24.

High risks and high rewards of the agency model for new-car sales

Dr Christof Engelskirchen, chief economist of Autovista Group, discusses the implications of the agency model for new cars and whether the anticipated benefits outweigh the challenges.

All the disruptions that have tormented the automotive industry over the past three years have also served as an incubator for the digitalisation of the car-buyer’s customer journey. There is little debate that the new blueprint in car buying is omnichannel, with the desired customer journey between channels being truly seamless and the buying experience haggle-free.

Several automotive brands are on board with this view and are in the process of implementing the ‘agency model’ for their car sales and distribution. This either means transitioning existing dealer contracts into the new setup, possibly initially only in parts, or setting up this model from scratch.

In principle, under the agency model the carmaker takes over full ownership of the information, pricing, and contracting parts of the value chain. These parts will largely take place in an online environment. The ‘agent’ (previously dealer) maintains a physical environment for customer interaction, consults the buyer in the process, offers test drives, and deals with handover logistics. Only with a very clear differentiation around these roles can a truly seamless, haggle-free customer journey be established.

Roles of the carmaker/national sales company (NSC) and agent in the agency model

In the past, the carmaker was kept out of the loop on final offer prices and contractual arrangements. The customer relationship was held almost exclusively by the dealer. De facto, OEMs did not know who their customers were. The dealer negotiated the final price and bore the asset risks for demonstrator models, as well as either fully or partially for cars returning as part of leasing/PCP-finance arrangements. They also bore any default risk associated with their customers.

Agency model enables pricing discipline

Traditionally, OEMs have rolled cars off the production line and dealers have absorbed the volumes and sold them. At times of overcapacity, and with volume bonuses and dealers pooling supply, the consequences were often heavily discounted cars, which had negative implications for margins and residual values (RVs), which in turn again negatively impacted margins.

Under the agency model, manufacturers absorb the asset risks for all cars they produce as they are the contracting partner. They also have access to all the information that previously only the dealer had. An expected benefit for the OEM under the agency model is full control over pricing and discounts, which could result in lower new-car discounting. Low discounts are an impactful driver of superior RV performance of a vehicle and support OEMs throughout the virtuous cycle of high transaction prices à stable RVs à low subsidies in leasing contracts à positive bottom-line impact.

There exist numerous variations to agent roles and financial rewards. They receive a provision for every sale that they are involved in and receive demo cars for test drives. They could receive rewards for administering test drives, and when they hand over the car. They might get further kickbacks, for example, related to customer-service evaluations.

Changing relationships in the traditional (left) and agency (right) models

Substantial challenges for agency model

The agency model brings the OEM much closer to the customer, and enables them to apply pricing discipline, but there are substantial challenges around its application as well.

  • Carmakers’ balance sheets massively expand under the agency model, as they hold all assets until the sale. This problem becomes aggravated as the trend to leasing/PCP-finance arrangements is rising, adding more assets and asset risks to their balance sheets.
  • There is a palatable risk of the agency model resulting in a loss of entrepreneurial spirit for the dealer/agent.
  • Customer loyalty may now be built at an OEM level but is possibly lost at the agent level.
  • At times of low supply and high demand (seller’s market), it is easy to control and dictate prices for new cars; once supply pressures ease and we possibly transition towards a buyer’s market, the agency model might lack agility and flexibility. At the very minimum, it requires a build-up of staff, pricing intelligence, and powerful workflow solutions at OEM level.
  • Especially with hybrid models, where some cars are distributed via the traditional dealer model and some via the agency model, OEMs may risk margin as they bear new costs and investments, while not being able to fully benefit from anticipated efficiencies around the agency model.
  • Volume is at risk if cars are wrongly priced. With more and more OEMs adopting the agency model, price transparency and comparability rises. A non-competitive price position may result in a loss of a sale. Mainstream brands may be more exposed to this risk than premium brands, as they require a higher asset turnover.
  • There are new areas of conflict between OEMs and agents. The latter bears lower financial risks but still substantial ones. Should a sale not conclude because cars are priced wrongly, or the system is down, the agent’s profit and loss (P&L) is directly affected by this, as they cannot counter flexibly like in the past.

Risks and opportunities for the application of the agency model

Agency-model advocates expect it to be the only setup capable of truly enabling an omnichannel, seamless, and haggle-free customer journey. It is promising but objectively presents new and substantial challenges that are difficult and possibly expensive to tackle. As many of the world’s largest automotive groups roll out an agency model, there will be opportunities to evaluate whether it delivers the expected benefits.

This content is brought to you by Autovista24.

How lowering prices affects automotive electrification, brand image and residual values

When Tesla announced it would lower the list price of its models across the world, it caused a significant industry reaction. Autovista24 deputy editor Tom Geggus examines the potential effects with Dr Christof Engelskirchen, chief economist at Autovista Group, and Andreas Geilenbruegge, head of valuations and insights at Schwacke (part of Autovista Group).

Autovista24 · How lowering prices affects automotive electrification, brand image and residual values

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Show notes

Tesla turns up heat on rivals with global price cuts

Tesla to raise Shanghai output after price cuts stoke demand – memo

Ford to significantly increase production of Mustang Mach-E in 2023, reduces prices across the board

VW will not match Tesla price cuts for its EVs, CEO Blume says

Is now the time for cautious economic optimism?

Will phase-out of incentives threaten EV uptake in Germany?

How fast will Asian carmakers become part of Europe’s automotive landscape?

Synopsis

There are numerous reasons why manufacturers might lower the prices of battery-electric vehicles (BEVs). Firstly, their market share continues to rise. In 2022, registrations of BEVs closed in on those of diesel-powered models, with respective European market shares of 14% and 14.5%.

This is thanks in large part to early adopters investing in the technology. However, a tipping point will surely be reached as early adopters are all bought in, and the mass market needs to be satisfied. Alongside rising interest rates, ensuring BEVs appeal to a wider range of consumers with lower price tags makes sense.

Many media outlets signalled the beginning of a price war following Tesla’s announcement. Not long after, Ford lowered the price of the Mustang Mach-E in the US. However, not all carmakers were on board with this. Volkswagen (VW) Group’s CEO Oliver Blume refused to be drawn into battle.

Meanwhile, new brands from Asia are entering European markets, offering up affordable vehicles with advanced technology. This could also lead established brands to adjust list prices. However, these companies will also need to consider their brand image when lowering prices. If carmakers want to shift from the premium segment to the mass-market via new pricing strategies, the public perception will change in parallel.

Adjusted list prices will not only affect new vehicles though, as used models will also see a knock-on effect. Directly comparable models will see the biggest change in absolute residual values (RVs). This could include very-young used models, demonstrators, or rental vehicles. This impact will wash through to older models, just at a slower rate. ‘It is still the better strategy in terms of changing transaction price than offering high discounts,’ Engelskirchen explained.

This content is brought to you by Autovista24.

Mercedes-Benz and BMW push the range of their electric cars

Two automotive giants are pushing the ranges of their electric cars further than ever before. The ultra-efficient Mercedes-Benz Vision EQXX concept car recently completed a 1,202km journey on a single charge, travelling from the German city of Stuttgart to the UK’s Silverstone racing circuit.

Meanwhile, BMW is aiming to increase the range of its electric SUV, the iX, up to 600 miles (965km). To achieve this, the company has signed an agreement with energy-storage company Our Next Energy (ONE). As well as extending the range of the iX, ONE’s Gemini dual-chemistry battery will help reduce dependence on nickel, cobalt, lithium, and graphite.

Over 1,000km in one charge

Source: Mercedes-Benz

The Vision EQXX has managed to beat its own record run of 1,008km on one charge, set in April this year, driving while from Stuttgart to Cassis on the French Mediterranean coast. Raising the bar to 1,202km with its latest road trip, the research vehicle set out to prove the effectiveness of efficiency. The battery-electric vehicle (BEV) was able to achieve average consumption of 8.3kWh/100km, even when faced with heavy traffic and high temperatures of 30 degrees Celsius.

This was thanks in no small part to the thermal-management system, which is extremely small and lightweight, as the electric drive generates minimal waste heat. Aero shutters, coolant valves, and pumps ensured an efficient temperature balance at a minimum energy cost. The Vision EQXX uses a cooling plate in the floor as well as the airflow under the BEV to stay cool.

‘Yet again, the Vision EQXX has proven that it can easily cover more than 1,000 km on a single battery charge, this time faced with a whole different set of real-world conditions,’ said Markus Schäfer, member of the board of management of Mercedes-Benz Group, chief technology officer responsible for development and procurement.

‘As Mercedes-Benz strives to go all-electric by 2030 – wherever market conditions allow – it is important to show to the world what can be achieved in real terms through a combination of cutting-edge technology, teamwork and determination,’ Schäfer added.

Past meets future

Source: Mercedes-Benz

The electric car’s 1,202km journey was no mean feat. Travelling along Germany’s autobahn, across the French border near Strasbourg, down northern France to Calais, the Vision EQXX boarded the Eurotunnel. From there it journeyed around London, stopping off at the Mercedes-Benz Grand Prix headquarters in Brackley. Waiting for it there were the Formula 1 and Formula E experts who helped develop its drivetrain.

Then it was on to Silverstone, to meet Mercedes Formula E world champion Nyck de Vries. He took the car for 11 laps of the circuit, using the last of the charge on the pit lane. The racer did not go easy on the research vehicle, taking it up to its maximum speed limit of 140kph.

‘The Vision EQXX was a true pleasure to drive. I know what this team is capable of, and it was a real honour to drive such an amazing car on such a historic track,’ said de Vries, adding: ‘And I can tell you that the interior is definitely a lot more luxurious than the cockpit of a Formula E car.’

While the journey is impressive, the efficiency of the Vision EQXX stands as a testament to what is possible with a BEV. Driving for 14 and a half hours over two days, achieving an average speed of 83kph, the design of the efficient electric car illustrates what might one day be possible for mass-production models.

Greater range and sustainability

When it comes to consumer-ready electric cars, BMW’s iX entered production in July last year at its Dingolfing plant. The official WLTP range of the standard xDrive 40 version is 425km. However, with the help of ONE, the carmaker hopes to boost the iX’s range up to 965km. With a prototype vehicle expected at the end of the year, there might not be long to wait.

‘We are confident that given economic viability, this can lead to commercial opportunities and strategies to integrate ONE’s battery technologies into models of our future BEV product line-up,’ said Jürgen Hildinger, BMW Group new technologies head of high voltage storage.

But it is not just the range where ONE’s battery looks to benefit the model. Given the importance of keeping BEVs sustainable, the Gemini dual-chemistry technology reduces lithium use by 20%, graphite use by 60%, as well as the need for nickel and cobalt.

 ‘As EV adoption grows, drivers are learning that real-world conditions can significantly reduce the performance of their batteries. Common situations like maintaining highway speeds, winter temperatures, climbing mountains, towing, or a combination of all four things present challenges to electric vehicles. We plan to pack twice as much energy into batteries, so EVs can easily handle long-distance driving in real-world conditions,’ commented Mujeeb Ijaz, founder and CEO of ONE.

Hyundai plans future-mobility experiences via the metaverse

As part of its expansion in the metaverse, Hyundai has announced plans to provide future-mobility experiences in its virtual Motorstudio with the Zepeto metaverse platform.

The digital world is operated for Hyundai by Naver Z, with the Zepeto platform providing a virtual space where users can interact with each other by participating in various activities, using avatars. This interactivity between users is what sets the metaverse apart from virtual and augmented realities, blending both into a digital world.

Hyundai introduced its first virtual Motorstudio within Downtown (Future) on Zepeto last year and is now adding a second floor of exhibition space with more advanced activities. There is a set of future-mobility experiences, including S-A1 advanced air mobility, S-Link purpose-built mobility, and the S-Hub future-mobility transit centre.

In the first floor’s exhibition hall, which replicates the interior and exterior of Hyundai Motorstudio Seoul, Zepeto users can watch the campaign film for Hyundai’s Ioniq battery-electric vehicle brand, featuring ‘I’m On It’ by Korean pop-group BTS. They can also see posters for the Hyundai x BTS Earth Day campaign ‘For Tomorrow, We Won’t Wait.’ In the second floor’s exhibition hall, visitors can get S-A1 miniatures and try on or purchase Hyundai’s eco-friendly upcycled clothing collection, Re:Style.

Taking customers digital

Hyundai is heavily invested in the future of mobility through the metaverse. The digital world has grown in popularity since the COVID-19 pandemic, giving users an opportunity to escape to a virtual reality. However, the carmaker has been investing in metaverse development for several years.

In Downtown (Future), Zepto users can experience various future-mobility solutions originally announced by Hyundai at CES 2020. They can tour the S-Hub future-mobility transit centre, ride the S-A1 urban air-mobility vehicle, and experience three concepts of S-Link purpose-built mobility, including a clinic, party room, and food truck. 

In June last year, Hyundai Motor provided the Sonata N-line test-drive experience in the virtual space for the first time in the automotive industry in collaboration with Zepeto. The company has also continued to communicate with millennials and the Gen-Z generation by providing virtually-interactive content such as the ‘Hyundai Mobility Adventure,’ showcasing the future-mobility lifestyle within the metaverse platform, Roblox, since last September.

‘To build strong and long-lasting relationships with young generations, Hyundai Motor is creating virtual experiences where they can become familiar with our brand vision and future-mobility solutions,’ said Thomas Schemera, Hyundai Motor’s global chief marketing officer and head of the Customer Experience Division. ‘We will continue using virtual reality platforms to communicate our brand vision with new virtual spaces and content. So, please join us in the metaverse.’

The metamobility concept

At CES 2022, Hyundai unveiled the ‘mobility of things’ during its presentation. The carmaker sees the future of mobility taking place in the metaverse. This lets users control a ‘digital twin’ to interact with objects, people or pets in real life from hundreds of miles away, controlling avatars in the metaverse.

The concept also sees cars as ‘smart objects’ that allow users to access the metaverse. Hyundai believes that in the future, thanks to autonomous technology, vehicles can expand to become office spaces, gaming zones or relaxation booths. While travelling, occupants can access the metaverse and immerse themselves in a different reality to benefit their needs.

To find out more about how the automotive industry is embracing different realities via digital platforms, listen to the latest episode of the Autovista24 podcast.

Kia reveals Niro Plus as purpose-built electric vehicle

Kia is positioning itself as a sustainable mobility-solutions provider and has recently launched its first ‘purpose-built vehicle’ (PBV), the Niro Plus. The electric vehicle (EV) will be used as a zero-emission taxi in South Korea, with the carmaker expecting the model to form an important part of future transportation.

The company wants to roll out a dedicated lineup of PBVs by 2025, aiming to become a market leader in this segment by the end of the decade. Until then, the manufacturer will modify existing models for specific purposes.

The Niro Plus has been specifically tailored to taxi and ride-hailing operators, but it can also be used as a regular model for private consumers for recreational purposes, including camping trips. Kia first revealed the all-new Niro at the 2021 Seoul Mobility Show in November 2021. 

A non-taxi version of the Niro Plus will be available in select overseas markets in the second half of 2022. The car will be offered as a battery-electric vehicle (BEV), a plug-in hybrid (PHEV) and hybrid (HEV).

To show Kia’s commitment to more environmentally-friendly car production, the electric vehicle uses sustainable materials developed from recycled wallpaper, eucalyptus leaves, and water-based paint. Kia intends to expand the range of eco-friendly materials, including plans to phase out animal leather in all vehicles.

New mobility products

‘Kia is transforming its business strategy to focus on popularising EVs and introducing new mobility products that are tailored to the needs of users in markets around the world,’ said Sangdae Kim, head of Kia eLCV business division. ‘The Niro Plus is our first step into the world of PBVs, a market that holds great potential for future development.’

The introduction of the Niro Plus follows the launch of the Ray Van in February, which has been described as South Korea’s first single-seater van designed to meet the growing demand for small-cargo delivery services.

Kia’s first dedicated purpose-built vehicle in 2025 will likely be a mid-sized vehicle, with the Niro Plus helping Kia transition to an eco-friendlier mobility provider. The COVID-19 pandemic has increased demand for delivery and logistics services, with Kia aiming to grow its range from micro to large PBVs that can offer an alternative to public transportation. The carmaker even envisages its vehicles to serve as mobile offices.

Based on the first generation of the Niro crossover EV, the Niro Plus taxi model features additional enhancements. The length and height of the Niro Plus taxi model have increased by 10mm and 80mm respectively. The cabin space is larger, thanks to slimmed-down structures and thinner seats. The all-in-one display has also been improved, with Kia planning to offer over-the-air (OTA) updates and services.

Ocean clean-up

As part of Kia’s aim to become a sustainable-mobility provider, the carmaker has also signed a seven-year partnership with green NGO The Ocean Cleanup, which is developing technologies to remove plastics from the world’s oceans.

The partnership is one of Kia’s corporate strategies to drive sustainability efforts, with the carmaker aiming to increase the percentage of recycled plastic to 20% by 2030.  Kia will provide financial support to the NGO, backing ocean and river clean-up projects. Retrieved plastics will then find their way into Kia products.

‘Plastic is not inherently a bad material, but we must use it responsibly,’ said Boyan Slat, founder and CEO of The Ocean Cleanup. ‘We provide proof that recycled plastic can be used sustainably.’

Kia’s parent company Hyundai is supporting similar causes. The carmaker has partnered with green organisation Healthy Seas to tackle marine pollution, planning to use the nylon found in recycled fishing nets to equip vehicles with more sustainable products.  

The new Volvo C40: a beauty and a beast

Autovista24 principal analyst Sonja Nehls took the new Volvo C40 Recharge for a test drive and had a closer look at its remarketing potential.

Volvo introduced its first electric-only vehicle, the Volvo C40 Recharge, with a 231hp single-motor and a 408hp twin-motor all-wheel-drive variant. While the components are known from the XC40 Recharge and the Polestar 2, the C40 sports a different body style, with a sloping roofline and SUV characteristics lending a dynamic crossover look.

The Volvo C40 Recharge sports a steep list price, but with comprehensive standard equipment. It has high energy consumption but can compensate range issues with a sufficiently large battery and a 150kW DC charging capacity. It combines an emotional and sporty design with powerful motors, especially when considering the twin-motor variant. The lean interior and the comfortable ride work well in everyday driving and there is enough space for a small family.

Volvo C40 Recharge remarketing potential

Remarketing upsidesRemarketing downsides
A simple line-up offering with comprehensively-equipped trim lines and limited options ensure transparency and well-equipped models for the used-car market.The C40 Recharge comes at a high cost, about 7% above the Polestar 2 and only 5% below an equipment-adjusted Mercedes-Benz EQA.
The C40 recharge features good quality materials overall, as well as a decent fit and finish with small exceptions, e.g. use of hard plastics on the door panels.High-energy consumption, almost 20% above the Mercedes-Benz EQA. Only one charging cable (Mode 2 or Mode 3) is standard in some markets, e.g. Germany.
The C40 combines the best of many worlds:
* An emotional yet classic design
* Enough room for a small family
* A fun-to-drive and engaging BEV performance
* Thanks to its clean interior and its smoothly working infotainment and assistance systems, it also does well for everyday use or in urban environments.

The C40 is Volvo’s first electric-only model while its twin XC40 is also available as a plug-in hybrid (PHEV) or petrol version. Apart from the motor line-up, the roof is the main difference between the models, but it does make a huge difference. The coupe-like rear lends an emotional and sporty appeal. It matches nicely with the power of the 231hp single motor and the impressive 408hp and 660Nm torque of the all-wheel-drive twin-motor variant. When discussing which of the two body styles will be the more popular, Autovista colleagues from various countries agreed that the XC40’s SUV style wins the race due to its practicality advantage.

However, Johan Trus, Autovista Group’s chief editor in Sweden, added that ‘the coupe-like rear has become a common trait for many battery-electric vehicles (BEV) and customers associate it with a BEV’. The C40 might not be too far behind the XC40 when it comes to volumes. Ev-volumes.com forecasts 10,700 sold units in Europe in 2022, increasing to 17,900 in 2026. At an estimated fleet share of a least 50%, assuming an average list price of €57,000 and an average residual value (RV) of 55% this results in an annual European remarketing volume of €170-€270 million.

At 4.44m long, the C40 sits below other BEVs, such as the Tesla Model Y or Model 3, Volkswagen ID.5, Hyundai Ioniq5 or Kia EV6 and better compares to the Mercedes-Benz EQA, the upcoming Kia Niro or the Lexus UX e. The more sedan-like Polestar 2 shares technology with the C40, but is 17cm longer and 7cm lower.

Specifications and dimensions versus main rivals

Click to expand (opens in new tab)
Source: Autovista Group specification data

The 67kWh battery on the single-motor C40 is among the larger ones, which partly compensates for the highest energy consumption value of 18kWh per 100km and contains a major impact on range. The C40 can also mitigate higher-energy consumption with its 150kW DC charging capacity, whereas Kia only offers 80kW and the Mercedes-Benz EQA can do 100kW. Tesla’s 250kW remains the benchmark.

BEV specifications versus main rivals

residual vehicle
Click to expand (opens in new tab)
Source: EV-volumes specification data

A comparison with the sibling models demonstrates the impact of body styles. The XC40 Recharge SUV consumes 19kWh per 100km and for the lower-built Polestar 2, 16.7kWh is sufficient.

Complete standard equipment comes at a price

The Polestar 2 comparison is also interesting from a list-price perspective. While Polestar started off as the premium brand, the XC40 and now the C40 come at a comparable or even higher list price. The Polestar 2 starts at €46,495 in Germany and the long-range dual-motor version starts at €50,970. The C40 list prices range between €48,850 and €61,880.

A part of this is offset when doing an equipment-adjusted price comparison, as the Volvo benefits from an almost complete standard equipment depending on the trim, while for the Polestar you can add another two packages at €7,000. Still, a top trim C40 is 7% more expensive than the Polestar 2, including the two additional packages.

To get a better overview of how expensive the Volvo C40 Recharge is in relation to its comprehensive standard equipment and compared to its rivals, it is necessary to configure the models like for like, as far as is possible. The below example shows the situation on the UK market.

Equipment-adjusted price comparison

Source: OEM configurators
Note: S= standard equipment, prices given refer to cost of a pack or single option

For the sake of a reasonable comparison, the C40 was selected in Ultimate trim, which is the fully-equipped top version. The medium trim Plus does not include – or offer as an option – a rear parking camera or other crucial features from an RV-perspective and was therefore not eligible.

Comparable versions of the other models also feature comprehensive standard equipment, with the table above showing the main differences. The C40 began as the second-most expensive, 1% cheaper than the EQA and 1% more expensive than the considerably larger VW ID.5. After equipment adjustment, it improves its positioning to be 5% below the EQA and 3% below the ID.5. However, the Polestar 2 still finishes 4% cheaper than its sibling in this comparison of the single-motor versions.

Volvo’s premium ambitions are revealed in the pricing policy, which might pose an obstacle to customer acceptance and sales success. Also, from an RV-perspective, the high list prices negatively impact %RVs and lead to stronger depreciation.

The Swedish perspective

‘The situation for Volvo in Sweden is a bit different to the other European markets as the premium ambition has to align with maintaining a leading sales position in the domestic market,’ Johan Trus pointed out.

It is therefore even more surprising to see how expensive the Volvo C40 is in comparison to the Polestar. Johan regularly observes and compares leasing offers from independent providers and both, the C40 and XC40, are about 10% more expensive than the Polestar. With this price positioning, it will be interesting to see what sales volume the C40 will be able to claim in the Swedish market.

New-car registrations in Sweden, battery-electric vehicles, April 2021 to March 2022

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Between April 2021 and March 2022, the XC40 Recharge stayed 36% behind the Polestar 2 and was the 11th best-selling BEV in Sweden. The main surprise as to registration volumes is the MG ZS EV in fifth place. With the growing share of private leasing and a strong dealership backing the brand, MG managed to achieve this major success and ‘people are willing to give new brands a try, in particular when they do not have to carry any risk’ said Trus.

Residual-value expectations

RV forecast values for 36-month-old C40s are lowest in Germany (€22,400-€27,950) and reach values up to €38,110 (SEK 392,310) in Sweden. While the XC40 performs on a comparable level in almost all countries, it has a 10pp advantage in the UK. The Polestar 2 achieves stronger absolute as well as relative RVs in Germany, Sweden and the UK, one reason being the advantageous list-price positioning.

Volvo C40 Recharge RV forecast, 36mth/60kkm, March 2022

Open the interactive dashboard

The Mercedes-Benz EQA can leverage its domestic-brand advantage in Germany, achieving the strongest absolute RVs. It also performs strongly in the Netherlands and the UK, while Volvo and Polestar dominate the basket in France and on the home turf in Sweden.

Volvo C40 Recharge RV forecast versus competitors, Sweden, 36mth/60kkm, April 2022

Open the interactive dashboard

The interactive launch intelligence dashboard provides a cross-country overview of the RV ranges in Germany, France, the Netherlands, Sweden, and the UK. A basket comparison benchmarks the Volvo C40 Recharge against the XC40 Recharge, the Polestar 2, and the Mercedes-Benz EQA.

A beautiful beast

Travelling with an electric vehicle requires more planning and without a doubt you will constantly think about the state of charge, the available infrastructure and if the plug-in point will be able to communicate with one of the many apps on your phone and your car.

My experience during an extended test drive was that once I found a suitable fast-charger, the C40 can charge at up to 150kW and the process worked smoothly. The range prediction of the Google navigation system in the C40 was spot-on and concerns around range and charge points faded.

The Volvo C40 Recharge lets drivers enjoy the brutal acceleration and fun driving experience of a powerful electric vehicle, and is also a good partner for less energy-consuming everyday driving. It is a beauty to look at and a beast for those who want one, but it can easily be tamed.

Are tyre particulates the next big environmental problem?

Vehicle particulates do not just come from the emission system. Tyres also create fine particles that can affect the environment, cause air pollution and create health problems. Yet unlike emissions, there is no easy way to manage tyre particulates. Autovista24 editor Phil Curry and deputy editor Tom Geggus discuss the problem with particulates, the role of electric vehicles, and solutions the automotive industry is working on.

Show notes

ADAC: Tyre wear particles in the environment

RAC: RAC moves to set record straight over Eustice’s remarks that the gains from electric cars ‘may be less than some hope’

Hankook: Hankook iON: new global family of tires for electric vehicles promote sustainable mobility

Continental: Continental Launches AllSeasonContact with Best Rolling Resistance Grade

Mercedes-Benz: Mercedes-Benz VISION EQXX demonstrates its world-beating efficiency in real world driving

Fit for 55: European Union to end sale of petrol and diesel models by 2035

Are EVs as green as they seem?

Audi develops filters to trap tyre particulate matter

UK government: Emissions of air pollutants in the UK – Particulate matter (PM10 and PM2.5)

Episode synopsis

The issue of particulate matter is not solely the problem of emission systems. Any parts that create friction are susceptible to producing fine particles that can impact air-pollution levels or harm the environment. In this respect, tyres are a big part of the particulate problem and have been since the inception of the car over 100 years ago. For vehicle sustainability to continue, tyre wear must be a factor in automotive research.

However, unlike the emissions system, there is little that can be done to halt the creation of particulates. Instead, tyre suppliers and car manufacturers are doing their best to slow their creation, while drivers too have an important role to play.

According to German vehicle-testing agency ADAC, around 500,000 tonnes of particulates are created by tyres each year in Europe. These range from 10 microns in size to 2.5 microns – an atmospheric size.

The electric-vehicle problem

Carmakers are shifting their focus away from internal-combustion engine (ICE) cars to electric vehicles (EVs). One reason for this is the issue of air pollution, a matter that increased after the Dieselgate scandal. This saw a lot of attention around the subject of particulates, especially nitrogen oxide (NOx) pollution. The decline in the diesel market meant drivers moved towards petrol models, creating a problem with CO2 emissions that the car industry was trying hard to avoid.

But electric cars have their own part to play in tyre particulate matter creation. They are often heavier than standard ICE counterparts, and this places more pressure on the tyres. This, in turn, creates more friction with the road surface, and therefore more wear. Electric-vehicle sustainability is not, therefore, reliant on its zero-emission capabilities alone.

The UK’s environment secretary George Eustice recently highlighted to MPs that it is unknown how far switching from ICE to EVs will help. ‘There is scepticism,’ he said. ‘Some say that just wear and tear on the roads and the fact that these vehicles are heavier means that the gains may be less than some people hope, but it is slightly unknown at the moment.’

In answer to this, one of the country’s automotive organisations, the RAC, commissioned a report from battery electrochemist Dr Euan McTurk. He used real-world findings to explore the actual impact of electromobility on tyre and brake wear.

RAC EV spokesperson Simon Williams said: ‘George Eustice’s remarks about EVs not being as green as some may think were very unhelpful and could put some drivers off making the switch to zero-emission driving. There are far too many negative myths surrounding electric cars which need to be busted as soon as possible in order to speed up the electric revolution.’

Tyre-particulate filters

One solution to the particulate problem is to filter them away from the environment. For emissions systems on petrol and diesel cars, this is done with a particulate filter fitted in line on the exhaust system. However, it would be difficult to fit a filter to a tyre, while the potential of a suction device behind the wheel is limited due to restricted space and constantly moving objects.

Therefore, fitting filters to areas where particulates can enter the environment, such as around the drainage system to prevent ingression into water supplies, is something that could help reduce the problem. This is the thinking of German carmaker Audi who, together with the Technical University of Berlin, is developing tyre-particulate filters to help protect the ecosystem.

The Urbanfilter can be combined individually depending on the road and traffic situation. They trap the particles as close as possible to the location of creation – before rainwater can rinse them into the sewers. Laboratory and field testing has shown the filters are effective, but can they work together to solve the issue of tyre particulates?

Tesla signs major lithium supply deal

Australian lithium producer Core Lithium has signed a supply deal with Tesla. The Northern Territory-based company will provide 110,000 tonnes of lithium-concentrate to the US-based carmaker over a period of four years.

The binding term sheet will specifically see lithium spodumene concentrate from Core’s Finniss Lithium Project make its way to the battery-electric vehicle (BEV) manufacturer as a crucial component in the manufacturing of Tesla’s vehicle batteries.

Core Lithium’s supply to Tesla is scheduled to get underway in the second half of 2023, winding up four years later in 2027, or after the equivalent of up to 110,000 dry metric tonnes of lithium=concentrate has been delivered.

In addition to the supply deal, Tesla has confirmed that it will support further expansion of Core Lithium’s Finniss Project, located near Darwin, Australia. Core Lithium owns 100% of the project, which hosts JORC 2012 compliant mineral resources of 15 million tonnes (Mt) at 1.3% lithium oxide (Li20), and Tesla’s input into the project will focus on development of lithium chemical-processing capacity.

‘Core Lithium are thrilled to have reached this agreement with Tesla and look forward to further growing this relationship in the years to come,’ confirmed Core Lithium managing director Stephen Biggins. ‘Tesla is a world-leader in electric vehicles (EVs) and its investment in offtake and interest in our expansion plans for downstream processing are very encouraging.’

Another Australian-related lithium producer branches out

Last year, Core Lithium was awarded Major Project Status for the Finniss Project. The approved status equates to extra help from the Major Projects Facilitation Agency, including a single-entry point for Australian government approvals, project support and coordination with state and territory approvals.

Commenting on the approval of Major Project Status for the company, Federal minister for Resources, Water and Northern Australia, Keith Pitt MP stated: ‘This project will be able to supply markets in Asia and Europe with critical minerals, and will have the potential to increase downstream processing, increasing supply chain diversification. This is exactly the type of project that our government wants to see, as we build on our resource-rich history for the decades ahead.’

In July 2021 Core Lithium strengthened its ties with European EV production by becoming a member of the European Battery Alliance, and they are not the only Australian-affiliated concern providing lithium resources for the boom in EV production across the globe.

German-Australian lithium developer Vulcan Energy Resources has signed multiple agreements with carmakers and automotive-related concerns over the last 12 months. Since late 2021, Vulcan has inked lithium supply deals with major carmakers such as Renault, Sellantis, and Volkswagen Group.

Earlier this year, Vulcan linked up with chemical producer Nobian, signing an agreement to assess the feasibility of producing lithium-hydroxide from lithium-chloride in Germany, as the European Union (EU) and governments across the world are looking to find ways to enhance and improve the lithium supply chain. This action is necessary, as the demand for EVs increases in many markets and therefore carmakers are reliant on sustainably-sourced minerals for battery production on a larger scale.

European new-car market could need decade to recover but electric cars will dominate

Autovista24 senior data journalist Neil King considers the outlook for the European new-car market and the pace of electrification.

New-car registrations in Europe – encompassing the EU, the UK, and the European Free Trade Association (EFTA) markets of Iceland, Norway, and Switzerland – plunged by an unprecedented 24.3% year-on-year in 2020. As the industry contended with ongoing restrictions and semiconductor shortages in 2021, the market tumbled by a further 1.5%. This equates to a contraction of 25.5%, or more than four million cars, compared with 2019.

Autovista24 expects car component supply bottlenecks to ease throughout 2022, especially during the second half, although it will take time to filter through to registrations and clear the backlog. Predicated on this assumption, year-on-year growth of 7.6% is forecast for the European new-car market in 2022, followed by 9.4% in 2023.

The new-car sector is not expected to return to the pre-pandemic level of 2019 until 2031, with modest downturns incorporated into the forecasts for 2025, 2030, and 2035. Demand for new cars is expected to be pulled forward from these years as governments and manufacturers alike strive to meet a 25% reduction in CO2 emissions in 2025, and 55% by 2030, as per the European Commission’s ‘Fit for 55’ proposals. For 2035, the CO2 reduction target is set at 100%.

Although this presents a rather gloomy picture of slow recovery from the COVID-19 pandemic and supply shortages, there is positivity as 2020 may also be remembered as the year that electromobility gained traction. The new-car market may not return to pre-pandemic levels by the end of the decade but electrically-chargeable vehicles (EVs) are forecast to capture more of the market than internal-combustion engines (ICE) and hybrid-electric vehicles (HEVs) combined.

Downside risk from Ukraine

There is a new downside risk to this forecast, however, following the Russian launch of military action in Ukraine on 24 February. Fuel and gas prices are already reported to have risen sharply, which will add to the inflationary pressure on household budgets if they remain at high levels.

In one scenario, Russia will only occupy separatist regions and the conflict will not escalate further than this. Eastern European countries such as the Baltic states, Poland, and Romania, might be affected by the uncertainties around the Russian aggression, with a dent in economic growth. This would not have a lasting impact on new-car markets in Western Europe, however, given the ongoing supply shortages. Lower demand for cars in Russia and Eastern Europe could even relieve supply pressure elsewhere.

In a second scenario, Russia could seek to occupy all of Ukraine, which would entail greater sanctions than in the first scenario. Eastern European markets will be negatively affected as they are more dependent on economic relations with Russia. Very little impact is expected on new-car markets in Western Europe, and the EU could even lower its emissions targets or extend the timelines to achieve them.

2020 switch to electromobility

While the European automotive sector suffered a significant contraction in 2020, not all fuel types were affected equally. Although the year will be remembered for the COVID-19 pandemic, it may also go down in history as the year the industry turned towards electromobility.

Registrations of new petrol and diesel cars fell significantly in 2020, according to ACEA, the European carmakers’ association. However, the two fossil fuels still commanded a 74.1% market share, albeit down from 88.8% in 2019. Diesel declined by 35.3% year-on-year with its full-year market share dropping to 26.2%, from 30.4% in 2019. Meanwhile, demand for petrol vehicles fell by 37.5% to below 5.8 million units. This translated into a market share of 48.2%, down from 58.4% in 2019. 

All types of electrified vehicles experienced higher sales in 2020, along with significant market-share growth. Hybrid-electric vehicles (HEVs) made up 12.7% of the market, up from 6.1% in 2019. Following closely behind, EVs accounted for 11.4% of the new-car market, compared to just 3.5% in 2019. Registrations of battery-electric vehicles (BEVs) more than doubled in 2020, while market share increased from 2.3% to 6.2%. Registrations of plug-in hybrid electric vehicles (PHEVs) more than trebled, with their share of the market rising from only 1.3% in 2019 to 5.2% in 2020.

ACEA has pointed to government incentives as being largely responsible for the meteoric rise in BEV and PHEV sales in Europe during 2020, which increased by 107% and 211% year on year, respectively. Germany is a prime example of generous incentives equalling strong growth, with BEV and PHEV registrations surging by 206.8% and 342.1%.

Electrification drive in 2021

The demise of ICE cars and the transition to EVs continued in 2021, albeit with lower year-on-year growth rates. This is despite the comparative stability of the market after the unprecedented decline in 2020. Both drivers and carmakers benefitted from increased incentives as governments across the region looked for ways to meet strict emissions targets. Manufacturers have also sought to supply as many EVs as possible throughout the semiconductor crisis, which has had a dramatic impact on car production. This has been essential for them to meet their European emissions targets, especially as these targets now apply to every new car registered in 2021, as opposed to 95% in 2020.

BEV registrations increased by a further 63.4% last year, to exceed 1.2 million units, according to ACEA. PHEV registrations enjoyed slightly higher growth, climbing 68.5% to over one million units. HEVs performed almost as well, gaining 58.5%. These significant double-digit growth rates are in sharp contrast to the 17.4% and 33.1% respective declines in the volume of registrations of petrol and diesel cars. 

BEVs and PHEVs accounted for 10.3% and 8.9%, respectively, of European new-car registrations in 2021. Accordingly, EVs gained a share of 19.2%, just below the 20.5% share achieved by HEVs, but ahead of the diesel share of 17.6%. Nevertheless, petrol remained the dominant fuel type in Europe last year, accounting for 40.4% of the market.

Note: BEV share includes hydrogen fuel-cell electric vehicles (FCEV)

Forecasting uncertainty

Looking to the future, the European Commission’s plans for an effective ban on the sale of new fossil-fuel vehicles (including HEVs and PHEVs) from 2035 means both OEMs and governments need to transition quickly to zero-emission vehicles (ZEVs), namely BEVs and FCEVs.

Carmakers across Europe have stepped up the pace in introducing more battery plants to meet the rising demand. Governments, on the other hand, will need to fund purchasing incentives and an expansion of the car-charging network, especially as many countries are considering whether to end ICE sales before 2035. The UK, for example, plans to end the sale of ICE cars in 2030.

Forecasting how much market share EVs will gain in Europe is marked by uncertainty due to issues, such as the need to introduce appropriate charging infrastructure and industrial policy, which includes government subsidies and CO2-emissions fines. Other challenges include a need for more technological innovation, rising fuel prices, and consumer acceptance.

Autovista24 predicts that the EV share of the European market will rise to 23% in 2022, before jumping to 34.5% in 2025 and 57% in 2030. In line with the anticipated market corrections in 2025 and 2030, spikes are assumed in the EV share. By 2035, the expectation is that all European countries will have ended ICE passenger-car sales and the market will essentially be a two-fuel race between BEVs and FCEVs.

Note: BEV share includes hydrogen fuel-cell electric vehicles (FCEV)

Forecasts have been constantly revised upwards in recent years because of new developments, such as the 2021 Paris Climate Agreement, stricter emissions targets, COVID-19, and rising fuel prices. They have led - and will continue to lead - to a quickening of EV adoption. 

But most countries still have a long way to go. Of the 30 European countries tracked by ACEA, only Norway has excelled with EVs accounting for 86.2% of the market in of 2021. Iceland came in second at 54.7%, but the big five markets are lagging far behind (France 18.3%, Germany 26%, Italy 9.4%, Spain 7.8%, and UK 18.5%).

How could Russia’s invasion of Ukraine impact the European automotive industry?

With Russia escalating its aggression towards Ukraine into an invasion, severe sanctions are inevitable. Depending on how the situation plays out in the coming weeks or months, the European automotive market will see an impact as well. In this special episode, Autovista24 editor Phil Curry, Autovista Group chief economist Christof Engelskirchen, and Autovista Group director of valuations Roland Strilka discuss the possible scenarios for the industry.

You can listen and subscribe to receive podcasts direct to your mobile device, or browse through previous episodes, on Apple, Spotify, Google Podcasts and search for Autovista24 Podcast on Amazon Music.

Episode synopsis

The escalating situation between Russia and Ukraine, which has seen the former send troops across borders and launch air and sea attacks, has the potential to destabilise many markets, including automotive.

Further sanctions are inevitable, and they will be severe. This will have an economic impact, not just on Russia but also those countries declaring them. They may include a ban on exports of high-technology into Russia, which will also impact the companies that trade in this field.

While there are already some impacts of the escalation being felt, such as an increase in the price of oil and energy, other issues will take moretime to unfold. There are two possible scenarios, and each has a differing influence on the automotive market.

In the first scenario, where Russia largely retracts to the separatist regions of Donetsk and Luhansk without conflicts escalating much further, there will be no lasting impact on Europe’s new-car markets, other than the Russian market, as there is an ongoing supply shortage. Lack of supply into Russia can be compensated by selling to other countries.

There will, however, be a small impact on used-car markets, as there might initially be a slight dent in demand for cars, in particular in Eastern Europe, but this will be short-lived in this scenario, especially since weakened exchange rates support current residual values

Most severe

The second scenario sees Russia occupying Ukraine. This is the maximum level of aggression that we believe Russia believes it can afford. Ultimately in this outcome, the most severe sanctions will be imposed, and these will more negatively economically impact both Russia, and those countries declaring them.

Western Europe will be more affected economically by this than for example the US. Not only will the region need to re-align economies towards other areas of the world for some time, it will also need to deal quickly with the rising energy, gas, oil and food prices, as well as supporting Eastern European markets financially and economically to support in their stabilisation. Eastern Europe will be more negatively affected in this scenario, as they are more dependent on economic relations with Russia.

There will be very little impact on new-car markets in Western Europe, as there is an ongoing supply shortage. Even if there will be lower demand for new cars in Russia and Eastern Europe, it is unlikely that this cannot be compensated by selling to other countries.

Several used-car markets in Eastern Europe may still see fewer transaction, yet stable, possibly even rising residual values, as inflation and exchange rate pressure will overcompensate the reduced demand.  This would come after a period of severely rising prices. The market in Western Europe will be less affected, but the expected increases in RVs for 2022 and 2023, in particular for internal-combustion engine (ICE) vehicles, may be slightly lower than initially forecast.

The automotive industry has spent the last two years dealing with a supply chain disruptions. In this time, supply chains should have become more resilient , meaning should problems arise with the supply of components out of Russia, other suppliers   have a vested interest to sell at rising prices. Supply shortage and supply chain disruptions may end up being less impactful in the medium term than during the COVID-19 crisis.