Fuel Type: plug-in-hybrid-phev

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

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

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.

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%).

EV registrations in Europe continue to surge in third quarter

Official figures show that the transition to electrically-chargeable vehicles (EVs) is picking up speed as consumers in the European Union continue to opt for more environmentally-friendly cars.

With governments across the bloc having to meet strict CO2 emissions targets, carmakers and drivers have benefitted from incentives and subsidies for electric cars. While EV registrations surged in the third quarter of the year, fossil-fuel cars saw a clear slump.

Source: ACEA

The European Automobile Manufacturers’ Association (ACEA) found that the market share for EVs continued to surge in the three-month period. In the quarter, battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs) accounted for 9.8% and 9.1%, respectively. This means that across the EU, EVs made up almost 19% of all new-car registrations.

The increase could be seen in Europe’s major automotive markets as Germany, France, Italy and Spain all reported rising demand for BEVs. Across the EU, registrations of BEVs soared nearly 57% year-on-year to more than 212,000 units in the third quarter. ACEA said this was ‘despite the overall decline in registrations of new cars over the three-month period, with growth being boosted by BEV incentives in various markets.’

PHEV models also saw a rise in registrations, jumping almost 43% to more than 197,000 units. Demand was particularly strong in Italy and Spain.

Picking up pace

Carmakers in Europe have stepped up the pace to manufacture more EV battery plants to meet the rising demand for electric cars. With the European Commission planning an effective ban on internal-combustion engine (ICE) vehicles from 2035, OEMs need to adapt quickly to the fast-moving transition to EVs.

A recent flurry of announcements makes clear that manufacturers are keen to build more factories and grow their electrification efforts. For example, Ford plans to invest £230 million (€272 million) in its British Halewood site, where it intends to build electric power units for the brand’s future BEVs.

While ICE vehicles will not disappear from the roads in 2035, they are becoming less attractive to consumers. ‘Conventional petrol and diesel cars continued to lose ground, almost completely absorbing the impact of the overall decline in car registrations of the last three months,’ ACEA said.

From July to September, registrations of petrol cars – which remain the biggest sellers and accounted for almost 40% of the new-car market – shrank by 35% to roughly 855,000 units. Overall, their share dropped from almost 48% in the third quarter of 2020 to below 40% this year.

Diesel cars fared worse. Registrations of new diesel cars more than halved across the EU, falling from nearly 770,000 units last year to around 380,000 in the third quarter of 2021. Diesels accounted for less than 18% of the market – less than hybrid electric vehicles (HEVs), which captured more than a 20% share.

Autovista24 webinar – The EV subsidies gamble: Impact on new- and used-car markets

Sales of electrically-chargeable vehicles (EVs), including battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs), are growing rapidly across Europe. Yet many countries are relying on incentives to drive this adoption. Does this gamble help or hinder the burgeoning EV sector in the new- and used-car markets?

Autovista24 looked at this issue in its latest webinar, The EV subsidies gamble: Impact on new- and used-car markets. The topics discussed included:

  • The state of Europe’s EV market
  • The market-adoption conundrum – new vs used
  • What can Europe learn from Norway, the continent’s leading EV market.

Autovista24 editor Phil Curry is joined by Dr Christof Engelskirchen, chief economist of Autovista Group, Roland Irles, managing director of EV-Volumes, Robert Madas, head of valuations & insights Austria, Switzerland, and Poland at Eurotax, and Geir Kristoffersen, managing director of Rødboka Norway, to discuss the EV situation.

Find the full slide deck for the presentation below. Available for viewing and download.

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