E-MOBILITY SPOTLIGHT: Spanish market growth to accelerate into 2030

LONDON (ICIS)–The Spanish electric mobility (e-mobility) market demonstrates a strong potential to become a role model in the continent by the end of this decade, particularly for many Southern European countries.

Since 2020, Spain has set out highly ambitious decarbonisation targets in the hope of achieving climate neutrality by 2050.

One of the areas Spain will aim to intensify is the decarbonisation of its roads and transport, namely through the transformation of its e-mobility market.

According to the country’s recently approved Law on Climate Change, the road transport sector accounts for 25% of greenhouse gas emissions in Spain.

To combat this, Spain has set a target of five million electric vehicles (EVs) by 2030 in its National Energy and Climate Plan, including cars, vans, motorcycles and buses, as well as the use of advanced fuels.

Last year, Spain was the second largest vehicle manufacturer in Europe – behind Germany – and eighth largest in the world, according to the International Organisation of Motor Vehicle Manufacturers. The automotive sector is the fourth largest export sector, representing 15% of total Spanish exports.

In this essence, Spain has a favourable condition to not only potentially achieve its 2030 EV targets, but also ramp up its domestic manufacturing capabilities in this field.

The speed in which Spain will carry out its plans to boost EV sales and strengthen its EV charging infrastructure is critical. If handled efficiently, Spanish EV market penetration could reach the point of accounting for more than half of all passenger car sales by 2030 and rival European countries currently in a stronger position.

ICIS EUROPEAN FORECAST

The ICIS long-term EV forecast considers a range of drivers and current trends, such as consumers’ propensity to buy an EV. Financial and economic drivers underpin the forecast, with changes to the regulatory landscape incorporated into the analysis. Actual and planned investments into charging infrastructure are also evaluated.

Approximately 958,000 passenger car sales are expected in Spain this year, according to ICIS data. Battery electric vehicles (BEVs) are expected to account for 2.3% of these sales, with plug-in hybrid electric vehicles (PHEVs) – which have a petrol or diesel engine alongside an electric motor – representing a 2.7% share.

The share of BEVs in Spain is anticipated to increase to 11% in 2025, before surging to 52% by 2030.

Spain’s current EV market penetration figures are considerably small compared to Germany and France, where BEVs on average are expected to account for 9% of all passenger car sales this year. However, Spain’s EV market share is expected to compete with these countries by the end of the decade.

The nascent state of Spain’s current EV market is also clear when compared to Norway. Despite considerably lower passenger car sales than Spain, ICIS analysts forecast the share of BEVs in Norway at 57% in 2021, which is set to account for more than 99% by 2025. This is due to Norway’s goal of ending petrol and diesel engine vehicle sales by 2025.

Spain’s EV market is also currently not the leading example in southern Europe. Portuguese battery EV sales are expected to have a 5.8% share of all passenger car sales this year, before increasing to 54% by 2030. However, like Norway, the volume of Portuguese passenger car sales is considerably smaller than in Spain.

In Italy, where passenger car sales are larger than Spain’s, BEVs are forecast to have a 3.4% share in 2021 before reaching 45% by 2030 – a lower figure than in Spain.

EU IMPACT AND ICIS ASSUMPTIONS

Factors in helping Spain achieve these targets are linked to European-wide ambitions as well as national legislation.

The ‘Fit for 55’ climate package – unveiled by the European Commission in July as legislative proposals – aims for a 55% reduction in carbon emissions by 2030 compared to 1990 levels. With this package, all new passenger cars would also need to have zero emissions from 2035.

ICIS assumes that the tougher emission standards proposed via the ‘Fit for 55’ package will require a significant increase in EV share to meet EU climate targets in 2030 and beyond. As such, the level of EV adoption is expected to differ little across countries by 2030.

In the near term, countries lagging in charging infrastructure such as Spain will need to catch up. In 2020, Spain only had 14 fast chargers per 100km of road – the third lowest among Western European countries, according to the European Alternative Fuels Observatory.

As infrastructure gets built, hybrids are expected to be an important interim option to meet near-term targets. ICIS expects PHEVs to represent 4.2% of Spanish passenger car sales in 2021, 5.8% in 2025 and 4.8% in 2030.

This story is part of a four-part series exploring the growth of the Spanish electric mobility market and its evolving position in Europe.