Affordability of electric vehicles is key challenge for Belgian consumers

• 27% of lower income groups1 do not know which powertrain to purchase next, highlighting affordability and uncertainty as a key barrier.
• Only three in 10 lower-income consumers plan to buy an electric car next, compared to four in 10 higher-income consumers.
• Fewer Belgian consumers intend to buy a BEV compared to Germany, France and the Netherlands, which subsidise the purchase of BEVs for individuals.
• Overall, four in 10 consumers cite having no/limited knowledge about EVs, indicating that education is a key enabler to stimulating electrification of the private car park.
• Consumers are becoming less intent on purchasing a new car, signaling another challenging year ahead for the Belgian automotive sector.·
• Consumers aged 55+ are less intent on purchasing an electric car next.
• There is a growing gap between the corporate and private consumers, since private consumers represent 33% of new car registrations, but only 10% of BEV registrations.

Brussels - 27 July 2023 - Today, Deloitte released its latest Automotive Consumer Tracker on the Belgian car market, which reveals that the Vehicle Purchase Index (VPI) in H1 2023 was 25% lower than in H1 2022.

“Belgian consumers are less intent to buy a new car, mainly due to inflation and concern for their future financial capacity,” explains Aled Walker, Automotive Leader at Deloitte Belgium. “The ongoing crisis is clearly driving consumer decisions. With 44% of consumers still delaying large purchases, and most electric vehicles starting at €50,000, the gap between the have and have nots of electric vehicles will become increasingly apparent.”
 
The purchase intent of EVs reveals societal tensions

The Deloitte report also highlights socio-economic differences in consumer interest in battery electric vehicles (BEVs). The survey found that lower income groups are less inclined to buy hybrid or battery electric cars and 27% do not know whether their next car will be petrol, diesel, hybrid or fully electric, with affordability of BEVs identified as a key barrier to purchase. Only three in 10 consumers that are 55+ plan to buy an electric car next, compared to four in 10 younger consumers.

In Belgium, consumer interest in BEVs is lower than in the neighbouring countries. In H1 2023, only 10% of Belgian respondents stated that they plan to buy a BEV, compared to 16% in the Netherlands, 13% in France and 15% in Germany. Deloitte's research shows that there is a relatively low tax difference between small BEVs and small ICE (internal combustion engine) vehicles in Belgium compared to peer countries. For example, the Netherlands exempts electric cars from registration tax, while ICE vehicles face a progressive increase in registration tax up to €50K. Additionally, German, French and Dutch consumers may be eligible for premiums when purchasing a (second-hand) BEV under specific conditions.

The cost-price premium is the #1 barrier that stops consumers from making the switch to EVs, even if there are lower maintenance and fuel costs during the lifetime of the vehicle.

The corporate vehicle market is picking up much faster than the consumer market

While new car registrations were up 35.4% in H1 2023 compared to H1 2022, the rise is due to the backlog of orders that is now decreasing, with high levels of stock in 2022 being delivered and registered in 2023. According to Febiac data, the total amount of registrations are primarily driven by a strong corporate market (2/3rd) and to a lesser degree by private consumers (1/3rd). Overall, registrations dropped to a twenty-year low at the end of 2022, and are currently down 14% compared to H1 2019.

There is a growing gap between the corporate and private consumers, since private consumers represent 33% of new car registrations, but only 10% of BEV registrations. In addition, 92% of all new PHEV-registrations were done by companies.