The lack of new vehicles for immediate delivery, which consequently leads to a lack of used used vehicles for sale on the national market, also affects the electric vehicle segment. According to information gathered by the management of the Electric Vehicle Users Association (UVE), “The delay in the delivery of new vehicles is a challenge for new users who want to take advantage of the purchase incentive (Incentive for the Introduction in the Consumption of Zero Emission Vehicles 2022 ), managed by the Environmental Fund, as vehicles eligible for this aid must be registered this year and applications close on November 30, 2022”. However, the association says that despite these restrictions, all 100% electric products are sold and most brands commit to delivery times of six to 12 months. Rodrigo Ferreira da Silva, president of the National Association of the Automotive Industry (ARAN), goes further and even talks about waiting an average of 18 months for the delivery of this type of vehicle.
To meet the growing national demand for electric vehicles, imports of used cars have increased at a rapid pace (as have imports of combustion engine cars). From UVE’s accounts, a recent industry analysis shows that used imported electric vehicles represent about 30% of the electric market in Portugal. “Although this type of used vehicle is not eligible for the stimulation of the Environmental Fund, 100% electric used vehicles continue to benefit from the exemption from the ISV – Tax on Vehicles and the IUC – Single Circulation Tax,” says the management of the UVE .
However, the same association clarifies that “although there is a delay in the delivery of vehicles, it is still possible to find brands with cars available for immediate delivery, and this can be seen in the sales that have experienced a very expressive growth “. For example, 2,649 new 100% electric and plug-in hybrid vehicles were sold last July, a decrease of 12% compared to the month of June, where 100% electric cars were more severely penalized by the lack of vehicles, with a decrease of 21%. Nevertheless, the tram market increased by 61.5% compared to the same month in 2021, which according to the association shows that if there were more vehicles, they would certainly have all been sold. Nearly 19,000 vehicles of both types have been sold since the beginning of this year, a significant drop from 2021 when nearly 30,000 were sold.
Another problem reported by sources in the sector is that, due to delivery delays, whoever wants to take advantage of the incentives of the Ministry of the Environment, which amount to 4 thousand euros in the case of 100% electric passenger cars, with a maximum purchase value of 62,500 euros, In the event of a delay and after the application deadline has passed, some customers request that the vehicle be delivered and invoiced next year, in the hope of being able to submit an application immediately.
Sérgio Mendes and Telmo Azevedo, both from the direction of UVE, say that they are in fact aware that several users are making this request to sellers, even without knowing whether there will be incentives next year. “As many sellers want to make money this year, there are two situations going on: some tell customers that’s why they miss their turn when the stock arrives – because they manage to deliver that car this year to whoever wants it – while they’re on the list of waiting for the next year. Others apply a discount (identical to the fleet), equal to the value of the incentive, to realize the sale of the vehicle this year,” explain the two responsibles.
Applications for light vehicle incentives already reach 1730
Although they are still ongoing, the applications for the Environmental Fund in the passenger car segment are already well beyond the number of incentives to be granted. The State has 1,300 incentive schemes with a maximum value of EUR 5.2 million, and 1,730 applications have already been submitted, although only 481 have been approved, of which 1,193 have yet to be assessed. With 100% electric light trucks (incentive of 6 thousand euros), these are only available for 150 vehicles, with a maximum value of 900 thousand euros, 229 applications have already been submitted and only 84 have already been accepted. When the UVE was asked whether it was still worth submitting more applications, those in charge clarified that since there is a value of incentives to be given to applications on the waiting list for depleted funds or deadlines, the value of the collected not allocated in the other typologies are distributed among the candidates on the waiting list.
Hélder Pedro, Secretary General of the Portuguese Automobile Trade Association (ACAP), says there are already some 400 tram models available on the national market, meaning this is an imposed solution. “However, there should be more incentives for electric mobility. The incentives for passenger cars have risen to 4 thousand euros, but in Spain, France and Italy it is 6 thousand, 7 thousand, 8 thousand. In Germany it is 9 thousand euros, he explains. Despite the difference in incentives, the sales prices of these vehicles are identical in all European markets, and the purchasing power of these countries differs greatly from the national ones. “Pure electric vehicles are about 10.5% of the market, has evolved and will continue in the coming years. We are currently the 9th country in percentage, but we were already 4th, while other countries pushed for more incentives and Portugal stagnated”.
Electricity is driving dramatic changes in business models
The distribution business model is changing with the advent of electric vehicles. Studies like the Global Automotive Executive Survey 2021conducted by the consulting firm KPMG, show executives believe there will be a profound change in the way consumers buy their vehicles: most sales will be online by 2030 and about 40% of vehicles will be marketed directly by manufacturers brought in, so intermediaries.
This profound industry revolution has already begun and dealers are beginning to understand the changes to come. There are many challenges that they face, which they may not be able to keep up with in the end. Founded in 2003 to produce electric vehicles, Tesla revolutionized the market by selling its cars directly to the end consumer. It was the beginning of the end of traditional distribution, with a model that lasted for decades.
The pandemic accelerated the transformation that was already being felt: manufacturers realized they could sell their product directly online and took over the entire value chain. In addition, there are other protagonists, outside this universe, who are entering the market: Fnac and Worten, for example, have already started selling cars, in a rentin the belief that in the future vehicles will mainly be sold through the digital channel and in monthly subscription models.
Some of the largest automakers have already announced direct sales of the electric car segment, such as Volvo; others have already fired most of their dealers, such as Renault; and still others announced that they had created a new distribution format, the agency model, such as BMW and Mercedes Benz. In this latter form, today’s dealers act as sales agents – a bit like real estate companies – with the manufacturer setting the final price, taking on the financial and investment risks, with the distributor merely acting as an intermediary and charging its commissions. For example, the Stellantis Group, led by the Portuguese Carlos Tavares, and which currently includes 14 brands such as Citroen, Fiat, Opel and Peugeot, has already canceled all concession contracts, with the current distributors waiting for the new sales conditions imposed by the group. When asked, some market sources said they still could not access the new agreements, others stated that they were already presented to the dealers, although still in secret from the gods.
Regarding the new distribution contracts that will be presented by some of the world’s largest manufacturers, Rodrigo Ferreira da Silva of ARAN warns: there are groups that propose illegal agency models, that is, brands control sales prices, but the risk remains at the traders. “Many of these contracts are, in legal terms, fake agency contracts. The real contract is when all of the company’s risk is on the manufacturer. What happens is the best of both worlds for the manufacturer: they control everything, but the concessions continue to have costs with the teams, with the facilities, etc.”, explains the person in charge.
CECRA, the European Association of Distribution and Repair Companies, has issued a statement explaining, in addition to denouncing the situation at the European level, that although it is legitimate to change the distribution terms – last year the Car Distribution Regulation was revised , the call Block Exemption -, the newly designed contracts must provide that the business model of the concessionaires remains economically viable.
Roberto Gaspar, secretary general of the National Association of Automotive Commerce and Repair Companies (ANECRA), also says the challenges in automotive distribution are now more than many. He states that agency contracts are legitimate, under the new European regulation for car distribution, but in the meantime “different shades of agency have emerged. There is a pure agency and agency where the agent is expected to pass the invoice to the end customer, which solves some of the problems of direct selling, as is the case with car financing”.
Source: DN
