LMC Automotive (a GlobalData company) analyst James Norris investigates.

In June 2022, the EU Council confirmed that the sale of Internal Combustion Engine (ICE) cars and vans will be prohibited in the region from 2035, pending a discussion on ICE models using e-fuels. Nevertheless, this will effectively be a deadline for the ending of the sale and build of ICE Light Vehicles (LVs) in Europe. As a result, developing soon-to-be-redundant ICE technology while investing staggering sums into electromobility has become financially unviable in most cases. Producing ICE models alongside Battery Electric Vehicles (BEVs) with BEV-dedicated platforms also incurs operational costs, which raise the stakes even further.

As such, European automakers are forming strategies to best navigate the transition. More specifically, they are deciding whether to develop focused (BEV-dedicated) or flexible (multi-fueled) platforms, or even a combination of the two. The benefits and drawbacks of each approach have been outlined in a previous article (BEV development: lowering the cost of progress). Moreover, the diagram below gives an overview of these strategies by separating the automotive group, brand, and BEV-capable architectures into the three categories.

Note: where possible platforms that were not originally developed with an EV option have been excluded.

It is evident that most of the industry favours the focused platform approach and that the producers tend to be the Premium brands, with higher margins and wealthier customers so they can better absorb the higher costs associated with BEVs. Or they are part of larger groups that have sizeable budgets, geographical reach, and production capabilities, which allow them to mitigate costs through greater economies of scale. Ford may seem like an outlier, but they are initially purchasing VW’s MEB and MEB ECO platforms to save on development costs for BEV models in the region.

Mercedes-Benz and Jaguar Land Rover are Premium brands but have instead opted to combine focused and flexible platforms. The former will introduce the flexible MMA on smaller models from 2024, with larger vehicles underpinned by BEV-focused platforms (MB.EA, AMG.EA, and VAN.EA) from 2025. This strategy highlights the differing price sensitivities between segment sizes. Traditionally lower-margin smaller segment vehicles may not be financially viable until battery costs reduce. In fact, this is playing out across the industry with BEV-only platforms for smaller models, such as the MEB ECO and CMF B EV, released later than their larger counterparts. Aside from this, JLR is planning to relaunch the struggling Jaguar brand as BEV-only and position it further upmarket, with Land Rover set to utilise the EMA and MLA multi-fuel platforms.

The only manufacturers that have opted for the purely flexible platform strategy are Stellantis and Toyota. This is generally seen as a short-term fix, however, with models unable to optimise BEV design while also offering ICE capabilities. So why remain fully flexible? Overall, it will allow OEMs to bring BEVs to market with less investment and shorter development times and ultimately facilitate BEV accessibility for the ‘mainstream’.

Equally important to the introduction of BEVs is the continuation plan for ICE models. BMW summed this up when they highlighted the risk to vehicle output and market access to mobility from the dropping of ICE models before BEV prices reach parity. The flexible and combined approaches allow plants to manufacture ICE alongside BEV variants of the same model for as long as there is demand through to 2035. For instance, JLR estimates that 40% of its sales are still likely to come from non-BEVs by 2030. On the other hand, focused producers are tending to extend the lifecycles of their current BEVs to run alongside their ICE counterparts, such as Porsche is doing with the Macan.

Considering all of this, it is unsurprising that BEVs are expected to account for 56%, 41%, and 37% respectively of the focused, combined, and flexible automakers’ average European LV production in 2029.

For automotive industry forecasts and intelligence: GlobalData’s Automotive Intelligence Center

James Norris