German e-car deals target called a fantasy

The government’s auspicious aim of having 15 million electric vehicles up and running by the end of the decade sounds impossible, say analysts.

Germany's electric auto dreams are in trouble.

Last year, Berlin pledged to have 15 million battery-installed vehicles by 2030, but it's likely to fall well short of that, according to experts advising that decreased subventions and manufacture delays will decelerate deals.

Only with a lot of luck will the target be half reached,” advised Ferdinand Dudenhöffer, a professor at the Center for Automotive Research in Duisburg, who is predicting only 7.2 million enrollments by the end of the decade.

He grounded his computation on the impact of the government’s reduction in consumer electric vehicle (EV) subventions introduced this month, but Germany's major industry is under pressure on numerous further fronts.

“The federal government's target for 15 million e-cars on Germany's roads by 2030 will be missed widely,” said Dudenhöffer. “ With the new financing guideline for e-cars, high electricity costs and rising battery costs, the demand in Germany will collapse in the coming years.”

The EV pledge was made by the country’s governing coalition in late 2021, and is a crucial part of a strategy to improve road transport while saving the country's dominant auto industry from failing the competition during the green transition.

The EU's decision to ban deals of new ICE cars and vans across the bloc from 2035 puts more pressure on the shift to EVs.

Industry representatives have complained that the slow pace of charging infrastructure framework makes it hard to vend more e-cars, but the EV target is also facing other troubles: developing inflation, a deficit of critical parts, global competition for battery resources and indeed subsidized EVs ending up in other EU countries.

Rising electricity prices are also canceling the argument that it's cheaper to run a battery-electric vehicle (aka BEV, pertaining to completely electric vehicles) than an ICE vehicle.

Adding to the obstacles, the government is now shearing back subventions for EV buyers from €6,000 to €4,500 for cars cheaper than €40,000 as of January.

Charging up

Along with the rest of the EU, EV deals are taking off at 355,961 units in 2021, up 83.3 percent compared to the year before, as per official statistics. In the first nine months of 2022, Germany saw 273,101 deals of battery-electric vehicles, 15 percent higher than in the same period in 2021.

But those figures would need to be improved dramatically if the market scale is going to be anywhere near the government's target in seven years.

“Our auspicious forecast includes around 11 million BEVs in 2030,” said Matthias Schmidt, a car market researcher from Berlin, calling the 15 million target a fantasy.

Germany is home to such companies as Mercedes-Benz, Volkswagen and BMW. Its auto sector accounts for about 5 percent of GDP and above 800,000 jobs, but it is particularly failing the EV targets.

Ex-Chancellor Angela Merkel’s claim over a decade ago to have 1 million clean vehicles operating by 2020 was missed. Of Germany's roughly 50 million registered passenger vehicles, only 1.59 million used electricity as of October 1, with 840,645 fully electric, while the others were just hybrids.