Germany’s electric vehicle (EV) market is at a crossroads. According to the German Association of the Automotive Industry (or VDA, Verband der Automobilindustrie,) the nation braces for a 14% drop in EV sales, a dip to roughly 451,000 units.
Earlier this year, Locate2u News reported that petrol-powered vehicle sales in Germany, Europe’s largest economy, saw an increase of 13.3%, or 979,000 vehicles. However, sales of hybrid models halved to 176,000.
VDA president Hildegard Müller said politics was to blame for the decline. Amidst the evolving market dynamics, companies like BMW are reworking their strategies to navigate the implications of the growth slowdown, and current market dynamics.
EV market in need of ‘paradigm shift’
During the VDA annual kick-off event in Berlin last month, chief economist Dr. Manuel Kallweit says the industry should brace for a “decline of 1% to a further 2.8 million units” this year, which is a quarter less than the units sold during the pre-crisis period in 2019.
Kallweit explains: “We are assuming lower sales of electric cars – minus 9% to 635,000 units. While sales of plug-in hybrids (PHEV) are expected to increase by 5% to 185,000 units, [and] we expect a decline of 14% to 451,000 units for purely battery-electric vehicles (BEV).”
Meanwhile, Müller says Germany needed “reforms instead of regulations, and less micromanagement.” Politicians needed to “generate confidence through strategic foresight.” She also called for an end to the “principle of crisis.”
Charging ahead with challenges
Instead of finding solutions to move the industry forward, politicians have been defensive and reactive, according to Müller. She argues that they should have focused on a “strategy and a clear goal.”
She adds: “Overregulation and bureaucracy paralyze growth and innovation. This leads to an increasing loss of trust – among industry and the population.”
Another significant stumbling block was Germany’s EV charging infrastructure, and the government’s lack of effort to increase the number of charging stations to one million within the next six years.
Despite the ambitious efforts from transport minister Volker Wissing to invest €6.3 billion ($6.9 billion) to reach this goal by 2030, he says the plan is moving slower than expected. As of September 2023, Germany was at 10% of that goal with only 105,000 charging stations.
BMW an example to follow
BMW’s stance on ‘technological openness’ was vindicated during the VDA event, with Wissing talking about the importance of using tech (and being transparent about it) when it comes to reducing transit emissions.
BMW had been advocating for more transparency in achieving emissions goals. And now, as sales continue to decline and charging infrastructure falls behind, BMW’s approach is proving to be more aligned with the current realities of the industry.
Germany’s EV landscape is complex and the industry faces a pivotal moment as it faces these realities while dealing with lacking infrastructure, and a deadline to reduce transit emissions.
About the author
Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.
