Sales of all-electric cars in Germany fell 37% in July compared to the same month in 2023, the biggest drop since the local government removed incentives, according to data from the German Federal Motor Transport Authority. for electric vehicles last December, causing concern among automakers and suppliers about their huge investments in electrification.
In addition to the absence of subsidies, which has made EVs more expensive, analysts also blame the shortage of affordable EVs currently on the market.
Predictably, the slowdown in electric vehicles is forcing automakers to reconsider their future plans and not abandon internal combustion engines altogether, making it difficult for them to meet strict EU regulations in matter of emissions.
“So far, the rise in electric mobility has not proven sustainable. The market has lost momentum and many customers doubt the prospects of electric cars,” commented Constantin Gall, consultant at Ernst & Young.
Besides Germany, Europe’s largest auto market, other countries are also experiencing sluggish demand for electric vehicles. Sweden, which is considered the leader in electric vehicles in European markets, also saw a significant 15% drop in electric vehicle sales in July. In a similar context, sales of electric cars fell by 19% in Switzerland, another important market for zero-emission cars.
A significant drop in sales
According to the Federal Transport Authority of Germany, sales of electric cars fell by 37% in July 2024 compared to July 2023. This decrease is the largest since the government reduced incentives for electric vehicles last December .
- Fall in sales : 37% in July 2024 compared to July 2023.
- Reduction of incentives : December 2023.
Reasons for the decline
The German government had previously offered generous subsidies to encourage the purchase of electric vehicles. However, reducing these incentives has made electric cars less attractive to consumers.
- Reduced subsidies : Direct impact on the attractiveness of EVs.
- Cost of EVs : Higher without incentives.
Shortage of affordable models
Another major reason for declining sales is the shortage of affordable electric vehicles. The options available on the German market remain limited and often more expensive than their internal combustion counterparts.
- Limited options : Lack of affordable models.
- Cost comparison : EVs more expensive than combustion cars.
Impact on the automotive industry
Declining EV sales in Germany are forcing automakers to reevaluate their strategies. Some are considering slowing the phase-out of internal combustion engines to meet market demand.
- Strategies re-evaluated : Adaptation to demand.
- Return to combustion engines : To meet consumer preferences.
Challenges to emissions reduction targets
This trend also complicates efforts to meet the European Commission’s emissions reduction targets. A return to internal combustion vehicles could jeopardize progress made in reducing CO2 emissions.
- Emissions reduction targets : In danger.
- Environmental impact : Potential increase in CO2 emissions.
Comparison with other European countries
The decline in EV sales is not unique to Germany. Countries such as Sweden and Switzerland have also seen significant declines in electric car sales in July 2024.
- Sweden : 15% decline in EV sales.
- Switzerland : 19% decline in EV sales.
Possible solutions and future prospects
To reverse this trend, the German government could consider reintroducing incentives for electric vehicles. Increased subsidies and tax benefits could make EVs more attractive to consumers.
- Subsidies : Possible reintroduction.
- Tax benefits : To encourage the purchase of EVs.
Development of affordable models
Automakers should also focus on developing more affordable EV models. Offering a wider range of vehicles at competitive prices could attract more consumers to electric cars.
- Affordable models : Need for development.
- Expanded range : To attract more consumers.
The decline in electric car sales in Germany highlights the challenges the automotive industry faces in meeting its emissions reduction targets and promoting sustainable mobility. Corrective measures, such as reintroducing incentives and developing more affordable models, will be essential to revive the EV market. In the meantime, manufacturers must reassess their strategies to adapt to changing consumer preferences.