German Government’s Goal of 15 Million Electric Vehicles on the Road by 2030 in Jeopardy
The German government’s ambitious plan to have 15 million electric vehicles (EVs) on the country’s roads by 2030 is facing significant challenges. Following the cancellation of subsidies for plug-in hybrids, sales of these vehicles have plummeted, and further restrictions are on the horizon. Companies will no longer receive subsidies for the purchase of battery-powered vehicles, which are crucial for boosting sales of new cars.
According to the automotive magazine Automobilwoche, the cancellation of subsidies has made it financially unviable for many fleet operators to invest in battery-powered vehicles. Benjamin Kibiesa, an analyst at Dataforce, predicts that the share of battery electric vehicles (BEVs) in the vehicle fleet will decrease from 63% in the first half of the year to just 2% in the second half. While BEV registrations are expected to see a significant increase in July and August, they are projected to decline by over 50% in November and December.
The absence of corporate electric vehicles would significantly slow down the growth of battery-powered vehicles, which currently account for 18% of new registrations in Germany. In the first half of the year, 220,000 new pure electric vehicles were registered in the country, an increase of 53,000 compared to the same period last year. However, two-thirds of these purchases were made by companies.
Dataforce has already observed a sharp decline in the popularity of electric vehicles in fleet sales, including models such as the Fiat 500e, BMW i3, and Renault Zoe. Experts predict that the expected decline in the second half of the year due to the cessation of subsidies could temporarily revive demand for vehicles with combustion engines. This trend has already been evident in corporate vehicle registrations, with gasoline vehicle registrations increasing by 34% to 164,000 units and diesel vehicle registrations increasing by 22% to 186,000 units, as reported by Automobilwoche.
For fleet customers, electric vehicles pose another problem known as residual value. The recent significant price reductions of Tesla vehicles have put pressure on the prices of used electric vehicles. While this may be seen as positive news for potential buyers of used EVs, it is a tragedy for current owners who are now selling their electric cars for much less than expected. This situation could result in significant losses for leasing companies.
The German government’s goal of having 15 million electric vehicles on the road by 2030 is now at risk due to the cancellation of subsidies and the subsequent decline in sales. Without further support and incentives, it will be challenging to achieve the desired transition to electric mobility in Germany.
What is the estimated number of charging points needed in Germany by 2022 to support the goal of 15 million EVs on the road by 2030?
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Another challenge facing the German government’s goal is the lack of charging infrastructure. According to the Federal Ministry of Transport and Digital Infrastructure, Germany currently has around 23,000 public charging points, which is far below the estimated requirement of 70,000 charging points by 2022. This lack of infrastructure makes it difficult for EV owners to charge their vehicles, especially on long journeys, and discourages potential buyers from investing in electric cars.
Furthermore, the high cost of EVs remains a major barrier to their widespread adoption. While the German government offers financial incentives to encourage the purchase of EVs, the overall cost of these vehicles is still significantly higher than traditional combustion engine cars. This price difference is often a deterrent for consumers, particularly those with lower incomes.
In order to overcome these challenges and achieve the goal of 15 million EVs on the road by 2030, the German government will need to take decisive action. This may include increasing subsidies and incentives for EV purchases, investing in the expansion of charging infrastructure, and working with car manufacturers to reduce the cost of electric vehicles.
However, with less than a decade to go and the significant obstacles currently facing the electric vehicle market in Germany, it remains to be seen whether the government’s ambitious goal will be achieved. Unless substantial measures are taken to address these challenges, the target of 15 million electric vehicles on the road by 2030 may be in jeopardy.
