VW’s Declining Sales of Electric Cars and Challenges in the E-Mobility Market

German car companies are falling behind when it comes to e-mobility. As action is taken against higher emission limits, China and the US are moving forward. Is there a threat of decline like that of the German solar industry?

In view of the alleged reluctance to buy e-cars, the VW board of directors has decided to stop the production of e-cars to throttle in the Emden plant.

Advertisement

The reasons given are a reduction in subsidies in Germany and high electricity prices. This justification is not convincing, especially given the fact that electricity prices have continued to fall in recent weeks and months and that Volkswagen is not only selling e-cars in Germany.

However, it is particularly noteworthy that sales of e-cars are also increasing rapidly in Germany. The Federal Motor Transport Authority (KBA) has published the registration figures for June – and thus also the half-year balance for the first half of 2023. According to this, almost 54,000 fully electric vehicles were registered in Germany in June, which corresponds to an increase of 64 percent compared to the same month last year.

Their share of all registrations was 18.9 percent. In the first half of the year are therefore scarce 32 percent more electric cars been admitted than in the previous year.

For many observers, the weakness in sales of Volkswagen e-cars does not come as a surprise and they see the reasons in VW’s poor positioning compared to the competition from the Far East and Tesla. Although VW currently holds around 19 percent of the domestic German e-car market, this obviously does not seem to be enough for the group, which is why production had to be cut.

Overall, German manufacturers are not as well positioned as their foreign competitors in the small e-car segment and in the software equipment that is particularly important for e-cars. Even though VW announced bi-directional charging, the company couldn’t offer me a bi-directional car when I wanted to buy one.

Advertisement

That’s why I chose a Nissan Leaf. Although VW announced a major policy for electric cars years ago, it obviously cannot keep up with the competition from the Far East and Tesla.

This is particularly evident in the large Chinese e-mobile market. VW and even more so the other German automotive companies can hardly gain a foothold there. Not only the Chinese want more than just a set of wheels, they want a mobile smartphone. So the Chinese are buying hardly any German e-carswhich is particularly problematic because it means VW is losing another large sales market alongside Europe.

Union and car lobby against higher emission limits in the EU

The main reason for this is that German manufacturers, especially VW and the conservative politicians from the Union and FDP associated with them, are still clinging to the fossil combustion engine. As a result, e-mobility is not being pursued to the same extent as is the case with the combustion engine.

Instead of turning unreservedly to zero-emission mobility, German companies are once again aggressively lobbying at European level against proposals by the EU Commission to tighten emission limits for cars. The CDU MEP Jens Gieseke designated the regulatory approach represented by Frans Timmermans, the EU leader for the Green Deal, as “damaging for Europe as a business location”.