Automotive News Europe — 2024-01-30
Automotive Industry
German electric-vehicle sales are projected to drop for the first time in eight years as signs of a slump in the EV market are spreading.
The VDA lobby expects shipments of purely battery-powered cars to decline 14% to 451,000 units this year as subsidy cuts weigh on demand.
Europe's biggest auto market has been one of the main drivers of EV adoption, but inflation, high car prices and sub-par charging infrastructure are weighing on demand. A number of manufacturers have pushed back rollouts of new electric models, and rental firms are paring purchases for their fleets.
Volkswagen and Renault this week walked back plans to sell shares in their EV businesses, deterred by slowing demand and a brutal market for initial public offerings.
In December, Chancellor Olaf Scholz's coalition government discontinued a subsidy for EVs at short notice, a year earlier than previously planned.
Germany sold over 524,000 full-electric cars in 2023 — more than any other market in Europe.
The projected drop this year means the share of purely battery-powered cars in Germany would slip to 16%, from around 18% in 2023.
Supply problems fixed
The VDA expects Germany's passenger car market to shrink by 1% to 2.82 m in 2024, 25% below pre-pandemic levels.
It forecasts the global market to grow by 2% to 77.4 m cars, close to the pre-pandemic level of 78.8 m.
Supply chain problems have largely been fixed, but the business environment for German automakers remains challenging, VDA chief economist Manuel Kallweit said.
Production of electric cars in Germany is forecast to increase by 19% this year to 1.45 m, the VDA said, with much of German output destined for export.
Germany is the world's second-largest passenger electric vehicle producer after China, albeit lagging well behind with 1.2 m cars produced in 2023 compared to 6.6 m in China.
It is followed closely by the US, which produced 1.1 m electric cars last year, according to VDA and S&P Global Mobility figures.