Last year’s electric car boom in Germany is probably forgotten. The trend reversed when the government ended incentives for companies producing electric cars. In August this year, deliveries of electric vehicles in the region’s largest car market fell by 69 percent to just over 27,000 vehicles.the European Automobile Manufacturers Association reported on Thursday.
Electric car sales in Germany are falling / Bloomberg
A wave of setbacks in the EU’s most important economy
Europe’s largest economy is struggling with a wave of setbacks in its industrial core.
Volkswagenthe continent’s largest carmaker, has pulled out of a decades-old labor agreement and is poised to close domestic plants in Germany for the first time in history due to weak demand.
BMW lowers its full-year profit forecastpartly citing slow sales of electric vehicles. Another reason forecast correction is the recall of 1.5 million cars equipped with potentially faulty brakes.
Chipmaker Intel Corp. has postponed construction of a planned factory that the German government has allocated 10 billion euros in subsidies.
No subsidy means no sales
As EU governments withdraw costly incentives, demand for electric vehicles is falling and Germany is leading this Europe-wide slowdown. In many countries, the lack of government subsidies means that consumers struggling with high living costs avoid purchasing relatively expensive electric vehicles.
Across the region, battery-powered cars saw their market share shrink to 14% in August. New car registrations fell 16.5% from a year earlier to 755.717 million units last month, with declines also seen in France and ItalyThe only major market where electric vehicle sales increased (by 10.8%) was the UK.
New car registrations in Europe in August 2024 / Bloomberg
The threat of high fines for exhaust emissions
The decline in electric vehicles is putting carmakers like VW and Renault SA at risk of hefty fines, with more stringent regulations set to come into effect next year strict European Union regulations on exhaust emissionswhich could potentially cost some companies billions of euros at a time when the industry is grappling with a sharp decline in demand for electric vehicles.
That is why European carmakers are calling for “urgent action” before meeting their 2025 emissions targets. The Brussels-based European Automobile Manufacturers’ Association said in a statement on Thursday that the industry is also calling on the European Commission to bring forward planned reviews of CO2 regulations from 2026 to next year, rather than 2027.
The group decided not to file a request for the application of emergency provisions that would delay by two yearsentry into force of EU regulationswhich aims to reduce fleet emissions to around 95 grams of CO2 per kilometer per vehicle. According to a draft proposal obtained by Bloomberg News last week, this option is currently being considered.
