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Electric vehicles have caused rapid changes in the German car market | Economy in Germany and worldwide: news and analysis | DW

Political debate in Germany and the European Union over whether to ban the sale of passenger cars with internal combustion engines (ICE) for the sake of climate protection as early as 2030 or wait until 2035, may soon lose all meaning, because by then the issue will be resolved by itself. This is evidenced by the rapid, even rapid changes taking place in the automotive market of Germany – the largest in Europe.

The share of cars with electric motors is approaching half

So, in September, a landmark event took place on it: in Germany, for the first time, more fully electric vehicles (Battery Electric Vehicle, BEV) were bought than diesel ones. The share of electric vehicles in sales of new passenger cars rose to 17.1%, while the share of diesel-powered vehicles fell to 15.9%, according to the Federal Motor Transport Authority (KBA).

Smoke from a car exhaust pipe

Diesel cars with their harmful exhausts are less and less likely to find buyers in Germany

Back in August the ratio was 17.7% to 14.9% in favor of diesels. And five years ago, in 2016, they accounted for almost half of the cars sold in Germany (46%). This was facilitated by tax incentives and a wide choice of models: the German car industry has been intensively developing diesel technology for many years.

However, when trying to promote them to the US market, Volkswagen and other German automakers resorted to fraud, which led to the “diesel scandal” and actually put an end to this type of internal combustion engine. Now, as can be seen from the KBA statistics, he is losing ground even faster in his homeland, Germany.

In parallel with this, cars with gasoline engines are losing their former market share, albeit more slowly. As a result, both types of internal combustion engines already accounted for only 51.8% of sales in September, while the share of cars with electric engines – both BEVs and various types of hybrids – rose to 47.6%. Thus, this share is already close to half, while at the end of 2020, it accounted for only a quarter of the market. This, of course, is largely due to generous subsidies from the state and producers.

Plug-in hybrids lose out to all-electric cars

At the same time, significant changes are taking place in the electric vehicle segment itself. It can be divided into three main parts: hybrids that charge the battery while driving or braking, PHEV (Plug-in Hybrid Electric Vehicle) plug-in hybrids that are recharged by a cable from the mains, and all-electric BEVs.

Prague, November 2019. Premiere of the 4th generation Skoda Octavia

Prague, November 2019. The 4th generation of Skoda Octavia will be the first and last with a hybrid engine.

The German market is still dominated by hybrids of different species. Their total share, including PHEV, amounted to 30.5% of all sales of new passenger cars in Germany in September and is increasingly approaching the share of gasoline cars (35.9%). At the same time, growth in demand specifically for plug-in hybrids, which just a few years ago were considered the most convenient transitional form for drivers from cars with internal combustion engines to electric vehicles, is significantly slowing down.

If, at the end of 2020, PHEVs were still ahead of BEVs in terms of sales and market share, then by the end of the first half of 2021, electric vehicles took the lead, and in September they achieved a share of 17.1% in the German market, as already noted, while the plug-in -hybrids, it amounted to only 11.6%.

The economic newspaper Handelsblatt sees this as an obvious trend: “Plug-in hybrids are becoming a dead model, electric vehicles have established themselves on the market faster than expected.” The publication cites statements by top managers of Daimler, Volkswagen and Skoda that these automakers are not going to develop new models of cars that combine internal combustion engines and an electric motor. The newspaper warns owners of such cars and potential buyers that the prices of used plug-in hybrids will fall sharply in the coming years.

Tesla and Polestar grow fast, but German automakers lead the way

Due to the growing importance of electric vehicles, some foreign car manufacturers have begun to play a more prominent role in the German market. Thus, month after month, the American company Tesla is strengthening its still modest position in Germany (1.3% of all sales), which intends to start large-scale production at the latest at the beginning of next year. plant in Grünheide near Berlin. From January to September 2021, sales of Tesla electric vehicles increased by 131% compared to the same period last year, in September the growth was 158%. This month, the Tesla Model 3 became Germany’s best-selling mid-range car, beating out petrol rivals.

Munich, September 2021. Presentation of Polestar at the International Motor Show IAA

Munich, September 2021. Presentation of Polestar at the International Motor Show IAA

In nine months, sales of Polestar rose by 292%, but from a very low level. This brand of electric vehicles, new to the German market, belongs to the joint venture of the same name between the Swedish company Volvo and China’s Geely. Relatively fast, but also from a low level, are growing, for example, the sales of electric vehicles of the Japanese company Suzuki.

However, the leading positions in the rapidly growing segment of cars with electric motors are firmly occupied by traditional German market leaders. Thus, among BEV electric vehicles, the most popular in recent months have been VW ID.3 and VW Up, among PHEV plug-in hybrids – Mercedes GLK and Mercedes GLC, among hybrids – BMW 3 and Audi A6, according to the Federal Motor Transport Office.

At the same time, it should be taken into account that the growth in sales in the segment of electric vehicles occurs against the backdrop of a significant contraction of the German automotive market as a whole. At the end of 2021, sales of new cars in Germany may decrease compared to last year, including due to the increasingly acute microchip deficiencya quarter or even a third.

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