Mobility Portal, Spain
Date: April 4, 2024
Inés Platini
By Inés Platini
Germany flag

German electric vehicle manufacturers: Did prices remain “artificially” high during the environmental bonus period?

Almost overnight, the federal government ceased supporting electric vehicles in Germany, prompting manufacturers to quickly reduce the prices of their products to maintain sales. So, did they really need the subsidy to decrease costs?

After the end of the environmental bonus in Germany last December, manufacturers chose to reduce the prices of their electric vehicles (EVs) to compensate for the absence of this state stimulus.

In this situation, uncertainty arose about whether producers really needed assistance to offer affordable cars.

Timo Kauffmann (BBNM).

Timo Kauffmann, a DEKRA-certified consultant for electromobility and alternative propulsion systems and head of subsidies at the Federal Association of Consulting for New Mobility (BBNM), tells Mobility Portal Europe:

“This suggests that the sales prices were kept artificially high during the time of the environmental bonus in order to generate corresponding profits with the subsidy.”

National companies such as Volkswagen have decided to implement a significant cost reduction, offering temporary discounts of over 7,000 euros.

In the face of this, Kauffmann asserts: “There is a great deal of uncertainty among companies and private individuals as to whether there will be further subsidies and whether electric mobility really has a future.”

According to a report by Deutsche Automobil Treuhand (DAT), 80 per cent of car owners prefer to wait and see what will happen with EVs while continuing to drive their combustion engine ones.

In the survey, three-quarters of car owners state that they consider EVs are not yet fully developed in terms of technology, so they are waiting for further innovations.

Moreover, for 80 per cent, the battery is considered a factor of uncertainty.

However, the eMobility market has evolved and continues to do so, offering buyers cars with great range.

It also demonstrates that these automobiles are more cost-effective in the long term than traditional combustion engines.

Similarly, the report shows that over half of new EV buyers cited subsidies as the main reason for their purchase.

In this regard, Kauffmann points out that eCar sales have decreased with the abolition of the environmental bonus.

According to the latest data published by the German Association of the Automotive Industry (VDA), in February, new registrations of EVs fell by five per cent to 42,070 units, compared to the same month in 2023.

In detail, new registrations of battery electric vehicles (BEVs) dropped by 15 per cent to 27,480 units, while plug-in hybrids (PHEVs) increased by 22 per cent (14,580 vehicles).

In the first two months of 2024, there was a decrease in new BEV registrations by one per cent, and the PHEV segment, on the contrary, grew by 39 per cent.

What is happening in the used electric vehicle market?

Currently, zero and low emission cars are also entering the second-hand market.

But here too, according to Kauffmann, EVs are “slow sellers” compared to combustion engine versions.

One reason for this, according to the expert, is that there is much ignorance and misinformation about electric vehicles among the general public in Germany.

At this point, he mentions that many people or companies are concerned about the health of the batteries in used eCars as well.

There is nothing to worry about here either,” he states.

And he adds: “The batteries in used eVehicles are usually in good condition.”

Furthermore, their health can be determined before purchase using various certified testing methods.

However, there is also a pricing issue here.

According to the DAT Barometer, used EVs have a resale value that has evolved differently from combustion engine vehicles.

For example, a three-year-old fuel-using car can still be sold for a price that represents approximately 65 per cent of its new cost.

In contrast, a similar three-year-old eCar could be sold for only 54 per cent of its original price.

Now that EV prices are dropping, this can affect people who are paying to lease or who expected costs to remain high for a long time.

This worries companies with leasing contracts, especially because they are not sure how to market used vehicles at a competitive value compared to the reduction in prices of new models.

Currently, there is a lot of uncertainty among German companies and individuals about whether there will be more subsidies and whether eMobility really has a future.

Electromobility is the next logical step in the mobility sector,” emphasizes Timo Kauffmann.

About BBNM e.V.

The Federal Association of Consulting for New Forms of Mobility e.V. is dedicated to significantly promoting the transition to mobility in Germany by applying specific expert knowledge.

This is with the aim of improving sustainable mobility in the country in the future through high-quality advice.

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