Mobility Portal, Spain
Date: May 2, 2024
Inés Platini
By Inés Platini
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German electromobility market overview: Sales decline but expected to “rise again”

Julia Loder shares with Mobility Portal Europe the key findings of her postgraduate research on how to "overcome fossil fuel dependence in a carbon-constrained world," primarily focusing on the German car manufacturers.
Volkswagen plant Wolfsburg, Golf 8 Production

Undoubtedly, one of Germany’s strongest markets is the automotive industry, which is currently having to adapt to electric mobility.

In this journey, the country is experiencing various ups and downs, primarily in the registrations of electric vehicles (EVs), which showed a decline of 14 per cent in the first quarter of the year compared to 2023.

Julia Loder, PhD candidate in International Affairs and Political Economy at the University of St.Gallen.

In this context, Mobility Portal Europe engages in dialogue with Julia Loder, who, for her doctoral thesis at the University of St. Gallen, has researched the interaction between companies and German public policies to achieve a low-carbon economy.

As a starting point, Loder points out that the recent news about the decline in EV sales in her country “is causing fear in some quarters“.

“We thought electric mobility was going to be the future, so why do we have this setback now?” she notes.

To answer this question, the researcher cites Julia Poliscanova, Senior Director Vehicles and Emobility at Transport & Environment (T&E).

“During the Nordic EV Summit, Poliscanova mentioned that the development of a market is never just a straight line upwards, but always has some ups and downs, and I think we are in one of these downturns, but will go up again,” Loder emphasizes.

In a sense, this decline “has not been a surprise,” considering the elimination of the environmental bonus in December 2023.

Currently, the prices of most EVs are higher than internal combustion ones, mainly due to the battery they carry.

Costs are an important factor when the user decides whether to switch to this sustainable mobility.

Therefore, having subsidies is still a determining incentive.

Despite this, the leading German automakers quickly decided to offer discounts to continue their sales.

But, were these discounts genuinely aimed at promoting electric mobility, or were they applied to avoid losing sales?

In her postgraduate research, Loder focuses on the three major German car manufacturers: Volkswagen, BMW, and Mercedes-Benz.

In this regard, it is important to note that Volkswagen positions itself as a brand with an offer aimed at the general public, as suggested by its name: “Volk” means “people,” and “Wagen” means “car” in German.

While Mercedes-Benz and BMW are companies that focus mainly on the luxury car segment.

“All three companies have announced climate targets, but with different levels of ambition,” Loder explains.

In this context, regarding the brands’ response to the removal of the eBonus, she explains: “I consider that for VW, reducing the price is a way to make their cars truly affordable for more people and to remain faithful to the purpose they have had since their foundation.”

“And for Mercedes and BMW, reducing prices may also have a bit to do with strong competition, but perhaps there are certain limits when doing so because they still want the product to be perceived as luxury,” she adds.

However, the competition is not only internal, but it also includes the strong electric vehicle market in China, which is entering the market with increasing force, not only in Germany but also in Europe in general.

Moreover, BYD, an Asian brand, will be the official sponsor of the Eurocup to be held in June in Germany.

In this regard, Loder analyzes that this may partly concern local manufacturers, but “they also sell and want to sell their cars in China.”

“On the one hand, they are competitors, but then they also collaborate with some,” she emphasizes.

Is price the sole factor influencing the purchase of EVs?

“Price is a factor, but not the only one,” confirms Julia Loder on this matter.

In one of the three investigations she conducted, the postgraduate student concluded that potential private buyers also consider the overall cost of the vehicle throughout its lifecycle.

In this regard, it is being demonstrated that EVs are cheaper to maintain than an internal combustion engine car, which could be an incentive to switch to a sustainable vehicle.

“The question always is, how expensive is it to charge, where does the electricity come from, and what is my access to available charging infrastructure?” she explains.

What led Julia Loder to choose eMobility for her thesis?

She has always been interested in sustainability and climate change, which led her to write her master’s thesis on why companies choose to go green, specifically analyzing the RE100 initiative.

“Then I continued with my dissertation, where I was going to analyze the intersection between the state and policies on one hand, and businesses or enterprises on the other,” she details.

This is due to her curiosity about how companies also influence policies in the space of climate change and energy.

In this field, she noticed that in the energy sector, the goal is already quite clear in Germany, where the phase-out of coal and nuclear energy has already been decided.

“In Germany, we have already phased out nuclear energy, and we are phasing out coal. It is clear that we are moving towards renewable energy,” she points out.

In this journey, she finally arrived at the sector of electric and sustainable mobility and decided to analyze this in Germany.

“That’s why I started looking at car manufacturers, and in the end, my three works in the dissertation analyze the policy level, the company level, and the level of the individual consumer,” she explains.

So, does electromobility have a future in the country?

“I believe that the expansion of the EV market will continue, although I cannot determine how quickly it will happen,” concludes Julia Loder.

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