Germany’s target of 15 million EVs – a distant dream?
By 2030, Germany wants to have 15 million electric vehicles (EVs) on its roads. But at the Munich-based auto show IAA in 2023, the target still looked like a distant dream.
Opening the IAA, Chancellor Olaf Scholz said carmakers and policymakers need to work as a “team” to promote the uptake of electric vehicles and highlighted that he was a “committed member” of this team.
And it’s high time for a team effort. Currently, only 1.2 million EVs are driving on German roads.
Scholz reiterated the government’s goal to increase this number by tenfold by 2030, but experts cast strong doubts on whether it will be reached.
In a market forecast based on current sales and future growth expectations, Stefan Bratzel from the Center of Automotive Management in Bergisch Gladbach expects only eight million EVs on German roads by 2030.
Other, more optimistic forecasts, such as by the German Aerospace Centre, land at 10 to 11 million EVs by 2030, still four to five million below the government targets.
“We have to do a reality check, dear government,” Bratzel told an IAA side-event run by carmaker Ford. “Either we change the goal of the 15 million, or we think of ways of rapidly increasing the ramp-up of electromobility.”
So, what can be done to supercharge the EV uptake?
In his speech, Scholz said it would be the policymakers’ main task to secure sufficient charging infrastructure, for which he wants to oblige petrol station operators to also provide fast-charging stations.
His goal was for EV charging to be “as easy or easier” as refuelling petrol cars – a slogan EU experts will remember well from debates around the Alternative Fuel Infrastructure Regulation (AFIR).
Another task for policymakers, Scholz said, would be to ensure low electricity prices, which the government wants to do by scaling up wind and solar power. However, so far, the expansion lags far behind the targets envisaged by the government and calls to subsidise prices for large industries could lead to a hike in electricity prices for private consumers.
For his part, Bavarian Prime Minister Markus Söder, who is campaigning and eager to win car drivers’ votes, criticised Scholz for reducing the subsidy that EV buyers can get.
The bonus for new EVs was reduced in January from €5,000 to €3,000 for cars which cost above €40,000, and from €6,000 to €4,500 for cheaper cars. What is more, since September 2023, commercial buyers no longer get any bonus.
“I think it is wrong that we have reduced the subsidies bit by bit, especially because we are in an international context,” Söder said in his speech right before Scholz. “You can only strengthen your own brands by supporting your own domestic market.”
Experts however question the effectiveness of higher subsidies, as they could also lead to new EVs being re-sold quicker, meaning they wouldn’t help to keep EVs on the road for longer.
Meanwhile, carmakers need to do their part as well, Scholz stressed.
During his tour of the exhibition, Scholz called on carmakers to broaden their offer of cheap EVs, explicitly highlighting Volkswagen (VW) while rebuking luxury brands like Mercedes-Benz.
He was “particularly looking forward” to VW’s exhibition stand, Scholz said, “because the point is that we are not only showing electric mobility with vehicles that are great but cost a bit more but also with other vehicles that many can afford.”
And for this goal to be met, Scholz is also willing to bet on Chinese manufacturers, which have started to offer EVs in Europe (with, however, much higher prices than in their home market).
“Fair competition stimulates business. It is in the interest of consumers,” he stressed.
The message to German carmakers, who have so far focused on pricier EVs with higher profit margins, was clear:
Build cheap EVs now, or lose against the Chinese – the government will not protect you.
– Jonathan Packroff
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