"Electric vehicle mobility is experiencing a spread of ownership and control among the general public"

The environmental bonus subsidy for electric vehicles in the state came to an end at the close of 2023, marking a significant milestone in the shift towards greener transportation options. This transition, however, is not without its challenges, as the EU's decision to ban new cars with harmful emissions from 2035 faces opposition and potential softening scenarios.

According to a recent study by Alexander Timmer, a partner and managing director at the Munich-based consulting firm Berylls by AlixPartners, the powertrain transition is underway on various continents. The EU, in particular, is grappling with the question of whether to allow new cars with hybrid drives beyond 2035. Mr. Timmer estimates the probability of the EU's planned combustion engine ban being softened at about 50 to 80 percent.

One of the concerns is the potential emissions from hybrid vehicles. The registration of cars with hybrid drives beyond 2035 would result in emissions roughly equivalent to the emissions from 7.2 million kilometers of highway driving or the production of 600,000 tons of steel. In Europe, additional CO emissions of between half a million and one million tons of carbon dioxide per year could result from the registration of cars with hybrid drives.

The need for electric cars, especially in the lower price ranges, is acknowledged in both China and Europe. The second half of this decade will likely see a shift towards democratizing electromobility. However, a widespread deployment of electric cars with range extenders in Europe by the end of the decade seems unrealistic due to underdeveloped charging infrastructure.

In China, electric cars with a range extender are being promoted as a bridge solution in rural areas outside of Beijing and Shanghai, where charging infrastructure is also underdeveloped. Meanwhile, both in China and in Europe, there is a shift from the premium segment down to the volume segment when looking at the new vehicle generations.

Despite these challenges, registrations of new electric vehicles are on the rise again. A significant portion of the newly registered electric vehicles are initially registered to dealers themselves, indicating a growing interest among consumers. Many car buyers, however, remain undecided about whether to switch to an electric vehicle.

The EU's commitment to phasing out fossil fuel use, despite opposition from some car industry leaders who warn against negative economic impacts, suggests that the likelihood that the EU’s planned ban on new registrations of fossil fuel combustion engines after 2035 will remain in force appears high. It is not yet clear how long electric vehicles will remain exempt from vehicle tax in Germany.

The Central Association of the German Automotive Industry (ZDK) has pointed out this trend, noting that the currently low BEV share in the fleet vehicles used for business purposes (around 23 percent) may quadruple in five years, although this goal may be ambitious.

In conclusion, the transition to electric and hybrid vehicles is a complex process, fraught with challenges but also filled with opportunities. As the industry continues to evolve, it will be interesting to see how these trends unfold in the coming years.

"Electric vehicle mobility is experiencing a spread of ownership and control among the general public"