Germany at the Brink of Electrified Mobility by 2025: In-depth Analysis

The German automotive industry is facing a significant crisis in its battery electric vehicle (EV) market, with the market collapsing significantly due to a variety of factors. According to the CAR institute, this is largely due to shared subsidies, high prices, and insufficient charging stations.

In an attempt to address these issues, the German government has recommended an 8-point plan to promote EVs. This plan includes raising the tax incentive price limit for electric company cars to €100,000, enabling special depreciation for EV purchases, extending EV tax exemptions until 2035, and accelerating the expansion of a comprehensive and user-friendly charging infrastructure.

However, the crisis is not limited to the German market alone. Tariffs on Chinese EVs also affect European joint ventures, adding to the complexity of the situation.

Meanwhile, companies like BYD and Geely are scaling quickly, acting more digitally, and being more aggressive on price. This competitive landscape calls for the promotion of affordable entry-level electric vehicles under €25,000.

Policy-driven market decisions in Germany indicate that purchase decisions for EVs are less influenced by technology or environmental awareness, but rather by government incentives. Targeted support measures for low-income buyers are seen as more effective than blanket premiums.

Strategic investments in the battery industry are also recommended to maintain competitiveness. European manufacturers are losing ground due to bureaucratic hurdles and inconsistent regulations, a problem that needs urgent attention.

The localization of production for risk mitigation is another aspect that has been highlighted. Confidence in electric mobility remains fragile, and accelerated expansion of charging infrastructure is recommended to boost consumer confidence.

Socially targeted EV promotion is another strategy that could help. The CAR institute warns that without a course correction, the German automotive industry risks permanently losing its international leading role. The crisis is not due to technological reasons, but rather a lack of industrial policy consequence and insufficient societal support.

In light of these challenges, trust-building communication at the EU level is recommended to navigate the complexities of the global EV market. The future of electric mobility in Germany and Europe hangs in the balance.