Status: 04.01.2023 4:17 p.m
More cars were sold in Germany again last year. Especially electric cars were popular. But experts predict difficult times for Germany’s key industry.
Car sales in Germany rose again in 2022 after two declines in a row. A total of 2.65 million new cars hit the streets, as reported by the Federal Motor Transport Authority (KBA). That is 1.1 percent more than a year ago. Before the pandemic broke out in 2019, German manufacturers and importers had sold 3.6 million vehicles. In December alone, 314,318 cars were newly registered, 38.1 percent more than in the same month last year.
Demand exceeded supply
In terms of brands, VW defended its leading position and had a market share of 18.1 percent, followed by Mercedes with 9.2 percent, Audi with eight and BMW with 7.9 percent. The electric car manufacturer Tesla achieved a market share of 2.6 percent – albeit with an upward trend: Tesla new registrations soared by 76.2 percent.
In 2022, the auto industry was still struggling with the shortage of memory chips and other parts. Supply lagged behind demand due to production problems. The car manufacturers can still draw on the pent-up orders for a while. In the longer term, however, industry experts expect demand to fall because high inflation could dampen consumers’ purchasing power and companies’ willingness to buy new company cars.
Will the demand for electric cars collapse?
Electric cars were very popular in Germany last year. Good for the energy transition, good for the German car manufacturers; But their joy at the spotless balance sheet is likely to be short-lived, because this year consumers will probably treat vehicles with alternative drives with much sharper fingers, predicts Ferdinand Dudenhöffer from the Center Automotive Research. “We are clearly falling behind on a global scale, because the funding pots are also being significantly reduced.”
An overview: For e-cars with a list price of up to 40,000 euros, there is no longer 6000 in the current year, but only 4500 euros from the state. The federal government is now subsidizing e-cars that cost between 40,000 and 65,000 euros with only 3,000 euros instead of the previous 5,000 euros. For plug-in hybrids, there will be no more funding this year. The Association of the Automotive Industry speaks of a “nonsensical signal” that politicians are risking the transformation to e-mobility.
Not only the acquisition is more expensive
For car expert Dudenhöffer, this is not the only reason why it has been a difficult year for the e-divisions of German car manufacturers: “In addition, we have to experience that e-cars are also becoming more expensive to use. Because electricity prices have risen significantly and remain at a high level.” In addition, the production of electric cars is also becoming more expensive, according to Dudenhöfer, because: “Batteries make up up to 40 percent of an electric car. They are becoming more expensive because the raw materials are becoming more expensive.” Added to this is high inflation. All of this should significantly dampen the desire to buy.
But experts see a problem not only with demand, but also with supply. The Association of the Automotive Industry calculates that German manufacturers are already offering around 120 electric models worldwide and that there should be 160 models in three years. But many experts think that the German car manufacturers are too comfortable in the traditional business with the combustion engine. “The market position that Germans have had in classic cars in recent decades is not yet in e-cars,” warns Jürgen Pieper from Bankhaus Metzler. “They lack the special, the groundbreaking innovation that you see from the Chinese or from Tesla.” It’s still chasing, according to Pieper.
Tough competition from China and the USA
The US is also promoting electric cars whose batteries are made in the United States. And both countries, China and the USA, could produce more cheaply, says Dudenhöffer: “Because battery production is very, very energy-intensive, and we have the highest energy prices in the world in Europe, especially in Germany. We shouldn’t delude ourselves that in three will be back to normal within four years, like in the USA or in China.”
China and the USA are among the most important sales markets for German car manufacturers. They have also been selling more and more e-cars there in recent years. It remains to be seen whether this will remain the case under the difficult conditions.