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Sales of electric cars have fallen dramatically. At the same time, the end of combustion engines is being questioned by some parties. Dealers, manufacturers and suppliers see their billion-dollar investments at risk.
The demand for electric cars should actually be booming. But since the unannounced and completely surprising end of government funding for electromobility at the end of last year, sales in Germany have fallen dramatically. Dealers like Joachim Müller from Lebach in Saarland also notice this. The electric car business is going badly.
“Unfortunately, the electric car is still a little more expensive than the combustion engine. The customer’s trust in the electric car is not there yet,” says the managing director of the Müller Group in Lebach. And every customer who buys an electric car has to justify why they bought it.
Sharp drop in value due to battery fear
In 2024, the number of new registrations of electric cars literally collapsed. According to the European Automobile Manufacturers Association (ACEA), around 12.5 percent of all new registrations were electric cars in the first half of the year. This puts Germany below the European average. In 2023 the rate was still 18.4 percent.
One reason for the great skepticism of customers: batteries. The battery in particular determines a large proportion of the total price of electric cars. Since electromobility is comparatively newer than the technology behind conventional combustion engines, leaps in innovation regularly occur here. Manufacturers are bringing ever more efficient battery systems onto the market at short intervals.
For electric cars with older technology, the so-called residual value drops rapidly – if anyone wants them at all. Car dealers like Joachim Müller observe that customers have become very reluctant to buy new cars due to uncertainty and fear of this future loss of value.
Companies can hardly plan long-term
The reluctance of buyers is not only affecting manufacturers, but even more so among suppliers, emphasize industry experts such as Professor Klaus-Jürgen Schmidt from the Institute for Production and Logistics Systems (IPL) in Saarbrücken. Because if few people buy electric cars, the infrastructure behind the car manufacturers will also falter.
Since the demand for electric cars fluctuates greatly depending on political support, companies can hardly plan long-term, says Schmidt. The industry therefore needs clear framework conditions to manage the profound transformation from combustion vehicles to electromobility. “Many suppliers have to make significant investments to adapt their production processes and product ranges. This requires not only financial resources, but also time to build up new know-how,” explains the expert.
The market share of electric cars in the overall population on Germany’s roads is still very low. According to ADAC, of a total of around 50 million registered cars, only around three percent are fully electric.
A new purchase bonus for electric cars soon?
Low market share, poor demand and crisis among supplier companies: In order to stimulate the economy around electromobility again and increase the trust of customers and industry, Saarland’s Economics Minister Jürgen Barke presented a new initiative to the Federal Council. This also includes a new purchase bonus for electric cars and a special fund for electric mobility.
For SPD politician Barke, there is no alternative to a new edition of state subsidies. Car expert Schmidt does not see a purchase bonus as a panacea, but at the same time, under the right circumstances, it could give the industry the boost it needs – especially for suppliers like ZF-Friedrichshafen or Bosch: “Long-term, stable framework conditions. That is, when it comes to goals and as far as implementation and the corresponding funding opportunities are concerned.”