More

    Germany’s electric-car growth in October unlikely to reverse the situation

    08 November 2023

    germany

    Germany saw new-car registration return to growth in October. This followed a small market drop in September, not helped by changes to electric-car purchase incentives.

    According to new data published by the Kraftfahrt-Bundesamt (KBA), a total of 218,959 new cars were registered in Germany last month, marking an increase of 4.9% from October 2022. While private registrations increased by 6.7%, businesses and fleets made up the majority of the market last month at 63.9%.

    Germany’s October registration results were also the weakest of the big five European markets. France, Spain and Italy, as well as the UK, all posted stronger double-digit growth figures.

    From January to October, the entire German new-car market recorded 2,357,025 registrations, equating to a year-on-year growth of 13.5%. However, when compared with the pre-COVID-19 levels of 2019, Germany’s new-car numbers were down 22.1%.

    No reverse in trend

    After several turbulent months, battery-electric vehicle (BEV) registrations in Germany appeared to reach calmer waters in October. A total of 37,334 new all-electric models took to the country’s roads last month, up 4.3% year on year, capturing a market share of 17.1%.

    Business BEV purchase incentives were withdrawn at the beginning of September. This resulted in a large number of all-electric registrations being pulled forward, as companies rushed to take advantage of favorable rates. The powertrain saw registrations increase by 170% in August ahead of the change, which was then followed by a 28.6% slump in September.

    ‘October brings a temporary autumnal ray of hope in new registrations, but we cannot see a turnaround in the trend in the automotive trade,’ said ZDK vice president, Thomas Peckruhn.

    ‘The slight increase in battery-electric cars can be attributed to the beginning of the final push for the environmental bonus, which will be reduced from 1 January 2024. However, the willingness to buy has not increased dramatically and customers are still very reluctant,’ he added.

    Petrol still leads

    Elsewhere in the electric-vehicle (EV) market, plug-in hybrids (PHEVs) continued to sink in popularity. Only 16,361 new PHEVs hit the road last month, resulting in a year-on-year fall of 49%. So, while BEVs made up 17.1% of the new-car market, PHEVs accounted for just 7.5%.

    Combined, full and mild hybrids recorded 57,575 registrations in October, up 57.9%, to claim 26.3% of the market. Just 1,089 new cars were powered by liquid petroleum gas (LPG), up by 17.5%, while 65 units were fueled by natural gas (down 48.4%). This meant the total gas powertrain market share reached 0.5% last month.

    Petrol continued to lead the market with 71,646 units registered, up 7.5%, with the powertrain securing a market share of 32.7%. Meanwhile, diesel continued its descent, accounting for 15.9% of new-car registrations with 34,881 new units hitting the roads, down 4.6% on October 2022.

    Production under pressure

    According to a survey conducted by the ifo Institute, Germany’s automotive climate cooled from September to October. ‘Companies in Germany’s automotive industry rate their current business situation as significantly worse than in the previous month,’ said Anita Wölfl, a specialist at the ifo Centre for Industrial Organisation and New Technologies.

    While expectations for the coming months did improve slightly, hopes remained broadly subdued. There was a marginally more confident assessment of the situation regarding vehicle orders, even though there was a slight shrinkage in current work. ‘However, the automotive order backlog is still quite high compared to the long-term average,’ Wölfl added.

    Meanwhile, the Association of the Automotive Industry (VDA) found that 85% of suppliers and medium-sized manufacturers it surveyed felt heavily burdened by bureaucracy. Many of these companies said the effort involved in completing non-value-adding reports has increased, taking up time and generating costs.

    Energy costs were also a major concern. Over 70% of respondents said they were heavily or very heavily burdened by the high price of electricity, while 59% said they continue to be severely or very severely challenged by the cost of gas.

    The VDA’s survey also revealed that investment plans are shifting. More than one in three companies surveyed reported plans to invest outside of Germany. Relocation destinations included other EU countries, Asia, and North America. A further 14% of companies claimed to be looking to cut back on investments, while only 1% stated they wanted to increase funding figures in Germany.

    ‘Our survey clearly shows that medium-sized automotive companies in Germany suffer immensely from excessive bureaucracy and high energy costs,’ said Hildegard Müller, president of the VDA. ‘The fact that more and more companies are shifting investments abroad is a warning signal for Berlin. It is important to take countermeasures and replace regulatory small-scale with long-term strategies for more competitiveness.’

    +

    Germany saw new-car registration return to growth in October, with a total of 218,959 new cars registered, marking a 4.9% increase from the previous year. Private registrations experienced a 6.7% increase, while businesses and fleets accounted for the majority of the market at 63.9%. However, Germany’s registration results were weaker compared to other major European markets, such as France, Spain, Italy, and the UK, which all posted stronger double-digit growth figures.

    From January to October, the German new-car market recorded 2,357,025 registrations, representing a year-on-year growth of 13.5%. However, when compared to the pre-COVID-19 levels in 2019, the German new-car numbers were down by 22.1%.

    No reverse in trend

    Battery-electric vehicle (BEV) registrations in Germany appeared to stabilize in October after a period of turbulence. A total of 37,334 new all-electric models were registered, indicating a 4.3% increase compared to the previous year. BEVs captured a market share of 17.1%.

    The withdrawal of business BEV purchase incentives at the beginning of September led to a surge in all-electric registrations as companies rushed to take advantage of favorable rates. This increase was followed by a 28.6% slump in September. ZDK vice president, Thomas Peckruhn, stated that while October brought temporary hope for new registrations, the overall trend in the automotive trade remained unchanged. The slight increase in battery-electric cars can be attributed to the final push for the environmental bonus, which will be reduced starting from January 2024. However, customer willingness to buy has not significantly increased, and there is still significant reluctance among buyers.

    Petrol still leads

    In the electric-vehicle (EV) market, plug-in hybrids (PHEVs) continued to decline in popularity. Only 16,361 new PHEVs were registered, resulting in a year-on-year fall of 49%. While BEVs accounted for 17.1% of the new-car market, PHEVs only represented 7.5%.

    Combined, full and mild hybrids recorded 57,575 registrations in October, reflecting a 57.9% increase and claiming 26.3% of the market. Additionally, 1,089 new cars were powered by liquid petroleum gas (LPG), up by 17.5%. However, only 65 units were fueled by natural gas, representing a 48.4% decline. The total gas powertrain market share reached 0.5% last month.

    Petrol remained the dominant powertrain in the market, with 71,646 units registered, reflecting a 7.5% increase and securing a market share of 32.7%. Meanwhile, diesel accounted for 15.9% of new-car registrations, with 34,881 new units hitting the roads, indicating a 4.6% decline compared to October 2022.

    Production under pressure

    According to a survey conducted by the ifo Institute, Germany’s automotive industry encountered a cooling business climate from September to October. Companies in the sector rated their current business situation significantly worse than the previous month. While there was a marginal improvement in expectations for the coming months, overall hopes remained subdued. The assessment of the situation regarding vehicle orders showed slight confidence, although there was a slight shrinkage in current work. The automotive order backlog still remained higher compared to the long-term average.

    The survey also revealed that 85% of suppliers and medium-sized manufacturers felt burdened by excessive bureaucracy, stating that completing non-value-adding reports has become more time-consuming and costly. Energy costs were another major concern, with over 70% of respondents heavily burdened by high electricity prices and 59% severely challenged by the cost of gas.

    Investment plans among companies in the automotive industry are shifting, with more than one in three companies planning to invest outside of Germany. Relocation destinations include other EU countries, Asia, and North America. An additional 14% of companies are considering cutting back on investments, while only 1% expressed a desire to increase funding within Germany. The shift in investment signals a warning for Berlin, emphasizing the need for countermeasures and long-term strategies to enhance competitiveness, as excessive bureaucracy and high energy costs continue to burden medium-sized automotive companies.

    Latest articles

    Related articles