Europe’s largest EV market is about to be hit by a storm of problems.

Germany is Europe’s largest car market and one of the main drivers of EV growth. But that trend is now expected to change, with EV sales expected to decline by 14% for the first time in eight years.

Germany’s VDA, the country’s auto industry interest group, said the number of battery-powered vehicles is likely to fall from 524,000 last year (more than any other European market) to 451,000 this year. There is. Considering Germany aims to have 15 million BEVs on the road by 2030, that number is moving in the wrong direction.

This could be due to many factors, but primarily because Germany ended this EV subsidy program in December, a full year earlier than expected. Add to that inflation, rising car prices and “substandard charging infrastructure,” and a decline in sales is inevitable, Automotive News Europe writes.

according to car news europemanufacturers are delaying EV launches and rental companies are “purchasing fewer of their own vehicles.”

Still, even after the subsidies disappeared, automakers like Tesla, Volkswagen, Audi, Stellantis, and Mercedes-Benz jumped in to make up for it, at least for a while.

Renault on Monday announced plans to postpone the IPO of EV startup Ampere, citing weak demand and difficult market conditions. Bloomberg also reported that Volkswagen is making similar efforts with its EV business, with people familiar with the matter telling Bloomberg that VW is delaying IPO plans for its battery division.

Still, this decline isn’t all that shocking. VDA forecasts that Germany’s passenger car market will decline by 1% this year to 2.82 million units. However, the VDA says this is part of a downward trend that has been occurring since the pandemic.

According to VDA estimates, the global market should increase by 2% to 77.4 million units, compared to 78.8 units before the pandemic. The global market is expected to increase by 2% to 77.4 million units.

Germany is expected to produce 1.45 EVs this year, but much of that production will be exported, the report said. Germany is the second largest producer of BEV passenger cars in the world after China, but considering that China will produce 6.6 million BEVs in 2023 and Germany will produce 1.2 million, the difference is quite large. For comparison, the U.S. produced 1.1 million EVs last year, according to data from VDA and S&P Global Mobility.

Electrek’s view

Again, it should be noted that the VDA is a lobbyist group for German automakers, backed by powerful BMW, Volkswagen, and Mercedes, and these manufacturers are adapting to EVs and are pushing China’s BYD and Tesla. It is said that they are in a difficult position as they are struggling to keep pace. Additionally, Porsche Chief Financial Officer Lutz Meschke said Europe may postpone its ban on ICE cars in 2035 due to slowing demand for EVs. So as far as what’s to come, this is not encouraging news.

Good-paying jobs with benefits and protections are also at risk. Volkswagen says it will cut thousands of jobs in Germany to cut costs by $11 billion, and German EV suppliers are cutting jobs, including one of the country’s largest suppliers. The company said it may cut 20% of its workforce due to low demand.

However, the automobile industry is always full of ups and downs, and EVs are not completely immune to this influence. Still, European automakers are churning out new models to stay competitive. Meanwhile, BMW is currently investing $711 million (650 million euros) to convert its headquarters factory in Munich to exclusively produce electric vehicles by the end of 2027, with the aim of promoting the next-generation Neue Classe EV. He said he is doing so. The company expects to achieve its goal of a 15% share of battery electric vehicles and sell 500,000 BEVs in 2024.