Europe’s largest auto market belongs to Germany, and usually, the trends we see in this country continue to expand to other similar markets such as Norway. What makes this country triumph over others when it comes to the adoption of electric vehicles is the active support by the German Federal Government.
In December 2021, the share of electric vehicles (both plug-in and battery) reached a new high with 35.7%, presenting a 26% year-on-year increase. Out of that number, 21.3% belongs to battery electric vehicles.
We can review some of the factors that helped the country reach this new high. For one, the government is working on accelerating the shift to electric vehicles. Chancellor of the traffic light coalition, Olaf Scholz, extended the aid for the purchase of electric vehicles.
The German government announced a recovery plan in June 2020 as a result of the economic effect of the COVID-19 epidemic, which included €8 billion to boost electric car adoption and the implementation of charging infrastructure. For automobiles costing less than €40,000, the purchase incentive for all-electric cars was temporarily increased from €6,000 to €9,000. For the purchase of plug-in hybrids, secondhand automobiles, and leasing, the benefits are lesser. Until the end of 2025, the extra incentive will be accessible. The initial target of one million electric vehicles by 2020, which Angela Merkel initially announced in 2010, was met in July 2021.
The goals that Germany has imposed on itself are no small matter either. Over a million charging stations by 2030 when there are currently more than 46,000 is ambitious to say the least. In 2022, buying a purely electric car will continue to be subsidized to a maximum of €9,000, the government announced. The help could go up to €6,750 for plug-in hybrid cars.
Meanwhile, diesel’s share of the market declined from 23.9% in Q4 of last year to 16.2% in the Q4 of this year, going towards near-zero by the end of 2023. Old-school gasoline’s share of the market declined from 39.9% in Q4 2020 to 33.6% in Q4 2021, thus it may appear to have roughly 5 years remaining, but it will have nowhere to hide once diesel-type vehicles are phased out.
Another interesting observation can be made from the graph above. Namely, SUVs are NOT the highest sold electric cars in Germany, a trend we’ve seen in other European countries (the Netherlands for example). Besides the evident leader Tesla, the other 4 vehicles that made it into the top 5 have no more than 4 meters in length each. These are all small and practical vehicles, built for day-to-day commutes.
The true power of electric vehicles and their sustainability is slowly becoming evident to the global masses. As the government drives the subsidies and the technology becomes more affordable, we will experience greater adoption of electric vehicles, in all sizes.
