Electrifying Savings: Skyrocketing Discounts on E-Cars in Germany
Greater Savings on Electric Vehicles -Enhanced Due to CO\_{2} Reduction Objectives - Increased savings on electric vehicles due to set CO₂ goals
Discounts on electric vehicles are soaring: In April, they surpassed a staggering 16.7%, up from 14.9% in March, according to automotive expert Ferdinand Dudenhöffer. That's around 1,000 euros off a typical model, marking a 3% increase since the start of the year.
"April saw the breaking point for higher discounts on electric cars," says Dudenhöffer, who scrutinized the online prices for the top 20 popular electric vehicles in Germany. He predicts that these discounts will keep rising in the upcoming months.
These steep price cuts are largely driven by two factors: a) the EU's CO2 targets, and b) changes in the distribution system at some brands, leading to aggressive sales promotions via dealers to expand sales. Manufacturers have a vested interest in reigniting the market.
Interestingly, discounts for conventional vehicles and plug-in hybrids have slightly decreased in April, while they've experienced a more gradual increase since January. This narrows the price gap between electric cars and conventional vehicles to its lowest level since the end of state environmental bonuses.
Experts foresee electric mobility poised for a renewed surge due to these increasingly attractive prices. In fact, electric car registrations in Germany have already showed a significant increase this year compared to the previous year.
Behind the Scenes
- Tax Incentives: Germany lags behind other European countries such as France in offering compelling tax incentives for electric vehicles. The tax advantage for electric company cars in Germany is about €9,000 over four years, significantly less than the €24,000 in France[2][3].
- Subsidies: The termination of national subsidies for electric cars has led to a drop in sales, creating strain for European manufacturers. Reintroducing incentives is urged to reverse this trend[4].
- Competition: High production costs and intensifying competition from Chinese manufacturers put Germany's auto industry at risk. Proposals for European-wide subsidies to bolster the sector have been put forth[4].
The Road Ahead
- New Incentives: Given current challenges, there's potential for introducing new incentives akin to France's approach, which could boost electric vehicle sales and spur local manufacturing[4].
- Market Development: The electric vehicle market is on track for continued growth, fueled by increasing consumer awareness and technological advancements.
- Legislation: European Union institutions may consider implementing collective subsidies or other regulatory changes to support energy transition and uphold industrial competitiveness[4].
- The employment policy in the automotive industry of Germany might need to adapt due to the increasing discounts on electric vehicles, as it could impact the distribution system and sales promotions.
- The employment policy in environmental-science sectors could see a boost with the surge in electric mobility, as scientists and researchers might be required to address the challenges and potential solutions associated with this transition.
- The finance sector could benefit from the rise in electric vehicle sales, as it provides funding for these vehicles and may observe an increase in demand for loans or leases.
- Technology companies specializing in electric vehicle components or charging infrastructure could experience growth as more electric cars are sold, leading to a demand for improved technology and infrastructure.
- The community policy in Germany could consider offering additional incentives, such as tax incentives, to promote the adoption of electric vehicles and reduce carbon emissions, following France's example.
