Will Germany be the Next Norway in Europe’s Electric Vehicles Market?

The competition for electric vehicle manufacturers has always been neck-and-neck in markets in Norway and Germany. Germany overtaking Norway with increasing sales of fully electric cars does not mean that the Norwegians’ love for electric vehicles is declining, but the favorable market conditions in Germany for electric mobility. There are multiple factors and market dynamics that are changing the electric vehicle trends in German markets. This article elucidates the triggers for booming electric vehicle production and sales in Germany and how governments’ stand remain instrumental in the positive growth of the electric vehicles market in the country.

The environmental awareness about the carbon footprint of automotive industry is highest in European countries. While the entire Europe is undergoing a rapid transition from automobiles with conventional internal combustion engines (ICEs) to electric vehicles, Norway is mainly known for the exceptionally high sales of electric vehicles in the country. However, the market for electric mobility in Germany is expected to surpass that in Norway in terms of sales as well as production of electric cars in the coming years.

Government Incentives and Favorable Regulatory Frameworks Make a Difference

Norway emerged as an early regional hot spot for electric vehicles in the early 2010s; thanks to generous government incentives. But the governing bodies in Germany are ramping up subsidies for electric vehicles businesses in the country, which is contributing to the growth environment for businesses in the country.

The German government, in collaboration with the automotive industry in the country, is signaling a potential rise in joint subsidies for the purchase of electric vehicles. The consumer subsidies are likely to be increased from €4,000 to €6,000 for electric cars that cost less than €40,000. Also, subsidies were also increased from €3,000 to approximately €4,500 for plug-in hybrid vehicles in the same price range. The subsidies are likely to increase by almost 25% for electric cars that cost over €40,000, however, any car priced over €60,000 will not supported by the scheme, announced the German government.

Angela Merkel, the Chancellor of Germany, also declared recently that the government is soon likely to invest over €3.5 billion to bolster the development and expansion of charging station infrastructure for electric vehicles in the country. Today, there are around 21,000 electric car charging stations in Germany, and the government aims to develop over 50,000 publicly accessible charging stations across the country, by 2022. By the end of 2030, Merkel aims to increase the number of electric car charge points to go beyond 1 million, which is considered as an important move to bolster electric vehicle sales in the country.

This is expected to further boost sales potential of fully electric cars in the country. As a result, a mounting number of electric car manufacturers are entering the country, to tap in to the potential for business in Germany. In November, a global giant in the electric vehicles market – Tesla declared its plans to open its new manufacturing factory – ‘Gigafactory 4’ in on the outskirts of Berlin, where it plans to produce 500,000 vehicles per year. German multinational – thyssenkrupp has also been known to be in advanced stage talks with the company for offering its services to the company’s first ever electric vehicle manufacturing capacity in the European Union.

Volkswagen is another leading stakeholder in the electric vehicles industry that has announced to have begun the mass production of its ID.3 electric cars in the country. The company also declared its plans to only produce electric vehicles in the company’s facility in the eastern town of Zwickau, with the capacity of producing 330,000 electric cars every year, starting in 2021.

Posted by Aditi Yadwadkar

Aditi Yadwadkar has written extensively on the automotive and electronics industries. Being an electronics engineer and a passionate research writer, she enjoys learning about new-age automotive technologies and analyzing their business aspects. Her inquisitiveness towards the electronics industry and convergence of technology with automotive industry makes her blog uniquely insightful for business owners and industry players.