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Germany’s goal of 15 million BEVs by 2030 is getting further and further away

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Germany’s goal of 15 million BEVs by 2030 is getting further and further away

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At an auto industry association’s start-of-the-year conference in Berlin last week, BMW CEO Oliver Zipse felt vindicated. On stage, German Transport Minister Volker Wissing was explaining to policymakers and industry executives the importance of technological openness in reducing emissions in transport. “A singular focus on BEVs by policymakers and manufacturers is leaving Germany’s most important industry exposed,” he said, predicting a collapse in demand for electric vehicles. Zipse has been making the same pitch for years, advocating flexible production lines for combustion, hybrid and even hydrogen-powered cars. The CEO’s cautious strategy – which is on par with that of his predecessor – has in the past been attacked as not aggressive enough compared to the challenge of electric leader Tesla. Now however, Zipse seemed to have predicted the future. With EV adoption slowing and plug-in hybrids providing a return on margins, BMW’s cautious approach no longer seems like a bad choice. “In Germany, demand for electric vehicles does not look good this year,” said Jan Burgard, head of strategic advisors at Berylls. “The upper end of the BEV market is almost saturated and there is little supply in the low-end 25,000 euro segment.”

While a number of new models and financing options have drawn consumer attention to electric, a few years after the BEV revolution, infrastructure and price still remain barriers to widespread adoption. In Germany, sales are set to fall 14% this year in response to the government’s removal of subsidies in December, the first drop since 2016, according to the VDA. Thursday’s event was an attempt to inject some optimism into an increasingly gloomy industry. Wissing praised German car manufacturers and extolled their technology as “celebrated abroad”. When asked what the government could do to support the German electric vehicle market, the minister replied: increase infrastructure. Yet on this front, Berlin has lagged behind. In October 2022, Wissing launched an ambitious plan to invest 6.3 billion euros in a national charging infrastructure that would allow the number of charging stations in Germany to increase to one million by 2030. It didn’t go so quickly as expected. Last September there were only around 105,000 functioning public charging stations in Germany according to the infrastructure authority. At the current construction rate, the VDA noted, Germany will have to triple installations if it wants to reach its 2030 target.

While policymakers and industry representatives at the VDA event agreed that charging is key to reigniting interest in electric vehicles, no one would say who should fund such an infrastructure expansion or how. Rising electricity prices have further reduced demand according to a note from a Deutsche Bank analyst. The other major challenge to BEV uptake is price. The coalition must meet its goal of putting 15 million electric vehicles on the roads by 2030 or face missing emissions targets. In November only around 1 million – 2% of all vehicles in circulation – on German roads were 100% electric. Without further subsidies, analysts think reaching the 2030 goal will be a challenge. For Zipse all this represents a sort of revenge. In an interview with Handelsblatt, BMW’s CEO got straight to the point, accusing those ringing the death knell for combustion engines as “negligent,” given how far electric vehicles had to go.

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