Energy

Electric cars are struggling to get into gear in Germany

Summary

“For the automotive industry, COVID-19 pandemic will stick around more than the virus does,” Ferdinand Dudenhöffer, leader of CAR-Center Automotive Research Institute at the University of Duisburg, told DW. Dudenhöffer pointed to the increasingly growing public debt of Germany in […]

“For the automotive industry, COVID-19 pandemic will stick around more than the virus does,” Ferdinand Dudenhöffer, leader of CAR-Center Automotive Research Institute at the University of Duisburg, told DW. Dudenhöffer pointed to the increasingly growing public debt of Germany in the aftermath of the coronavirus pandemic. He assumes that the resources available to pay off the loans will long be missing in other sectors of the economy. “The automotive sector will be weak in Europe for a while,” he added.

Also, before the onset of the pandemic, pressure on the sector was rising. A lot of investment is needed for electrification and digitization. By eliminating jobs and adopting cost-cutting steps, car manufacturers have been responding. Customer trust, meanwhile, is gradually eroded as individuals ponder what kind of vehicle to purchase next. Electric cars are pricey, and they are miles from where they ought to be with battery technology as well as charging facilities. Around the same time, though, the internal combustion engine appears to have been on the way out, as being one of the key contributors to global heating.

Afterward, came the economic depression that the pandemic triggered. Compared to the previous year, CAR-Center has projected that over 20% of fewer new vehicles will be delivered in 2020. However, it doesn’t mean that people don’t have private vehicles. Statistics from the German Federal Motor Transport Authority (KBA) indicate that by 1 October 2020, some 48.2 million vehicles had been registered, some 460,000 vehicles more than at the beginning of the year. This suggests that older vehicles are powered longer than they were in the era before the coronavirus outbreak. Increasing the change to electromobility, the government needs to discourage this movement from being more ingrained.

The automobile industry is, after all, the fundamental part of the German economy, with over 2 million workers directly and indirectly associated with it. Given this reality, until the conclusion of 2025, discounts of up to $11,000 (EUR 9,000) will continue being paid to buyers of new electric as well as hybrid cars. Suppliers of the automotive sector, which have already been severely impacted by the transition process, will be funded by the multi-billion-euro initiative from January onwards to advance the transition to environmentally sustainable engines and data processing in vehicles.

Promoting digitization and vehicle networking in development is another central problem. In this background, the German government plans to set up a fund worth billions of euros to support cash-strapped businesses in the future. Stefan Bratzel, who works at the Center of Automotive Management (CAM) in Bergisch Gladbach as a director, said to DW, “We are in a transition period in which electromobility is starting to come out of its niche.” “In the year 2021, some 15 percent of recently registered vehicles in Germany is going to be the electric ones. It’s a significant proportion.”

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