Germany’s electric-vehicle market plunged last month, leading a broader decline in Europe that’s left carmakers calling on Brussels to reconsider key
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Germany’s electric-vehicle market plunged last month, leading a broader decline in Europe that’s left carmakers calling on Brussels to reconsider key climate targets.
Germany’s electric-vehicle market plunged last month, leading a broader decline in Europe that’s left carmakers calling on Brussels to reconsider key climate targets.
EV deliveries in the region’s biggest car market fell 69 per cent during August, fueling a 36 per cent drop across the region, the European Automobile Manufacturers’ Association said Thursday. The group urged the European Commission to take urgent relief measures ahead of 2025 fleet-emissions targets that could result in billions of euros in fines for carmakers that fail to meet them.
Europe’s auto industry has struggled with a drop in demand for EVs after governments pulled back financial incentives that had made the relatively expensive cars more affordable. With the battery-car market share shrinking to 14 per cent in August — down from just over 15 per cent last year — auto manufacturers are rethinking their strategies and timelines for shifting away from combustion engines.
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The decline has been most pronounced in Germany, which is facing a spate of setbacks in its industrial core. Volkswagen AG, the continent’s biggest automaker, has scrapped a decades-old labor pact and is poised to close domestic factories in Germany for the first time due to lagging demand.
BMW AG cut its full-year earnings guidance, partly citing sluggish EV sales. Elsewhere, chipmaker Intel Corp. has pushed back building a planned factory for which the country’s government had earmarked €10 billion ($11.1 billion) in subsidies.
The German economy may already be in recession, the Bundesbank said Thursday in a report. After shrinking slightly in the second quarter, output could stagnate or decline again in the third, according to the central bank.
“Germany’s economy isn’t gaining momentum and consumers as well as investors are holding back,” EY’s mobility lead for Western Europe, Constantin Gall, said in a note. “Geopolitical tensions and violent conflicts are weighing on sentiment.”
Across Europe, new-car registrations dropped 16.5 per cent compared to a year ago to 755,717 million units last month with declines also in France and Italy. The UK was the only major market where EV sales rose, gaining 10.8 per cent.
The downturn in EVs is putting carmakers like VW and Renault SA at risk of hefty fines as tighter European Union fleet-emissions rules are set to kick in next year. In its statement, the ACEA urged the European Commission to bring forward planned regulation reviews, but stopped short of requesting a two-year delay of the new fleet-emission standard of about 95 grams of CO2 per kilometer per vehicle, an option under consideration according to a draft proposal obtained by Bloomberg News last week.
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BMW on Thursday said it’s been preparing for the new CO2 fleet targets for years and is confident it can meet the stricter thresholds next year. The company “therefore sees no need to adjust or postpone these 2025 goals.”
The developments are also putting pressure on the EU’s deadline to effectively ban sales of new combustion-engine cars from 2035, with European automakers divided over the way forward in the face of looming new rules.
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First Published Date: 20 Sep 2024, 08:00 AM IST