Electro – not much works without incentives to buy
The big goal firmly in sight
Nio ET5
© press-inform – the press office
New government – the same ambitious goals. By 2030, the new federal government wants to put 15 million electric cars on German roads. The plan is more than ambitious and without lavish purchase incentives little is likely to happen.
The new federal government made up of SPD, Greens and FDP has not even been in office for a month, when the pressure is already mounting. Because in addition to the ongoing pandemic as a thematic long-runner, environmental protection and thus electromobility are still at the top of the list. The plan of the traffic light coalition: 15 million electric cars should be driving on German roads by the end of the decade. Such a goal was already ambitious in 2010, when the government at the time announced the target of one million electric cars by 2020. The plan became a non-starter and the target was clearly missed. With its focus on more environmental policy, the new traffic light coalition is now extending the purchase premiums for electric cars by a further year until the end of 2022. The hope is that vehicles with plugs will continue to gain favor with end customers and thus boost registrations.
It is already clear that without lavish purchase incentives, little will be seen and little will change in this situation in the near future. The ongoing pandemic and the chip crisis with a shortage in the car market are doing little to change that. Jato Dynamics analysts took a look at incentives and the impact on approvals in the first ten months of 2021 and made an interesting comparison to Italy and France to see if incentivization really works.
Anyone who currently buys a fully electric vehicle in Germany receives a subsidy, half of which is paid by the manufacturer and half by the state. Since the beginning of the corona pandemic, the government has even doubled the state share through an innovation premium. Buyers of an electric car with a net list price of up to 40,000 euros will be reimbursed up to 9,000 euros. What is striking about the German incentive development: Although the premium can only be applied for after purchase and approval from the responsible BAFA office, the amount of the incentive has remained constant; as well as the admission numbers. The subsidy bonus is always around 30 percent in the period under review, regardless of the number of registrations. According to the analyzes by Jato, however, one special effect is noticeable in all markets: at the end of each quarter there are sometimes more, sometimes less strong swings. For example, Tesla is currently selling three quarters of its vehicles in the last month of the quarter compared to the two previous months, especially the Model 3. With this sales strategy, Tesla stands out from the other manufacturers and is responsible for the strong peak in registrations.
In France and Italy there is a clear connection between demand and subsidies. This year, car buyers received an environmental bonus of 7,000 euros with a purchase price of up to 45,000 euros. In July 2021, the bonus was then reduced by 1,000 euros. The result: together with the lower subsidy, the sales figures for electric cars also collapsed. In one fell swoop, sales fell from 12,000 vehicles in June to around 4,000 in July. The market only recovered in September with more than 10,000 e-cars sold.
In Italy, e-car buyers receive an amount of up to 6,000 euros (possibly another 2,000 euros) when buying an electric car with a net price of less than 50,000 euros. Analysts in Italy observed comparable slumps at the end of the third quarter. With the absence of subsidies, registrations also plummeted here. The Italian incentive system is fed from a large pot that is available for this. This pot is currently empty, there are no more funds available. However, the curve for 2021 also suggests less interest in e-cars in Italy. According to the Jato analysts, electromobility in the southern European country lacks persuasive power. It therefore remains interesting to see when and to what extent the willingness to buy picks up again. It will also be exciting to see how the enthusiasm of Germans for electric vehicles develops as soon as the subsidy expires at the end of next year. The will to continue to switch to emission-free mobility will largely determine whether the new federal government can achieve its goal of 15 million e-cars this time.