Germany's shift to electric cars slows down in 2023 as subsidies axed

Germany's transition to battery-electric cars slowed in 2023, data on new registrations by the Federal Motor Transport Authority (KBA) show. With a share of about one fifth of all new cars, 524,219 new fully electric cars were registered last year - an increase of 11.4 percent over 2022. However, in 2022, battery electric car registrations had grown by about one third. A key reason for the changing dynamic is the phase-out of state support, writes specialist publication electrive. First, the buyers’ premium was reduced at the start of 2023, which led to a temporary collapse of new registrations. Then, support for electric company cars was phased out by September and, following a budget crisis at the end of the year, the government decided to end all EV support almost overnight. Several automakers introduced rebates for electric vehicles to compensate for the subsidy cut.

The aim by the government and leading automakers to get at least 15 million electric vehicles - including plug-in hybrids - on German roads by 2030 looks increasingly difficult to achieve in view of the sales data. Among other factors, expert point to the fact that the average price of newly registered electric cars, excluding optional extras and subsidies, rose by more than 4,000 euros to 52,700 euros in Germany in 2023, slowing the transition to climate-friendly mobility. German and European carmakers are facing mounting pressure as Chinese firms increasingly spearhead the global shift to electric vehicles, and begin to conquer the European market with comparatively cheap models that European carmakers have failed to offer. German car magazine Auto Motor und Sport reported that customers might have to wait until mid-2026 for Volkswagen to start full-scale production of its ID.2, the company’s first electric model priced at less than 25,000 euros.