The German Association of the Automotive Industry (VDA) expects a sharp rise in electric car sales of 17 percent and slight growth in the overall market of two percent to 2.9 million new cars. According to a report in the "Rheinische Post" (Monday edition), the VDA stated that this would depend on the rapid implementation of the new purchase subsidy. In this case, the association expects an increase of 17 percent to just under one million new electric cars. If politicians take their time, consumers may hesitate until the subsidy of up to €5,000 per new car is paid out.
The automotive trade is more optimistic. The German Motor Trade Association (ZDK) expects a "significant market boost" from 1.1 million new pure electric cars and plug-in hybrids. The overall market is expected to grow by 3.5 to 4 percent to around 2.95 million vehicles. "Political momentum, a wider range of models, and the growing suitability of electric drives for everyday use are finally coming together," explained ZDK President Thomas Peckruhn.
WELL BELOW PRE-CRISIS LEVELS
However, the industry will not return to its former strength in the coming year. The forecast volume is still around one-fifth below the pre-coronavirus year of 2019, the VDA explained. The main reason for this is the continuing economic weakness. The association also expects only slight growth on international markets: growth of two percent is expected for Europe and one percent for China. In the US, on the other hand, the VDA expects a decline of four percent due to the cost surge caused by increased US import tariffs. "More protectionism and the associated cost increases will not be without consequences in 2026," VDA chief Hildegard Müller told the newspaper. Domestic car production is expected to decline slightly by one percent, while the production of electric cars is expected to increase by five percent to 1.76 million units.
The industry has been in crisis for years. US tariffs, problems in the Chinese market, the costs of climate-neutral transformation, high energy and location costs, and buyer reluctance in Europe are all weighing on the industry. In Berlin and Brussels, industry representatives are therefore campaigning for a softening of the previously strict rules for phasing out combustion engines in the EU from 2035. VDA President Müller called on politicians in Brussels to come to "clear decisions in a timely manner" on the planned phase-out of combustion engines. According to insiders, the EU Commission will present proposals on this on December 16. The auto industry and the German government are calling for combustion engines to be allowed to remain on the road longer due to the slow ramp-up of electric cars so far.
(Written by Alexandra Falk and Ilona Wissenbach, edited by Ralf Banser. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
