The end of government subsidies for electric company cars is causing a significant slump in sales of EVs in Germany. Their market share in September has fallen from 32% to 14% one month earlier. Overall, the automotive market is regressing only slightly, but this year’s negative trend is a first.

The Kraftfahrt Bundesamt (KBA) results show a change of heart in the German automotive marketplace. After seven months of growth, September witnessed the first dip of the year. With 224 502 cars registered, the numbers were down 0,1% compared to the same month in 2022. Registrations are still 8% below the level of pre-corona times.

Stepping on the brakes

Though the dip seems minor, the underlying trends are significant, though cyclical. In September, the market was more or less saved by the rise in commercial vehicle registrations (+5,7%). But declining purchase power and rising material costs are casting a shadow over the private market, which lost a share of 10,3% last month.

The corporate fleet market, accounting for a rise of 51% in August, is also stepping on the brakes. The reason for the slowdown is the end of government subsidies for corporate electric cars.

Most customers bought the last month, causing the market for electric company cars to lose steam entirely in September and slide by 56,2%. That’s the biggest fall in seven years. But after the August peak, the following drop is far from unlogical.

Above EU average

A similar scenario awaits the private market. Today, customers can still benefit from a bonus, but these will be further lowered as of the beginning of next year. However, Germany already cut the scheme in the first phase at the beginning of 2023, which hasn’t severely affected the overall growing share of electric cars over the year so far. Germany’s BEV share remains slightly above the EU average.

While debate is ongoing about the EU’s investigation into market-disrupting state subsidies for electric cars from China, their share remains low. Of the 47 120 BEVs registered in Germany, only 2 045 originated from Chinese brands.

Smart is the winner

Germany’s best-selling brand, Volkswagen, has already anticipated the slump in registrations. The company has reduced its workforce in its most crucial plant for electric car production, in Zwickau, and announced that it will halt assembly in Dresden completely, the factory of the all-electric ID.3.

Breaking the numbers down to brand level brings forward Smart (+137,4%), Opel (+25,9%), and Mini (+12,5%) as winners. Among the losers are Tesla (-69,3%), Ford (-16,2%), and Porsche (-5,6%).