How German automakers continue to rely on electric vehicles

The switch by German car manufacturers from combustion engines to electric cars was not only praised – there were also doubts. But VW and BMW are showing that electric cars offer great opportunities.

Berlin/Frankfurt – German automakers Volkswagen and BMW are facing an electric car coup: Volkswagen reported on Wednesday a strong increase in orders for electric cars in the first quarter. BMW sold more than a quarter of battery-powered cars worldwide and broke the milestone of one million electric vehicles. “With the delivery of the one millionth fully electric vehicle since the market launch of the BMW i3, we have reached an important milestone,” said sales manager Jochen Goller. Things have been going well in Europe especially, including Germany. There is great concern in this country about the decline of electric cars because government funding will no longer be available in 2024.

Volkswagen collected more than twice as many orders for electric cars as last year. The Wolfsburg-based group now has orders for 160,000 vehicles on its books, more than it sold in the first quarter. At 136,400, the group sold three percent better electric cars than in the same period last year. But the orders gave VW confidence that it will grow both in its home region and around the world for the rest of the year, explained VW sales boss Hildegard Wortmann.

Market weakness in Germany

And this despite the weak market in Germany: After the end of the government’s environmental bonus, electric cars are slowly becoming sellers – in March new registrations decreased by 29 percent. Automotive expert Ferdinand Dudenhöffer spoke about the negative prospects. Many automakers have recently let discount campaigns lapse. In April, the discount for electric vehicles was only 12.6 percent compared to 16.9 percent for combustion engines. “The electric car market in Germany will continue to collapse in the next few months.”

However, carmakers are relying on selling more electric cars if they want to meet the EU’s CO2 targets. From 2025, fleets should emit an average of 15 percent less greenhouse gas than in 2021. For car manufacturers, according to the calculations of Patrick Hummel from the Swiss bank UBS, this means that a good fifth of sales next year will have cars of electricity. . Stifel analyst Daniel Schwarz said that Volkswagen in particular could be in trouble from 2025 because CO2 emissions are too high. “It’s good for the profit of selling more combustion engines,” he said. “But from 2025 onwards, their share must decrease significantly, otherwise there will be a big penalty.”

BMW: Pure electric vehicles as drivers of growth

In total, VW delivered 2.1 million vehicles to customers in the first quarter, 3.1 percent more than a year ago. A four percent increase in cars and trucks with combustion engines more than offset the decline in fully electric vehicles. A VW spokesman also blamed restrictions on the supply of electric motors from the Kassel plant, which caused the production break. The electric vehicle factory in Zwickau, where, among other things, the ID.3 comes off the assembly line, was particularly affected by the interruption.

BMW sold 594,671 BMW, Mini and Rolls-Royce brand cars in the first quarter, 1.1 percent more than a year ago. The drivers of growth are electric cars and models from the upper premium segment. When it comes to electric vehicles, the Munich-based company reported a 27.9 percent increase to 82,700 vehicles. In the rival Mercedes, on the other hand, the engine was caught by all types of cars. With 463,000 vehicles in the quarter, the Swabians sold almost eight percent less than a year ago. Among other things, they struggle with delivery problems for important parts. Sales manager Britta Seeger is counting on improvements throughout the year thanks to new models, including an electric version of the G-Class off-road vehicle.

China business is going well

In the regions, things got worse for BMW and Mercedes, especially in the important market of China: BMW sold fewer cars here by 3.8 percent, Mercedes by even twelve percent. The latter is due to changes in the model in the E-Class, explained the car manufacturer. VW’s luxury brand Porsche saw its sales in China drop by nearly a quarter as the sports car maker deliberately avoided the ongoing discount battle there.

However, things went well for VW in China, where sales rose by 7.6 percent. However, the Wolfsburg-based company recorded a sharp decline in sales here a year ago and had to relinquish its top spot as the leading automaker to local rival BYD. (reuters, lf)