European electric cars are facing difficult times. They were kept afloat by government subsidies, but they are ending and car companies have to fend for themselves.
Germany has set itself the goal of getting 15 million electric cars on the road by 2030. So the car companies succumbed to the European Union and, motivated by the initial wave of subsidies and benefits, went all out in electromobility and a little bit of plug-in hybrids. But Europe is not yet ready for the global adoption of battery cars. That is, the conditions for the transition are too great among the member countries. Let’s remember that the Czech Republic is the third worst in Europe with battery cars. Only Slovakia and Croatia are behind us.
In short, the pace of sales is not as optimistic as expected and German brands are starting to pay for it. For example, Volkswagen extended the shutdown of the ID.4 by a week due to insufficient demand this summer and stopped production again for three weeks in November. Likewise the ID.5, but this time due to the stalled supply of electric motors and prioritizing the production of the ID.7. For the whole of December, Volkswagen put the production of the ID.3 and Cupra Born on hold. And this year, for the first time, the price of ID.3 was reduced to one million crowns.
The success of electric cars in Germany depended on the subsidy program, when the government together with the car manufacturer provided the buyer with a subsidy of 6,750 euros (approx. 165,000 CZK). Of course, depending on the brand and price of the car. But it ended on Monday as part of government cuts for next year. It’s a disaster for car companies, because they actually only have three electric cars on the German market with a price below 30,000 euros (approx. 740,000 CZK). They have no choice but to take the subsidy in full from their own pockets.
Volkswagen will pay the full subsidy to private individuals who ordered a car by December 15, and will give 4,500 euros (approx. CZK 165,000) to owners of cars registered from January 1 to March 31. Audi will support the full amount for cars ordered before December 16, and Mercedes will also support cars registered before December 31. After that, they will probably prepare their own subsidy program with a lower amount.
Other car companies are also joining. For example, Stellantis will pay the full subsidy for electric cars until December 31 and will continue with a reduced amount until February 29. Kia will support private customers until March 31.
What will come next is in the stars, but this is not the path to cheaper electric cars. Their sales are expected to drop significantly next year. And that’s a big problem for competing with Tesla, whose Model 3 is the best-selling electric car in Europe, and a flood of Chinese brands. The affordable battery cars can and is slowly building a production base in Europe.