Traffic: Electric cars are booming shortly before the subsidy premiums are reduced

Driven by a strong increase in electric vehicles, the number of newly registered cars in Germany in 2022 rose just above the previous year’s level. A good 2.65 million cars were new on the road last year – an increase of 1.1 percent compared to 2021, as the Federal Motor Transport Authority announced on Wednesday.

While the car industry was confronted with eleven percent fewer new registrations in the first half of the year, the number of registrations has recently gone up significantly. In December, the increase was 38.1 percent. However, sales of electric vehicles in particular could soon drop again.

Because the increase in recent months is likely to be a result of the premium adjustments: At the turn of the year, the subsidy for plug-in hybrids expired, for purely electric vehicles it was reduced. Shortly before the adjustment, more than twice as many electric vehicles (fully electric cars and plug-in hybrids) were newly registered in December than a year earlier – for the first time there were also more electric vehicles than combustion engines.

Around 833,000 new electric vehicles came onto the roads in 2022 (plus 22 percent) – around 174,000 of them in December alone. 470,500 vehicles were purely electric cars (up 32.2 percent). Here, too, December was notable with around 104,300 new registrations in this category.

Funding off for hybrids

Plug-in hybrids, which use a combustion engine in addition to an electric motor, have not been subsidized since the beginning of the year. The subsidy premiums for battery and fuel cell cars have fallen. Buyers of fully electric cars can now receive a maximum of 4,500 euros from the state instead of 6,000 euros if their car is on the sales list for less than 40,000 euros net. For more expensive vehicles up to a net list price of 65,000 euros, there are still 3,000 euros instead of the previous 5,000 euros. In 2024, the subsidy premiums will continue to fall.

In December 2022, many car buyers are likely to have tried to get the higher premiums. The consulting firm EY therefore sees an “artificial electrical boom” in the December figures. For 2023, associations and experts expect that plug-in hybrids will sell much worse. For pure electric cars, the forecasts are different. “The hangover mood in the coming months is pre-programmed,” wrote EY on Wednesday. From the point of view of the German Association of the Automotive Industry (VDA), the development suggests “early purchases”.

Minister of Transport: “Huge success”

Federal Transport Minister Volker Wissing (FDP) described the increase in fully electric cars as a “huge success on our way to climate-friendly mobility”. Last year, the number of publicly accessible charging points grew by almost half to a good 70,000. “A comprehensive, user-friendly and needs-based charging infrastructure is a prerequisite for the breakthrough of electromobility. Energy policy must now follow suit,” said Wissing according to the announcement. “The power grid must become more efficient and, in addition to the expansion of renewable energies, we will also need nuclear energy for longer so that e-cars do not run on dirty coal power.”

The general upward trend in the number of registrations began in September, when the number of new registrations rose by 14 percent compared to the same month last year, in October by almost 17 percent and in November by a good 31 percent. In contrast, the mood in the first half of the year was depressed. “Compared to the pre-crisis year of 2019, there will be a significant sales gap of around 26 percent in 2022,” summarized the VDA. Nevertheless, manufacturers have reported billions in profits over the past few months.

Greenpeace: Registration numbers reflect climate problem

With the final spurt, “the 2022 car year ended on a positive note, even if the market as a whole fell well short of expectations,” said Reinhard Zirpel, President of the Association of International Motor Vehicle Manufacturers (VDIK). “The ability to deliver is still a challenge, but has improved significantly. The manufacturers can gradually work off the currently high order backlog.”

According to Greenpeace, the number of registrations reflects the climate problem of traffic. “As long as more heavy SUVs are sold year after year and the number of registered cars keeps growing to new record numbers, we are racing deeper into the climate crisis,” said Greenpeace traffic expert Marissa Reiserer. Almost 30 percent of the cars registered in 2022 were city SUVs. They therefore account for the largest share of new registrations. Manufacturers are hoping for better margins from the sale of larger cars.