First the end of funding, then the withdrawal of the end of combustion engines? There is a hail of negative news from the industry. Politics, industry and customers are losing interest in e-mobility. Is she running out of juice? “We will be set back years,” says car expert Ferdinand Dudenhöffer.
Electric mobility was already doing better. The bare numbers show it: According to the Federal Motor Transport Authority (KBA), the proportion of newly registered electric cars with pure battery drive (BEV) in Germany fell by 15 percent this February from an already low level compared to the same month last year. On the other hand, combustion engines and diesel vehicles were able to increase. Diesel-powered vehicles even increase by almost ten percent.
The market share of electric cars is also shrinking. In February it was 12.6 percent – a year earlier it was 13.5 percent. Politics, business, but also consumers are getting cold feet. They are gradually creeping out of the electrical project against climate change. And Germany is not an isolated case. Six facts that show what the situation is with e-mobility:
1. Apple capitulates – visions of the future that do not come true
Yes, Apple is not a car company, but a tech company. But the fact that the figurehead of the tech scene is pulling the plug on its electric car project, into which billions of euros have been invested, has symbolic significance. It reflects the mood in the e-car industry. The hype about future technology is over. There had been repeated speculation about the i-Car for years. After several postponements, the market launch was planned for 2028. The comment from Ferdinand Dudenhöffer from the Bochum Center Automotive Research (CAR) was devastating: “Apple has capitulated,” he told ntv.de. Apple’s goal was a fully connected electric car. The successors of company co-founder Steve Jobs tried it and failed. The digital euphoria has fizzled out.
At this point, traditional car manufacturers have long since backtracked on their own electric car goals. In February, Volvo Cars sold its shares in the electric car maker Polestar. The British car manufacturer Aston Martin, known for the James Bond brand, announced that it would not bring its first electric sports car to car dealerships in 2026 instead of 2025. Mercedes-Benz also scaled back its electric expansion goals. The Stuttgart car manufacturer wants to say goodbye to the combustion engine later. Mercedes boss Ola Källenius put it this way: “It is impossible to predict exactly whether we will sell our last combustion engine in 2030, 2033 or 2035, because that is what our customers decide.” Even if the future belongs to the electric car, they want to serve the combustion engine fans first. Because that brings money. This is also how the Stellantis subsidiary Jeep decided.
2. US President Biden abandons e-car goals
Politics is also losing interest. US President Joe Biden apparently wants to extend the timetable for the transformation to e-mobility in the USA. The plan was to increase sales of purely electric cars in the USA from just under 8 percent to 60 percent by 2030. This is an ambitious goal for a country whose streets are dominated by heavy pickup trucks and SUVs. The second largest CO2 emitter after China is lagging fatally behind when it comes to e-mobility. While almost 30 percent of the vehicles sold in China in January were electric cars or plug-in hybrids, the figure was four percent at the US car manufacturer Ford and just three percent at GM. The major US manufacturers GM, Ford and Stellantis (Chrysler, Dodge, Jeep) had warned that they would not be able to convert their fleets quickly and profitably.
The US government has made “the turn towards realism,” says Dudenhöffer. During the election campaign before the presidential election in November, Washington realized that there was no point in “setting goals that one can assume will not be achieved.” And it could get even worse: with a possible next US President Donald Trump, electric cars could be scaled back beyond recognition.
3. EU Commission President von der Leyen wants to consider phasing out combustion engines in 2026
The EU, which has decided that no more cars with combustion engines will be registered from 2035, also seems to have arrived at this new reality. Commission President Ursula von der Leyen recently reminded that the combustion engine ban will be reviewed in 2026. An examination was planned anyway, so why this explicit reference? Car expert Dudenhöffer sees it as a sign: “This is the EU Commission’s role backwards.” The resistance from the Europeans is too great. The subsidies for electric cars are no longer flowing, which is why car manufacturers are running out of breath.
This week the EU Parliament created new facts: electric cars are no longer automatically climate neutral. Companies must take real values into account for the CO2 content of the electricity they use. According to the new reference data, only gray hydrogen has a worse carbon footprint than electricity. “With this law, the ban on combustion engines can now be overturned in 2026 without any problems,” comments Dudenhöffer.
4. Funding in slices expresses the electric car quota
Collecting the e-car funding was just the beginning. From January 1, 2023, only battery and fuel cell powered vehicles were funded, but no more hybrid vehicles. From September 1st, only private individuals could apply for the environmental bonus. And on January 1, 2024, the environmental bonus was completely buried for everyone. The consequences are foreseeable: For this year, the VDA is predicting a decline of 14 percent for electric vehicles – that would be the very first decline since the KBA began recording new electric car registrations.
5. Price war: E-cars in the downward spiral
The high prices for electric cars, the high interest rates that make purchasing difficult, plus the high investment costs for the industry – the transformation from combustion engines to electric cars is a complete obstacle course. But there are also home-made problems. About a year ago, Tesla sparked a price war in China that affected much of the competition. The half-capacity VW factory in Zwickau shows how the market is tipping, says Dudenhöffer. Discounts to stimulate demand became a “dangerous vicious circle,” a rapidly spiraling downward price spiral. Leasing companies are staying away from electric cars because the residual value of used cars has fallen dramatically. Rental companies such as Hertz and Sixt have removed the loss-making Tesla Rental from their offerings. Because it is not possible to make any profits with electric cars in the first place, the industry is switching back to combustion engine technology. A short-sighted decision in view of climate change. “The technology will probably only last four or five years,” predicts Dudenhöffer.
6. Hybrid models benefit
The buyers prove to be flexible. The trend is towards hybrid vehicles. The Japanese car manufacturer Toyota is a clear beneficiary. The world’s largest car manufacturer relies on models in which an integrated or externally rechargeable battery is supplemented by a combustion engine. Just a few days ago, he announced investments of a good $2 billion in his Brazilian operations between 2023 and 2030. Toyota is still hesitant about a purely electric car for the masses. The advantage of hybrid cars is that they are more affordable than purely battery-powered cars. They also guarantee range.
The popularity of plug-in hybrids is also growing in the electric paradise of China, which wants to flood the global market with its electric models. BYD, the world’s largest electric car manufacturer, sold three million vehicles in 2023, almost half of which were hybrid vehicles. According to the state institute China Automotive Technology and Research Center (CATARC), twice as many pure electric cars are still sold as plug-in hybrids in the electric stronghold of China. But sales of technology hybrids rose by 83 percent in 2023, while those of purely battery-powered electric vehicles only increased by 21 percent. Other Chinese companies such as Chery are also relying on a drive mix of electric and non-electric concepts. The French car manufacturer Renault is developing new petrol and hybrid drives together with the Chinese car giant Geely.
Industry expert Dudenhöffer remains optimistic about China: “China will continue to push its electromobility because that is one of the country’s great technological advantages. Beijing has a lot of stamina. The Communist Party will not overturn a plan if something changes in the short term.” The West, on the other hand, will fall back five years on its current course.