HomePoliticsWill Germany's 2030 goals be met by electrification?

Will Germany’s 2030 goals be met by electrification?

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In 2023, for the German auto industry, which is struggling to realize the transformation of electric vehicles, it may not be optimistic. Starting from this month, the government’s subsidies for the purchase of electric vehicles have been reduced both in terms of amount and coverage. However, the high electricity prices under the energy crisis and the weakened purchasing power under inflation will affect the electric vehicle market in the next few years. Means a gloomy outlook.

Last month, there was a last-ditch rush for electric car purchases just before subsidies were reduced as 2022 draws to a close. This month, 104,325 pure electric vehicles were newly registered in Germany, a year-on-year increase of 115.4%, accounting for 33.2% of new passenger cars, creating a historical record, while plug-in hybrids accounted for 22.2%. According to the latest data from the economic research institute DIW, the total number of pure electric passenger vehicles in Germany has exceeded 1 million.

Starting in 2023, for pure electric vehicles and fuel cell vehicles with a price of no more than 40,000 euros, the government’s environmental protection subsidy will be reduced from 6,000 euros to 4,500 euros, while the manufacturer’s discount will be reduced from 3,000 euros to 2,250 euros. The euro, and the removal of subsidies for plug-in hybrid vehicles, which will be limited to private buyers from September 2023.

An analysis by DIW shows that subsidies for electric vehicles in Germany have the effect of stimulating electric vehicle purchases. As the subsidy increases in November 2019 and June 2022, the demand for electric vehicles increases accordingly, while the demand for gasoline vehicles decreases in the same period. In January 2019, before the first major subsidy increase, electric vehicles accounted for only 2% of newly registered passenger cars. By autumn 2021, after two major subsidy increases, the proportion exceeded 20%, already comparable to the proportion of diesel engines.

Although subsidies have stimulated purchase behavior, they have not been reflected in the total number of electric vehicles in the end. According to data from the automotive industry consulting company Dataforce, 40.4% of the first pure electric vehicles and plug-in hybrid vehicles newly registered since 2018 have been canceled by the end of 2021, and among all types of passenger vehicles, this proportion Only 9.4%. Schmidt Automotive Research, an automotive industry research organization, analyzed vehicle data over a wider time span and found that from January 2012 to July 2022, there were 890,000 new registrations of pure electric passenger vehicles in Germany, and by July 1, 2022 On this day, there were only 757,000 vehicles running on German roads, of which more than 130,000 electric vehicles “evaporated”, accounting for 15% of the total new increase. This ratio is even higher in Tesla, which is quite popular, at 22%. Shrewd businessmen take advantage of policy loopholes to buy subsidized new cars. Once the minimum 6-month car holding period is exceeded, they immediately sell the cars to neighboring countries with lower subsidies or higher new car taxes and fees. German taxpayers’ money pocketed. From July 2016 to June 2022, Germany’s subsidies for electric vehicles amounted to 8.7 billion euros, of which the federal government paid two-thirds and manufacturers paid one-third. Of course, the German Federal Motor Vehicle Administration considers such an analysis to be nothing more than hypothetical, and points out that vehicles missing from the data were simply accidents or scrapped. According to the trend presented in the analysis, some of the 100,000 pure electric vehicles added in Germany last month will “disappear at some point”.

To avoid such a situation, the German government recently extended the minimum holding period for subsidized vehicles from 6 months to 12 months. It was pointed out that the time span was still insufficient. In Austria, this period is defined as 4 years.

However, what hinders the development of electric vehicles in Germany is not only misguided subsidy measures, but also shrinking purchasing power under high inflation, high electricity prices, protracted charging infrastructure construction, and even competition for battery raw materials. Compared with these, subsidies are nothing Big question.

On the one hand, in Germany, a major automobile country, the automobile industry contributes 5% of GDP and 800,000 jobs; on the other hand, within the European Union, road traffic emissions account for 26% of total emissions, while passenger car emissions account for Transportation accounts for about 58% to 61% of emissions, so the oil-to-electricity conversion of the automotive industry is naturally crucial. At the end of 2021, the three-party coalition will include a total of 15 million pure electric vehicles in 2030 in the government coalition agreement. Under the not very optimistic situation, can Germany achieve this goal?

Regarding the transformation of German vehicles to electrification, many studies have analyzed the path to achieve the goal. Some proposed to set the price of carbon dioxide at 200 euros per ton in 2030, and some proposed to advance the ban on fuel vehicles by three years, that is, in 2032. There are some differences in their path setting, but the conclusion is almost the same: the 15 million target written in the German government coalition cannot be achieved.

Based on the new subsidy plan announced by the federal government in late December 2022, the Automotive Research Center CAR concluded that even with luck, Germany can only barely complete half of the target by 2030: 7.2 million vehicles. Schmidt Automotive Research, an auto industry research organization, bluntly stated that 15 million is an unrealizable dream. By 2030, the most optimistic state is only 11 million.

The Economic Research Institute DIW proposed that in order to achieve the goal, from now on, 145,000 new vehicles must be added every month, and in 2022, the sprinted data will only be 32,000 vehicles per month, the former is almost five times that of the latter.

If Germany fails to achieve its electric vehicle goals by 2030, it will not be the first time in history. About a decade ago, then-Chancellor Angela Merkel vowed to have one million pure electric vehicles on German roads by 2020. However, such a blueprint never materialized.

Taking a step back, even if Germany can reach the preset target for the number of electric vehicles in 2030, does it necessarily mean that the climate target can be achieved? In fact, the number of electric vehicles is not the purpose, it is just a means, and it is one of the means, and the purpose is to reduce emissions and protect the environment. In terms of climate policy, the EU’s Fit for 55 plan has set goals: by 2030, carbon emissions will be reduced by 55% compared with 1990 levels, and climate neutrality will be achieved by 2050. Germany’s goals are more aggressive: by 2030, carbon emissions will be reduced by 65% ​​compared with 1990, and by 2045, climate neutrality will be achieved. According to the German climate protection law, the greenhouse gas emissions in the transportation sector must be reduced to 85 million tons of carbon dioxide equivalent in 2030, of which 52.7 million tons are emitted by passenger cars.

A study by the Wuppertal Institute shows that if Germany realizes 15 million pure electric passenger vehicles in 2030, which means that electric passenger vehicles account for 31% of the total passenger vehicles, then, from passenger vehicles China’s carbon emissions were 64 million tons, up from 52.7 million tons. In order to meet the emission standards, by 2030, at least another 5 million pure electric vehicles should be added to replace fuel vehicles, that is, 20 million.

If 15 million pure electric vehicles is a dream, 20 million is even more so.

(This article only represents the author’s own opinion, editor in charge: Yan Man man.yan@ftchinese.com)

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