Germany sees slow uptake in EVs as charging infrastructure remains financially unviable

03 January 2018

Germany sees slow uptake in EVs as charging infrastructure remains financially unviable

3 January 2018

The German state premium for the purchase of electric vehicles (EVs) is continuing to attract relatively little interest despite increased demand for the technology.

In the one-and-a-half years since the premium was introduced, only 10% of total funding applications have been received, with a total of 46,897 submitted. Around €600 million has been put aside by the German government. However, only €65 million has been committed.

The government promotes the purchase of an EV with a €2,000 grant, while those looking to buy a hybrid vehicle receive €1,500 towards the cost. This is initially taken off the cost of the car by the manufacturer and then reimbursed back to them. The amount set aside is expected to cover more than 300,000 vehicle purchases, according to the Die Welt newspaper.

A spokesperson at the country’s Federal Office of Economics and Export Control (Bafa) comments: ‘There are some indications that the funds will not be exhausted by the end of the promotion in mid-2019.’ The Bafa president, therefore, suggested using the money elsewhere to promote electromobility. The new federal government could redirect part of the budget and provide it to promote private charging infrastructure, which could be used, for example, by craftsmen, hotels, or housing estates.’

Of the nearly 47,000 purchase award applications, 24,500 went to businesses and 21,600 to residential customers, according to Bafa figures. Government agencies, on the other hand, held back: Only 346 municipal enterprises and special purpose associations use the premium.

There have been calls to divert other subsidies to EV uptake. Volkswagen boss Matthias Muller suggested that the German premiums for diesel technology would be better spent on directing people to electric vehicles. ‘If the transition to environmentally friendly electric cars is to succeed, the diesel internal combustion engine cannot be subsidised like before,’ he told the newspaper, referring to the lower taxes drivers pay for diesel fuel compared with petrol. ‘The money could be more meaningfully invested in the promotion of environmentally friendly drive technologies.’

One of the reasons for the sluggish demand for EVs is still the small network of charging stations. However, while there are issues with the infrastructure in the country, with energy providers believing that the operation of ‘electric petrol stations’ is not viable at present. Participants believe that for such a venture to be economically beneficial, there needs to be around one million EVs on German roads. However, to date, only 34,000 are registered in the country.

According to a survey by the Federal Association of the Energy and Water Industry (BDEW), there are currently 11,000 publicly accessible charging points in Germany. ’We distinguish between charging points and charging stations,’ says Jonas Lohmann, head of the Mobility Competence Centre at energy provider EWE. ‘A pillar has two charging points, which can be used to charge two electric cars. EWE started in 2014 with 30 charging stations and currently operates 220 columns. 400 are planned for this year.’

The structure of the infrastructure depends largely on the development rate of the car industry. The EU Commission does not want to impose quotas but plans an incentive system. Car manufacturers should have more than 15% of their new cars sold by 2025 as low-emission cars, rising to 30% by 2030. In 2016, the share was around 1% Europe-wide. Most recently, however, the number of registrations grew significantly to 6.2% in the third quarter of 2017.