Renewed fascination for electric vehicles surfaces.
In light of financial hardships, numerous individuals are opting to save their money, even when considering buying a car. This trend is particularly prominent when it comes to electric vehicles, which continue to endure expensive costs and expiring incentives. However, recent data suggests a possible resurgence.
The worldwide demand for new vehicles, including those with electric powertrains, might rise again in the foreseeable future. This optimistic outlook is based on a survey conducted by the consulting and auditing firm EY. The survey, which polled 19,000 individuals in 28 nations, including 1,000 from Germany, revealed that 40% of respondents intend to purchase a new car by mid-2026. This figure represents a 7 percentage point increase compared to the survey conducted the previous year.
Amongst those intending to acquire a new vehicle, 24% expressed a likelihood of choosing an electric model. This represents a marginal increase compared to the previous year's survey, during which only 20% favored electric cars. Vehicles with gasoline engines remain the most popular choice at 29%, while hybrid and plug-in hybrid vehicles attract 33% of potential buyers. Diesel cars capture 8% of potential interest.
In Germany, 28% of respondents revealed plans to buy a new vehicle within the next two years. This represents a 5 percentage point increase compared to the previous year. The prevalence of electric vehicles among German car shoppers is slightly higher than the global average, at 26%. Conversely, diesel cars see slightly more interest, whereas hybrid vehicles attract fewer potential buyers.
Financial constraints have resulted in many individuals holding onto their money, often postponing significant car purchases. This trend has been reflected in the sales figures of major automakers, with the global automotive market experiencing a decline. In Germany, this trend was mirrored by vehicle registrations, which, according to the industry association VDA, totaled 2.12 million in the first nine months of the year, representing a 1% decrease compared to the previous year. Registrations of electric vehicles also saw a decrease of 29% during this period.
Possible Wide-Ranging Price Reduction
EY industry expert Constantin Gall anticipates a market turnaround in the near future. "The appeal of electric vehicles is evident even in Europe, despite the current decline in new registration figures," he said. This sentiment is supported by the emergence of increasingly efficient electric vehicles with extended ranges and rapid charging capabilities.
Gall suggests that European car buyers may witness a broad-based price reduction in the coming year. Many manufacturers will need to significantly boost their electric vehicle sales to avoid penalties, which could potentially lead to improved pricing and higher discounts for customers.
High Expectations for Range in Germany
This scenario would be particularly welcomed by potential electric vehicle buyers in Germany: Compared to the global average, they are only prepared to pay a limited premium for an electric vehicle compared to an equivalent internal combustion engine model. However, their range expectations are quite high, with German electric car drivers typically anticipating a range of approximately 470 kilometers on average. Worldwide, respondents consider a range of 400 kilometers sufficient.
Lagging Recovery in the EU
In a previous survey conducted by EY, recovery in the EU's new car market was not anticipated to occur swiftly. The firm estimated that around 2 million fewer new vehicles would be sold in 2024 compared to 2019, prior to the pandemic. "The new car market remains in crisis mode. There are no positive stimuli, and demand remains at a remarkably low level. The gap to the sales figures seen before the pandemic is substantial, thereby deepening the crisis faced by the European automotive industry," said Gall.
Furthermore, electromobility, the primary growth driver of previous years, is currently experiencing a significant slowdown. The electric vehicle crisis is intensifying. Although the variety of appealing and powerful electric models is increasing, buyers are refraining from making purchases. Gall attributes this trend to expiring or diminishing subsidies, as the high cost remains a significant barrier to electric vehicle sales. A significant boost in sales is not expected in the near future, according to Gall, who added, "The economy is not rebounding, and none of the geopolitical tensions are easing, causing uncertainty among both individual and corporate customers."
Despite the ongoing financial challenges, 24% of individuals planning to purchase a new car in the next few years are considering electric models, showing a marginally increased interest compared to the previous year. If the predictions by EY industry expert Constantin Gall come true, potential electric vehicle buyers in Germany might benefit from a broad-based price reduction due to manufacturers needing to boost their electric vehicle sales to avoid penalties.
