German Electric Cars Are Losing Out to China

beijingwalker · Sep 3, 2023

German Electric Cars Are Losing Out to China

Experts confirm that China’s supply-chain control of electric car batteries and low-priced vehicle sales have weakened Germany’s electric auto industry.

Electric cars are still too expensive in Germany, and German car makers remain dependent on China for electric car batteries.

These are the conclusions of a study by Deloitte published on August 31st.

Electric cars, or EVs, are still about €11,000 more expensive than combustion engine cars, and the price difference is not predicted to level out until around 2030.
“The main problem: the electric cars are too expensive,” the industry experts summed up.

A new combustion engine car currently costs an average of €31,000, while a battery-powered car costs €42,500.

“In order for the e-car to reach the masses, this cost difference has to fall,” Deloitte’s industry expert Harald Proff explained. “At the moment, there are too few offerings here on the German market.”
The study noted that high costs for electric vehicles have set the German government back on its goal of having 15 million electric vehicles on the road by 2030. Most likely, there will only be 12 million.
Not only is electric car uptake behind, but the German auto industry is also losing out to the Chinese.

China controls the supply chain for electric car batteries and currently manufactures them at half the cost compared to Germany, according to industry experts.

At the same time, the Telegraph reports that China has managed to surpass Germany and Japan to become the world’s biggest exporter of cars. The communist country shipped 1.1 million cars abroad in the first quarter of 2023 alone.

The combined result is that sales of Chinese electric cars are making a dent in the German domestic market at the same time that Germany is selling fewer cars in China.

Earlier in August, Monika Schnitzer, chair of Germany’s Council of Economic Experts, said car makers needed to “get their act together” as Germans were increasingly turning to cheaper Chinese-made cars while weak demand from China was also hurting the country’s exports.

“Germany was always a very export-driven economy, and right now exports are not working that well. This is to some extent due to the fact that China is not demanding as much as it used to,” she said.
She added: “On the other hand, parts of German industry are not doing particularly well. If you think of the car industry, for instance, they are not really benefiting from the increase in demand for electric vehicles.”

“Manufacturers will have to do their homework,” she concluded.

Specifically, they need to scale up production in order to lower costs, and increase the extra luxury features in their cars.

Deloitte’s Proff, however, saw hope for Germany in leading innovation in car battery technology.

“Even if new manufacturers are currently ahead in battery technology and can therefore better serve the volume segment, the race is not yet decided,” he said. Germany’s longstanding carmakers still have the chance to “become pioneers in a new technology,” he said.