FRANKFURT, Germany – Sales of new cars fell in Germany in November 2023, official data showed on Dec 5, dragged down by plummeting demand for electric vehicles as government incentives ran out.

A total of 245,701 new cars hit the road in Europe’s largest economy in November, a drop of 5.7 per cent from a year earlier, according to the KBA federal transport authority.

The setback was driven by a 22 per cent plunge in sales of battery-powered electric cars, to just under 45,000 vehicles in November.

Customers had raced to buy electric cars in late 2022 to take advantage of government incentives before they were phased out, and demand has declined sharply since then.

Uncertainty about whether there would be new subsidy schemes risked placing Germany’s target of putting 15 million electric vehicles on its roads by 2030 even further out of reach, said EY analyst Constantin Gall.

Without environmental bonuses or subsidies, “the price difference between a new combustion engine car and an electric one is simply too big”, he said.

Germany’s crucial auto industry has staged a modest recovery following the upheaval of pandemic-related shutdowns and supply chain woes in recent years, as companies worked through a backlog of orders.

But sales remain below pre-pandemic levels and the outlook has darkened as high inflation pushes up manufacturing costs and erodes households’ purchasing power, cooling demand.

“Incoming orders are declining,” the VDIK car importers’ federation said in a statement.

Customers are “driving their cars for longer, be it for financial reasons or because of uncertainty”, it added. AFP