International Finance
Featured Transport

‘Big question mark’ over future of electric cars

IFM_Electric Cars
Owners of electric cars have experienced price increases of 10% or more, whether they charge their vehicles at home or through agreements with charging companies

German industry leaders have warned that the future of the electric car is in trouble due to rising energy prices.

The cost of electricity, the cost and availability of raw materials, the ongoing shortage of parts, and the widespread decline in disposable money are all having a significant impact on the manufacturing and sale of electric cars.

There is also worry that if the trend persists, investors won’t be motivated to create charging stations, which will make electric cars less desirable because they would be more challenging to operate.

Up until recently, buying an electric car had become more and more appealing as gas prices soared. However, the price gap has narrowed following recent increases in electricity costs, which in Germany increased by around a third from a year earlier.

Owners of electric cars have experienced price increases of 10% or more, whether they charge their vehicles at home or through agreements with charging companies.

Given that the price of energy is linked to that of gas, which has become increasingly scarce ever since Russia cut off its gas supply to Germany about a few weeks ago, further price increases are expected.

One of Germany’s biggest operators of charging stations, Allego, increased its rates at the beginning of this month from 43 cents to 47 cents per kilowatt hour.

While the fastest, so-called ultra-fast charging, has increased from 68 cents to 75 cents per kilowatt hour, express charging by continuous current has gone up from 65 to 70 cents.

Discount grocery stores, home improvement chains, and furniture retailers that previously provided clients with free charging while they shopped are now enforcing charges.

Automobile economist Stefan Bratzel believes that development poses a direct threat to the sector.

During an interaction with German media, Stefan Bratzel said, “The electricity price explosion could end up being an acute danger for vehicle transition, and we need to be damn careful about it.”

Stefan Bratzel, who is also founder of the Center for Automotive Management (CAM), said, “If electric cars become more expensive to use, the surge in electric mobility is in danger of collapsing, because hardly anyone is going to buy an electric car.”

Stefan Bratzel and other supporters of electric vehicles are now urging the German government to make sure that the price of energy stays below the price of gasoline, which they claim is essential for the viability of electric cars.

In a recent column for the financial newspaper Handelsblatt, Helena Wisbert, director of the Duisburg-based Center for Automotive Research, stated that “electric cars are losing their charm.”

From 2023, state subsidies for electric cars will be cut in half to €4,500, while plug-in hybrid vehicle buyers, who presently receive a €6,750 payment toward their vehicles, would no longer be supported.

A total of €2.5 billion will be made available, which will only be enough to pay bonuses for 400,000 electric cars, which is less than 1% of the cars on German roads.

What's New

M-Money: The payment gateway for financial inclusion


The ‘Tijara’ route of empowering Bahraini SMEs


Business Leader of the Week: Meet Jim Ratcliffe, British billionaire & part-owner of Manchester United

IFM Correspondent

Leave a Comment

* By using this form you agree with the storage and handling of your data by this website.