Rapid Expansion of Electric Vehicle Sales by German Manufacturers Remains Notable - Robust Sales of German-Made Electric Vehicles
In a significant shift in the German automotive landscape, Volkswagen has emerged as the leading player in electric car (E-car) sales, surpassing competitors such as Tesla and BMW. This upswing can be attributed to several strategic factors, including aggressive price cuts, strong corporate fleet sales, competitive leasing and financing offers, and a compelling product portfolio.
Volkswagen's approach to pricing has been instrumental in making its EV models more accessible. The company has substantially lowered prices across many of its EV models in Europe, with the ID.3 hatchback now starting at around €33,300 after discounts, down from earlier higher price points [1]. Furthermore, Volkswagen plans to offer very affordable new EVs, such as the upcoming ID Everyone, with a starting price around €20,000, expanding its market reach even further [1].
The EU's mandate requiring automakers to cut fleet-wide CO2 emissions by 15% from 2021 levels has spurred German manufacturers, including Volkswagen, to increase EV sales aggressively. This regulation, coupled with offers tailored to corporate fleets, has helped Volkswagen avoid hefty EU fines [2]. Corporate buyers, who form a large share (approximately two-thirds) of car sales in Germany, have been a significant driver of this strategy's impact in the German market [2].
Beyond price cuts, Volkswagen and other German automakers have introduced attractive leasing deals and competitive financing terms, making EV adoption easier for both private and corporate customers [2]. The company's EV lineup, particularly models like the ID.4 and the new ID.7 (an electric Passat), have shown strong sales growth. These vehicles offer adequate range, size, and interior space, appealing to the business segment that values brand familiarity, residual value stability, and local origin [3].
While BMW and other premium brands also offer EVs, Volkswagen's wide range of competitively priced models combined with aggressive fleet-targeted sales strategies and regulatory incentives have positioned it strongly in Germany. The emphasis on corporate fleet electrification in Germany particularly favours Volkswagen, given its local brand strength, broad model availability, and focused incentives [1][2][3].
Despite Volkswagen's success, the overall registration of electric cars in Germany is expected to be below the level of 2023 in its entirety by 2025. The current increase in registration is primarily driven by company sales, not private customers, due in part to the end of electric car subsidies at the end of 2023 [4]. EY expert Constantin Gall stated that the current registration increase is not a boom in the electric car market [5].
In the first half of the year, Volkswagen increased its market share of electric cars in Germany from 31.7 to 46.4 percent, with almost every second electric car registered in Germany being from a Volkswagen brand [6]. The six best-selling electric car models in this period were from a Volkswagen brand, and BMW's brand displaced Tesla from second place in electric car sales [6]. Skoda, a Volkswagen brand, experienced a significant 132 percent increase in electric car sales [7].
Despite Volkswagen's dominance, BMW's market share of electric cars in Germany increased from 11.1 to 11.3 percent [8]. As the electric car market continues to grow, it remains to be seen how the competition between these automakers will evolve.
[1] https://www.autoexpress.co.uk/electric-cars/news/193110/volkswagen-id-3-price-cut-germany [2] https://www.autocar.co.uk/business/industry/volkswagen-id-3-price-cut-germany-boosts-ev-sales [3] https://www.autocar.co.uk/business/industry/volkswagen-id-7-sales-boom-europe [4] https://www.autocar.co.uk/business/industry/germany-electric-car-registrations-fall-below-2023-levels-by-2025 [5] https://www.autocar.co.uk/business/industry/germany-electric-car-registrations-fall-below-2023-levels-by-2025 [6] https://www.autocar.co.uk/business/industry/volkswagen-dominates-germany-electric-car-market-first-half-2024 [7] https://www.autocar.co.uk/business/industry/skoda-electric-car-sales-soar-132-percent-first-half-2024 [8] https://www.autocar.co.uk/business/industry/bmw-electric-car-sales-rise-germany-first-half-2024
- In the German automotive industry, the dominance of Volkswagen in electric vehicle (EV) sales is partly due to their implementation of the competition policy, as they've aggressively reduced prices and offered competitive leasing and financing options for their EV models.
- The EU's technology-driven competition policy, requiring automakers to cut fleet-wide CO2 emissions, has spurred the growth of Volkswagen's EV sales within the corporate sector, contributing to the company's market success in Germany.
