Germany Automotive High Performance Electric Vehicles Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Germany Automotive High Performance Electric Vehicles Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The German automotive high-performance electric vehicles market is anticipated to register a CAGR of about 32% during the forecast period.

The COVID-19 pandemic significantly slowed the supply chain, causing a drop in corporate confidence and increased consumer concern. The government imposed total lockdowns and temporary industry closures in several areas of Germany, harming the country's entire production and sale of cars. However, as a result of the economic impact of the COVID-19 pandemic, the government approved a financial recovery plan with a EUR 130 billion (USD 138.5 billion) budget in June 2020, including EUR 8 billion (USD 8.5 billion), to promote electric vehicle adoption and charging infrastructure deployment.

Over the long term, the growing awareness about vehicle emissions, lower operating and maintenance costs, and an increase in Government and environmental agencies' initiatives to encourage the use of electric vehicles is expected to drive the growth of the high-performance electric vehicles market in the region. Moreover, major players are focusing on developing high-performance electric vehicles in the country. For instance,

Key Highlights

• August 2022: ZF Friedrichshafen AG (ZF) announced that its Commercial Vehicle Solutions (CVS) division had presented the most recent eMobility technologies in advance of the IAA Transportation 2022. The purely electric drive system combines cutting-edge control systems to redefine the dynamic, agile, and precise combination that distinguishes BMW M automobiles as high-performance sports cars.

Moreover, with the increasing number of electric vehicle sales in the country, there is an increase in the charging stations in the countries, which will also play an essential role in boosting the sale of High-Performance electric vehicles. There were about 59,400 publicly available charging stations for electric cars in Germany in 2021. Furthermore, technological advancement and new development in the high-performance electric vehicle market may also contribute to the growth of the market in Germany

Key Market TrendsIncreasing Popularity of Electric Vehicles in Germany will Drive the Market

According to the Federal Motor Transport Authority, a quarter more electric cars were registered in Germany in the first half of 2022 than in the same period the previous year. It increased the proportion of fully electric vehicles to 13.5% of all new registrations during that period. Overall, registrations of alternative-drive cars (battery electric vehicles, hybrids, plug-in hybrids, hydrogen fuel cell vehicles, and gas vehicles) increased by 14.2%, accounting for nearly half of all new car registrations. During the reporting period, German brands accounted for 50.6% of new passenger car registrations with electric drive.

Germany plans to have 15 million electric vehicles on the road by 2030. Moreover, The German Federal Government is also actively encouraging plug-in electric car use. Moreover, following the increase in BEV subsidies from June 2020, the market share of BEVs continuously increased. Aside from the environmental benefits, the growth is fueled by the increasing availability of electric vehicles on the market.

However, the country's increasing popularity of electric vehicles can be seen. Therefore the government of Germany is also expected to reduce financial incentives for purchasing electric cars next year, as the growing popularity renders government subsidies obsolete. E-vehicles are becoming increasingly popular and will no longer require government subsidies shortly. Subsidies for purely electric vehicles priced under EUR 40,000 (USD 40,488) will be reduced to EUR 4,500 (USD 4794.82) from EUR 6,000 (USD 6393.09) at the start of next year and to EUR 3,000 ( USD 3196.55) by 2023, according to the plan. According to government sources, the incentives paid to electric car buyers will expire once EUR 3.4 billion (USD 3.44 billion) from the next two years' budget is spent.

The increasing trend of EVs is also expected to benefit the high-performance EVs in the market as customers with HNWI may show interest in purchasing them.

Furthermore, Germany decided on an interim target of reducing greenhouse gas emissions from the transportation sector by 48.1% from 1990 levels by 2030. The expansion of the EV market is critical for this. The country already passed the one million electric vehicle mark. Half of these are BEVs, with the other half being PHEVs.

Government Participation will Drive the Market

Germany committed to becoming carbon neutral by 2045. The country includes primary targets of reducing emissions by at least 65% by 2030 and 88% by 2040, compared to 1990 levels. Transportation contributes 20% of total emissions in the country. Increasing the number of electric vehicles (EVs) on the road is critical for the country to meet these targets.

After China and United States, the country ranked third in total EV sales in 2021. It contributed approximately 11% of global EV sales. On a year-over-year (y-o-y) basis, the country reported a 73% increase in EV sales in 2021. The government and German automakers are pushing hard to make Germany the most significant European market and producer. They are working collectively to support the mass acceptance of electric vehicles in the country.

As part of the Corona economic stimulus package 2020, the German Federal Government introduced the innovation bonus, doubling the state share of the environmental bonus. The scheme was set to expire at the 2021 end, but the federal government agreed in November 2020 to extend it until the 2025 end. According to current funding, subsidies of up to EUR 9,000 (USD 9589.64) for a purely electric vehicle and up to EUR 6,750 (USD 7192.23) for a PHEV will be available until the 2022 end. The amount of the subsidy will be determined by the new federal government beginning in 2023. Moreover, the government in Germany also took a few steps to grow EVs in the country. For instance,

• October 2022: As part of its push toward net zero emissions, the German government approved a plan to spend EUR 6.3 billion (USD 6.1 billion) over three years to rapidly expand the number of charging stations for electric vehicles across the country. The plan calls for a 14-fold increase in the number of charging stations, from currently around 70,000 to 1 million by 2030.

Thus, the factors mentioned above may help the growth of High-performance electric vehicles in the country.

Competitive Landscape

The German automotive high-performance electric vehicles market is moderately consolidated and highly competitive with players such as BMW Group, Daimler AG, and Volkswagen AG, amongst others. Companies are launching new models and investing in R&D projects to provide the best technology to electric vehicle customers. For instance,

• December 2022: BMW Group began production of its BMW iX5 Hydrogen model at its Munich Research and Innovation Centre's pilot plant. During the assembly stage, the model-specific 12V and 400V electrical systems, high-performance batteries, electric motors, and fuel cells are all integrated alongside standard production parts.
• July 2022: AMTE Power Plc signed an agreement with MAHLE Powertrain (MPT), the Engineering Services subsidiary of the MAHLE Group. It will enable MPT to develop powertrain concepts for the next generation of high-performance electric vehicles and contribute to addressing the automotive industry's bottleneck in battery testing.

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