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Germany is No 1 in Europe for EV production, No 2 in the world

Germany’s automakers manufactured around 1.27 million BEVs and PHEVs in 2023, putting it at No. 2 behind China, but 2024 will be bumpy.

The German automotive industry association VDA says that 995,000 purely electric vehicles rolled off German assembly lines in 2023.

China dominates global EV production, but most of its cars are sold domestically. By contrast, 76% of German EVs are sold abroad. The US holds the spot for the world’s third-largest EV maker. And Germany, the home of key automakers such as Volkswagen, BMW, and Mercedes-Benz, leads Europe with more EVs produced than second-placed Spain (256,000) and France (225,000) combined.

DW reported in December that “the Federal Motor Transport Authority calculates that around 10 million EVs will be registered in Germany by January 1, 2030. Depending on the size of the current vehicle inventory, this would correspond to an EV share of 20-25%.”

However, Germany’s 2024 EV manufacturing outlook isn’t all smooth sailing. The German government’s EV subsidy program, which was supposed to run until the end of 2024, was suddenly shelved in December after the 2024 budget was revised. Germany’s constitutional court created a €60 billion ($65.36 billion) hole in the country’s state budget, forcing the government to scrap several programs.

The government scheme offered up to €6,750, which was funded by the state and carmakers, depending on the value of the EV. But as of January 1, 2024, Germany’s federal subsidy for BEVs with a net list price of up to €45,000 is €3,000. Manufacturers must also contribute €1,500, for a total subsidy of €4,500. However, vehicles with a net list price of more than €45,000 are no longer eligible for funding.

German automakers face software development and supply chain complexities, putting them behind Tesla and Chinese OEMs with more advanced EV technologies and efficient supply chains​. Plus, German automakers often have to collaborate with American and East Asian companies to meet their battery needs, leading to dependency issues and a slower pace of catching up in battery technology development.

But Germany is also boosting its battery production capabilities, with companies like Volkswagen partnering with firms such as Northvolt to secure a stable supply chain for EV batteries.