Germany's EV Shift Gains Momentum as CO2 Prices Rise and Trust in Functionality Increases
A rising CO2 price and increasing trust in electric car functionality are driving more Germans to consider switching to electric vehicles (EVs). This shift could reduce the country's dependence on oil imports. Christian Hochfeld, director of Agora Verkehrswende, has called for Germany to accelerate its transition to electric cars.
The 'Automobile Dialogue' aims to make electric cars more than half of new registrations as soon as possible. Marion Vieweg, project manager at Agora Verkehrswende, highlights the importance of trust in electric car functionality, particularly the battery, to stabilize residual values.
The German Federal Ministry for Economic Affairs and Climate Action has proposed a subsidy program for electric cars, with a proposed volume of several billion euros. This would make them more affordable compared to combustion engine vehicles. Under current conditions, electric cars offer cost advantages, especially for high-priced models or those charged at home using self-generated photovoltaic power.
A study by Agora Verkehrswende shows that subsidizing the purchase price of electric cars is the most effective measure to increase their competitiveness. An incentive of 6,000 euros makes them cheaper than internal combustion engines in 87% of usage scenarios. However, for people relying on public fast-charging, electric cars are rarely more cost-effective. Improving competition in public fast-charging is necessary to lower charging prices.
Stabilizing the residual values of electric cars is crucial. Reducing depreciation by 20% makes electric cars cheaper in 59% of scenarios. A comparison by the think tank shows that electric cars have lower total costs than combustion engine cars in several scenarios. Highly volatile gasoline and diesel prices also pose significant cost risks for combustion vehicles, making electric cars more affordable in comparison. With fuel prices 20% higher, electric cars are cheaper in 9% of public fast-charging scenarios.
The rising CO2 price and increasing trust in electric car functionality are driving the switch to EVs in Germany. With the proposed subsidy program and efforts to stabilize residual values, electric cars are becoming a more affordable and attractive option compared to combustion engine vehicles.
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