German car manufacturers now dominate the electric vehicle market in Germany. VW, along with its brands Skoda, Audi, and Seat, are included among the top 10 best-selling electric vehicles.
Foreign brands like Renault and Tesla are struggling in the German electric vehicle market. Their sales are declining, while German manufacturers dominate.
Overall, electric vehicle sales in Germany dropped significantly last year. “Instead of the hoped-for boom in electric vehicles, sales levels were noticeably lower than in the previous two years,” said Constantin M. Gall, Managing Partner and Mobility Lead for Western Europe at EY. New electric vehicle registrations fell by 27% last year following the early termination of purchase subsidies.
“Almost all manufacturers have felt the decline in interest for electric vehicles—but overall, German groups have managed to establish themselves in a very challenging market environment, aided by attractive model launches,” Gall explained.
German Car Manufacturers Lead the Market
Domestic car manufacturers now dominate the German electric vehicle market, having increased their market share from 49% to 61% by 2024, according to an EY study based on data from the Federal Motor Transport Authority.
German brands are also outperforming in terms of sales. In brand comparisons, Volkswagen clearly leads with 62,000 vehicles sold. Along with Skoda, Audi, and Seat, three other VW brands are also among the top 10 best-selling electric vehicles.
According to EY data, sales declines also affected German car groups, but only by 9%, compared to larger losses among foreign brands. Tesla, Stellantis, and Renault experienced particularly sharp declines, with sales dropping by 42%, 66%, and 68%, respectively.
Chinese Groups Struggle to Gain Ground
For Chinese manufacturers, the decline was just 14%, slightly less than for German manufacturers. Despite price advantages, groups like Geely, BYD, and SAIC failed to consolidate, with their market share only modestly increasing to 8–10%. Surprisingly, Chinese brands performed worse towards the end of the year, with fourth-quarter sales dropping by 17% and their market share falling back to 8%.
Jan Sieper of EY does not expect a trend reversal next year, given the competition from the Far East. “We are certainly seeing significant efforts by Chinese manufacturers to establish themselves in Germany. But so far, successes have been limited, despite often good equipment and favorable prices,” he explained. “To be truly successful, new entrants need a comprehensive strategy and persistence.” He emphasized, “It takes time to build trust and brand loyalty as a new player.”
Overseas Challenges for German Manufacturers
While Chinese manufacturers are struggling to establish themselves in Germany, the challenges for German manufacturers are mainly abroad, especially outside the EU. “German high-end electric vehicles are far from matching the success of comparable combustion engine models in terms of sales,” explained Gall, an EY expert.
“In the new year, the weakening of electric vehicle sales poses a potentially very costly risk for many manufacturers who cannot meet the EU’s stricter emission targets simply because they are not selling enough electric vehicles,” Gall noted. As a result, he expects price reductions and attractive financing offers on a broad front, while combustion engine cars are likely to become more expensive.
Business Climate Worsens
The lack of orders and weak forecasts for foreign markets are leaving their mark. According to the Ifo Institute, morale in Germany’s crisis-hit automotive industry has worsened further. The monthly business climate index in the automotive sector fell to -34.7 points in December 2024, down from -32.4 points in November, the Munich-based economists reported.
The Institute for Economic Research surveys companies every month on their assessment of the current business situation and their expectations for the coming months. When companies are mostly pessimistic, the respective indicator values are negative. In December, expectations for the coming months became even more pessimistic, with the corresponding indicator dropping from -30.9 to -37.1 points.
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