You are currently viewing Rising energy costs could jeopardize the future of electric cars

Rising energy costs could jeopardize the future of electric cars

  • Post category:Economy News
  • Reading time:4 mins read

Rising electricity prices, the availability of raw materials and a chronic shortage of components are having a major impact on the production and sale of electric cars, warn German business leaders.

If the trend continues, there is also a risk of a domino effect. Investors could stop building charging facilities. This would make electric cars less attractive, as they would be less convenient to drive. Until recently, owning an electric car became more attractive as the price of gasoline rose. But since the recent increases in electricity prices, the price gap has narrowed.

Owners of electric cars, whether charging their car at home or through carrier contracts, have seen prices rise by 10% or more. Further hikes are expected as the price of electricity is tied to the price of gas, which has become increasingly scarce since Russia cut off gas supplies to Germany nearly a fortnight ago .

Allego, one of the largest charging station operators in Germany, raised its prices from 43 cents per kilowatt hour to 47 cents earlier this month. Fast charging, via a continuous stream, has gone from 65 to 70 cents per kilowatt hour, while the fastest charge has gone from 68 to 75 cents per kilowatt hour. Supermarkets, DIY chains and furniture stores that until recently offered their customers free charging services while they shopped are now chargeable.

“We have to be very careful”

According to economist Stefan Bratzel, this development poses an immediate threat to the industry. “The explosion in electricity prices could eventually become an acute danger for the transition to electric vehicles, and we must be very attentive to this,” he told German media.

“If electric cars become more expensive to operate, the e-mobility revival risks collapsing, as hardly anyone will buy an electric car,” Mr Bratzel said. He and other electric car advocates are now calling on the German government to ensure the price of electricity stays below the price of petrol, which they say is crucial for the future of electric cars. .

German government subsidies for electric cars will be cut in half, to 4,500 euros, from 2023, while buyers of plug-in hybrid vehicles, who currently receive a payment of 6,750 euros, will no longer be supported. The total amount available is capped at 2.5 billion euros, which is enough to pay the premiums for just 400,000 electric cars, or less than 1% of the cars on German roads.

Taxation of diesel and gasoline cars

A measure could be implemented relatively quickly. It consists of increasing the tax on diesel and gasoline vehicles. Electric cars are currently not eligible for this tax. They can also use bus lanes and parking spaces not available to non-electric cars in Germany.

In Norway, where the government has provided financial support for the purchase of electric cars and set up an extensive charging network, 64.5% of new cars registered last year were electric, putting the country in the lead in Europe. Germany is sixth with 13.6%, while Belgium’s share is currently 5.8%.