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Demand for company e-cars could swamp automobile manufacturers

The consultancy company PwC is expecting a sharp increase in the demand for electric automobiles and batteries from 2019, following a cabinet decision of the German federal government. The problem: German automobile manufacturers are not adequately prepared for it.

04 Sep. 2018
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Demand for company e-cars could swamp automobile manufacturers (Photo: Deutsche Messe)

The future of the German automobile industry will begin on January 1, 2019, proclaims PwC in a recent analysis. The reason for this is the introduction of tax relief on company cars with electric and hybrid engines, which will take effect from next year. “The market for company vehicles is particularly important for new technologies and standards to become established, as it is regarded as having a fast turnover: vehicles are not driven for the average of seven years, but rather for just two to three,” says Christoph Stürmer of PwC. Many of the automobiles thus end up on the used car market relatively quickly – and enable customers with less buying power to use the technology.

This could become a problem for the domestic automobile industry: according to PwC, it has weighted its electric strategy heavily towards SUVs – but the vehicle fleet regulations of most companies do not allow these to be used as company cars. On the one hand, these regulations have to be revised quickly. On the other, there is an urgent need for action on the part of German manufacturers, as foreign competitors might otherwise step into the breach.

At the same time, the German Association of the Automotive Industry (VDA) has described the cabinet decision as a “positive contribution to the surge in the market for electric mobility in Germany.” By contrast, according to the German business newspaper Handelsblatt , the VCD Verkehrsclub criticized the tax incentive as an “antisocial stimulus package for the automobile industry.”