Germany’s electric vehicle (EV) market is set to grow significantly over the next decade, driven by technological innovation, government policy, and shifting consumer preferences for greener transport. This post explores key insights into the present and future of EV adoption in Germany, including trends in EV models, infrastructure developments, economic impacts, and projections for the sector’s future.
The German EV market has undergone a rapid transformation in recent years. By 2023, EVs accounted for 55% of the German car market, with battery electric vehicles (BEVs) accounting for 33.2% and plug-in hybrid electric vehicles (PHEVs) accounting for 22.2%. This is a significant shift, driven by the government’s ambitious climate targets and the increasing availability of new EV models. Forecasts point to continued growth, with EV market sales expected to reach $68.2 billion by 2025. Sales are expected to exceed 1 million vehicles per year by 2029, with a compound annual growth rate (CAGR) of 6.68%. Germany’s automotive sector is not only embracing EV production, but also positioning itself as a key player in the global market, as China, the world’s largest EV market, drives significant sales growth worldwide.
While the forecast is largely based on historical performance, monitoring future technological and political developments is important. On the technological front, Toyota has made significant progress in hydrogen technology, particularly with its Mirai model, which could be a game changer as the hydrogen infrastructure expands. In 2023, Tesla’s Model Y led the German EV market with 40,257 new registrations, followed by Volkswagen, Mercedes-Benz, and BMW, which successfully transitioned into the EV space. These brands dominate the BEV and PHEV segments, offering various models to meet different consumer preferences. Hyundai and Kia have also gained momentum, offering more affordable options and further diversifying the market.
Despite Tesla’s leadership, its new registrations fell 41% last year to less than 38,000 vehicles. Some analysts have linked this decline to Elon Musk’s comments on German politics. However, other carmakers bucked the trend. BMW overtook Tesla, registering just over 40,000 EV vehicles and grabbing an 11% market share. Volvo also saw an increase in registrations, albeit with a smaller volume of around 14,000. Volkswagen, Germany’s largest carmaker, maintained its market lead with around 62,000 registrations and a market share of over 16%. Mercedes followed in fourth place with 34,000 registrations. The impact of tariffs on Chinese EV exports to the EU remains to be seen.
As battery technology improves and production scales up, EV prices will become more accessible. By 2025, the average price of an EV in Germany is forecast to be US$85.4k, reflecting a balance between premium models and budget-friendly options entering the market.
Certain German cities are also leading the way in providing charging infrastructure, making EV ownership more convenient. Hamburg is the most EV-friendly city, with 678 public charging points at an affordable rate of €0.39 per kWh, which offers significant savings compared to gasoline. Munich and Berlin are prominent EV hubs, with 533 and 936 public charging points, respectively. Both cities are investing heavily in expanding their networks to meet growing demand.
In 2023, Germany will have more than one hundred twenty thousand public charging stations, and the public and private sectors are making significant investments to expand these networks. The EV market is expected to reach $88.4 billion by 2029, and charging infrastructure will be critical in supporting this growth.
The growth of EVs in Germany has significant economic implications, particularly in reducing reliance on fossil fuels and driving innovations in the automotive sector. Moreover, the environmental benefits are profound. Transportation accounts for nearly one-fourth of global CO2 emissions, and EVs represent a vital solution in reducing the transportation sector’s carbon footprint. When powered by renewable energy sources, EVs have the potential to become a near-zero-emission alternative, helping Germany meet its greenhouse gas reduction targets.
Looking forward, Germany is expected to continue leading the transition to electric mobility. By 2025, the country will witness a substantial increase in EV adoption and charging infrastructure development. Government incentives, such as subsidies and tax breaks, will further fuel this growth, ensuring that EVs become a standard mode of transportation for individual consumers and commercial fleets.
This Post was submitted by Climate Scorecard Germany Country Manager Maximilian Block.
Contact for EV Supervision in Germany
For further information or inquiries, contact the Federal Ministry of Transport and Digital Infrastructure (BMVI), which oversees transportation policy and initiatives related to electric vehicles in Germany.
Agency: Federal Ministry of Transport and Digital Infrastructure
Contact Person: Theresa Ferner, Head of EV Development Unit
Email: theresa.ferner@bmvi.de