Daily Reports
A recent McKinsey study reveals that a significant proportion of electric car owners in Germany and other countries regret their purchase, primarily due to high operating costs and inadequate charging infrastructure. According to the study, 24 percent of German electric car drivers intend to switch back to combustion engines, a sentiment echoed even more strongly in countries like Australia and the USA.
The study, titled 'Mobility Consumer Pulse,' highlights that the primary reasons for this dissatisfaction include high total operating costs (47 percent), inadequate charging infrastructure (27 percent), and changes in travel behavior on long distances (26 percent). In Germany, the demand for electric cars has also declined, with only 29 percent of non-electric car drivers considering a BEV or PHEV model, down from 34 percent in December 2022.
Interestingly, the study also found that interest in electric cars from Chinese manufacturers is higher in Germany than the European average. About 30 percent of German electric car owners and potential buyers are inclined towards Chinese models, attracted by promises of long range, innovative technologies, and good value at lower prices.
In a related development, China has proposed reducing tariffs on large motor vehicles from the EU, aiming to benefit German luxury car manufacturers like Mercedes-Benz and BMW. This move comes as the European Union considers imposing up to 48 percent tariffs on Chinese electric vehicles later this year. The proposal was discussed between Chinese Minister of Commerce Wang Wentao and German counterpart Robert Habeck in Beijing.
The tariff reduction aims to leverage Germany's influential auto industry to pressure Berlin against supporting the EU's proposed electric vehicle tariffs. German Chancellor Olaf Scholz has expressed a desire for a negotiated solution, emphasizing the need for progress by China before temporary tariffs are imposed from July 4.
The ongoing negotiations between the EU and China reflect a complex interaction between economic interests and political strategies. While the European Commission argues that the proposed tariffs are based on legal conclusions from a study of government subsidies provided by Beijing, China views the step as protectionist. The negotiations have broader political and economic implications, with China using the tariff proposal to send a signal to other major economies.
- Felix Rupalla, Senior Asset Leader at McKinsey, notes that the dissatisfaction among a minority of e-car drivers is largely due to the insufficient charging infrastructure, especially fast charging points on medium and long-distance routes. This gap in the charging network disproportionately affects long-distance travelers, even though such journeys are infrequent.
- Deborah Elms, head of trade policy at the Heinrich Foundation, suggests that the European Union might delay the imposition of tariffs pending the outcome of the negotiations. 'As long as both sides make sufficient progress toward an answer, it is possible to stop the clock,' she said.
- Bloomberg reports that the Chinese government has escalated threats targeting various sectors, including French brandy, Spanish pork, and German large-engined vehicles, in an attempt to turn discussions into trade negotiations and put bilateral pressure on EU member states.
