Germany’s business leaders have noticed a decline in vehicle production and sales due to the country’s high prices. Electric vehicle leaders in Germany have expressed concern that rising energy prices could derail the sector. Rising energy and raw material prices, a persistent lack of parts, and widespread declines in discretionary spending are all having serious effects on the auto industry. In a parking lot, there is a charging point for electric vehicles. A red gas-powered minivan occupies a parking spot nearby.
Do low-income neighborhoods stand to lose out if Biden succeeds in his plan to install charging stations for electric vehicles? As gas prices have risen, the allure of owning an electric vehicle has grown. However, the disparity in cost has narrowed as a result of recent increases in electricity rates, which have increased by about a third in Germany compared to a year ago.
Owners of electric vehicles have experienced price increases of 10% or more, regardless of whether they charge their vehicles at home or through a contract with a charging operator. As the price of gas has increased since Russia cut off its gas supply to Germany about two weeks ago, it is expected that the price of electricity would increase as well.
For example, at the beginning of this month, Allego, one of Germany’s top charging station operators, increased its charges from 43 cents to 47 cents per kilowatt hour. The cost of continuous current fast charging has increased from 65 cents to 70 cents per kilowatt hour, while the cost of ultra-fast charging has increased from 68 cents to 75 cents per kilowatt hour.
Many establishments, including discount grocers, home improvement stores, and furniture outlets, have begun charging customers for using charging stations while they shop. Automobile economist Stefan Bratzel sees this change as a serious threat to the sector.
He warned German media that the rapid increase in electricity costs could pose a serious threat to the shift to electric vehicles.
Bratzel, who also founded the Center for Automotive Management (CAM), warned that if electric cars were more expensive to use, the boom in electric mobility would collapse because “almost nobody” would buy an electric car. He and others who believe the future of the auto industry depends on electrified vehicles are now urging the German government to keep power costs below those of gasoline. Helena Wilbert, head of the Center for Automotive Research in Duisburg, recently commented on the declining popularity of electric vehicles in an article for the economic newspaper Handelsblatt.
After 2023, the state will no longer subsidize the purchase of plug-in hybrids, and the present subsidy of €6,750 will be reduced to €4,500 for buyers of electric vehicles. In total, just €2.5bn will be allotted, which would pay for incentives for only 400,000 electric vehicles or less than 1% of all vehicles in Germany.
Many experts in the field are pessimistic that the European Union would move quickly enough to implement a change that would uncouple the cost of electricity from that of natural gas. Now more than ever, it’s critical for the market boost to work, as CAM’s Bratzel put it.
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Increasing the levy on diesel and gasoline-powered automobiles is one proposal that might be adopted quickly. There is currently no vehicle tax for electric vehicles. In addition, electric vehicles are permitted to park in certain areas and ride in designated bus lanes. In Norway, where the government was an early proponent of providing financial incentives for the purchase of electric cars and putting in place a widespread charging network, 64.5% of new cars registered last year were electric vehicles, ranking it first on a list compiled by the Association of European Automobile Manufacturers.
The United Kingdom ranks ninth with 11.6%, while Germany comes in at number six with 13.6%.
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