Allianz Trade Study: E-vehicles Gain Importance – Domestic Manufacturers Less Profitable

A new study by the world's leading credit insurer, Allianz Trade, predicts that global sales of new electric cars will rise by 32.8% in 2024 compared to the previous year, surpassing the mark of 18 million new registrations. Leading this development is Europe, where Allianz Trade analysts expect an increase in new registrations of electric cars by 41.2%. Despite this growth, European and especially German car manufacturers face significant challenges. According to the study, they are losing ground particularly to China, having entered the electric vehicle segment late and now struggling to produce affordable models profitably.

"The crucial characteristic of a car is gradually shifting from engine capacity to battery and software capabilities. Amidst this structural change, China has emerged as a disruptive force, having invested in battery and software capacities for over a decade and securing a leading position," comments Jasmin Gröschl, Senior Economist at Allianz Trade and co-author of the study "Global Automotive Outlook: Navigating Through Turbulence."

In the competition with Chinese automakers and considering global market developments, it is therefore crucial for European manufacturers to quickly keep pace. However, rising transportation and production costs are affecting their competitiveness. In 2022, the average prices for electric vehicles in Europe were €55,821, 27% more expensive than combustion engines, while in China, electric cars averaged €31,829—making them one-third cheaper than combustion engines.

"The automotive industry is the backbone of the European economy, accounting for 6% of economic output, serving as a center of innovation and export, and employing a large number of workers in Europe with 6.5 million direct jobs. However, having long focused on their established strengths, European car manufacturers entered the electric car market late and are now struggling to produce affordable models profitably. As a result, European car manufacturers are now also experiencing a decline in their market shares," comments Milo Bogaerts, CEO of Allianz Trade in Germany, Austria, and Switzerland.