VDIK Forecast 2025: Car Market Grows Thanks to E-Cars - Government Must Improve Framework

The Association of International Motor Vehicle Manufacturers (VDIK) expects around 2.85 million new car registrations for the coming year 2025. This anticipated slight increase is based on strong growth in battery electric vehicles (BEVs), the association stated. "We are optimistic about the new year, which is why our forecast is based on the assumption that the new federal government will make significant improvements in the framework conditions for electromobility. Without further significant incentives for the ramp-up of electromobility, there are likely to be no increases in the BEV sector again in 2025. The consequence would then be a decline in the overall market to around 2.7 million cars," said the newly elected VDIK President Imelda Labbé. On average over the past years, international manufacturers have performed better than the overall market. Their market share has increased from 35.9 percent in 2014 to 42.6 percent over the last ten years. For the overall market, the VDIK expects around 2.82 million cars by the end of 2024, which is about 25,000 fewer vehicles than the previous year.

"Especially striking is the massive slump in battery electric vehicles. This development is not unexpected and is due to the sudden end of subsidies in December 2023. Currently, only every fifth new car is a battery electric vehicle or a plug-in hybrid," said the previous VDIK President André Schmidt.

However, the tightened CO2 fleet limits are likely to contribute to ensuring that E-cars must be brought to market with increased sales efforts in 2025 to provide customers with an affordable entry into electromobility. According to current projections, the VDIK expects 580,000 battery electric vehicles in 2025. This is 200,000 more vehicles than this year and slightly more than in 2023, the last year of subsidies. Plug-in hybrids, when used appropriately, can also make a significant contribution to meeting the CO2 fleet limits compared to pure combustion engines. The number of plug-in hybrids is expected to be 200,000 vehicles in 2025. The peak of 360,000 vehicles from 2022, the last year of plug-in hybrid subsidies, cannot be nearly reached.

“Our member companies will make every effort to meet the CO2 targets, even though the targets cannot currently be derived from customer demand. The VDIK therefore calls on the EU Commission to closely monitor this issue and prevent the automotive industry from being burdened with fines. Penalties would lead to a further restriction of investment for the automotive transformation. This must be prevented with all our might," appealed Labbé.

Confidence in the drive technology, economic affordability, and the charging infrastructure will determine whether consumers will be able and willing to switch to climate-neutral drives as quickly as currently forecast for 2025. It will therefore mainly depend on the framework conditions how many battery electric vehicles will be newly registered next year, according to the association. The international car manufacturers currently have over 130 BEVs in the program. In 2025, further models in the entry-level segment starting at 25,000 euros will be introduced.