great pessimism grips manufacturers in Germany and the United States

While in France, electric car manufacturers are delighted with a sales record, German companies are looking gloomy in the face of competition and American motorists are struggling to take the plunge. Our correspondents describe the situation on site.

Whether fully electric or simply hybrid, one in four cars sold in France in 2023 plugs into a socket: this is a record, according to published figures Monday 1^er January by the Automobile Platform (PFA), which represents the French automotive industry.

In the United States, a symbolic milestone was reached in 2023 with one million 100% electric vehicles sold. However, this is not such good news, if we take a step back. Indeed, sales of fully electric vehicles had doubled for two years in a row, but in 2023, the increase will be between 25 and 30%. In other words, the market is reaching a plateau, despite a seemingly favorable environment.

Americans remain hesitant despite the Biden plan

American President Joe Biden’s major plan for the environment is largely dedicated to electric cars. In addition to investments in the network of charging stations, significant financial incentives have been put in place for the purchase of an electric vehicle (provided that it is “made in the USA”). The other good point is that the price of these vehicles has fallen to $50,000 on average, from $65,000 in 2022. But these conditions were not enough. In total, electric and hybrid sales represent less than 18% of the market. The country is therefore lagging behind Europe or China.

Joe Biden’s ambitions are nevertheless high: he wants the sector to represent 50% of the American automobile market by 2030. The price of these cars, despite the drop, remains very prohibitive for Americans. It can be explained by the size of the cars sold across the Atlantic, where there is a strong attachment to large pick-ups. Greener machines, but still just as huge, are the paradox and the impasse of the American automobile market.

The other point to improve is the strength of habits, in the land of the queen car. Nearly 60% of Americans say their next vehicle will probably not be electric. Three-quarters of the population are concerned about the lack of charging stations and battery life, according to surveys conducted by Ipsos. Result: electric cars are piling up in manufacturers’ parking lots. Inventories have grown by more than 500% over the past year, electric vehicles are stored for 82 days on average, compared to 64 for their diesel or gasoline equivalents. We still have to wait for the revolution wanted by Joe Biden…

Germany is very pessimistic about its industry damaged by competition

Pessimism about the future of electric car production is also very clearly felt in Germany, the leading vehicle producing country in Europe. The year 2024 promises to be that of “uncertainty”, this is the term used in the press release published Tuesday morning by the Manufacturers’ Federation. They complain of driving in thick fog since the government decided, at the end of 2023, overnight, to stop the payment of the ecological bonus. The end of this boost, which could go up to 4,500 euros, hurts Germany’s chances of achieving the objective it had set for itself: 15 million electric cars on its roads by 2030.

The slowdown in sales was already felt in the second half of 2023. In addition, the market is shrinking, because German manufacturers, already left behind by Tesla, now fear being overtaken by low-cost Asian manufacturers, especially Chinese.

The transition to electric cars leads to thousands of layoffs

It is recognized that building an electric car requires fewer personnel. So the transition is structurally accompanied by social disruption. Manufacturers and subcontractors are laying off workers all over the place. Volkswagen, 2^e global manufacturer, will reduce its payroll by 20% in the coming years. Thousands of job cuts are also planned at Bosch, Continental and ZF, the gearbox manufacturer. And as production costs (energy and raw materials) are soaring, vehicle production has never been lower in the country. Only three and a half million in 2023 is two million less than 10 years ago.

These difficulties, which affect all Western manufacturers, affect even more the leading European automobile country. The Germans face strong competition in their core target: the “premium car” segment. Experts predict that high-end Chinese cars will be of equivalent quality within five years, and much cheaper. The Germans now want to urgently produce small models, cars costing 25,000 euros for small budgets. Industrial cooperation between Volkswagen and Renault is mentioned without being confirmed.