cap expert predicts EV sales boost in Germany
Are the charging infrastructure and the remarketing industry able to give EVs a boost? Nowhere is that question more relevant than in Europe’s largest car market. Max Robert Mueller, future car values manager for cap in Germany, shares his thoughts.
“Three main reasons are always mentioned for the fact that electric vehicles (EVs) are not yet sold in higher volumes,” observes Mr Mueller: “insufficient range, the lack of density of the charging network and a list price that’s too high, compared to conventional internal combustion engine (ICE) cars.”
And yet, the number of EV’s newly registered in Germany (pictured: Frankfurter Kreuz, Europe’s busiest highway interchange) has increased significantly since 2015 – the market share is still very small, but annual growth is in the double digits. And there’s room for more: “Up until the end of 2018, only about a quarter of the purchasing subsidies available via the Umweltbonus were spent on buying a battery-electric (BEV), a plug-in hybrid (PHEV) or a fuel-cell (FCV) car”, Mr Mueller observes.
As with ICEs, many EVs enter the used-car market within one to three years. The majority of EVs registered in Germany since 2015 cover the most popular vehicle segments (C, B, D) and include the Renault Zoe, Nissan Leaf, Hyundais Koniq and Kona, and Mitsubishi Outlander. The cohort also includes a number of popular German-brand EVs: the Audi A3 e-tron, BMW i3 and 2-Series Active Tourer, Smart ForTwo, Volkswagen e-UP!, e-Golf & Golf GTE or Passat GTE and Opel Ampera-e.
“All those cars have a design and quality appearance that is comparable to traditional ICE cars. The higher initial list price for EVs is less pronounced on the used-car market than it is on the new-car market and therefore more affordable for a larger customer base,” Mr Mueller says.
The problem is not necessary the EVs themselves. Despite the fact that public charging infrastructure is more extensive in Germany than elsewhere in Europe, drivers still see it as inadequate – the result of negative media coverage, Mr Mueller says. “Moreover, due to different provider tariffs, plugs or charging types, it’s difficult for any EV to charge at every charging station.”
The most convenient way to charge an EV today is to do it at home, drive into work and to recharge it there, ‘commuting from one charging cycle to the next’, Mr Mueller calls it. “If your distance from work is about 40 km, current driving ranges of one- to three-year-old EVs are perfectly suitable, plus they include sufficient buffer range for longer-distance trips. For PHEVs, the range is of course much longer.”
So, what are the main factors for successfully reselling EVs? Mr Mueller lists four: “Give buyers the experience of driving an EV; educate salespeople to sell the cars properly; and inform customers on ownership costs, especially on items that are irrelevant to an ICE car driver, such as a spare charging cable.” And last but not least: “Give used-EV customers the freedom for doing longer travels, for examply via dealer-provided ICE cars for vacations.”
Here’s another thing that will make it easier to buy a used EV: discount rates for installing wall boxes for home charging (or even re-using existing ones). Other options: a subscription model for wall boxes, or including them in battery rent price. “It’s also worth considering using some of the Umweltbonus to subsidise wall boxes for new and used EV customers.”
To further reduce EV anxiety, Mr Mueller suggests a change-back option for used-EV customers: “If they do realise that it is not for them, they should be able to go back to an ICE within six months after buying a used EV. What could also help, is a short leasing option of six to 12 months that increases the attractiveness of purchasing a used EV. This could also help convince used-car buyers to change to a used EV.”
In other words, prospective buyers need to be nudged towards used EVs. “The fact that car-sharing fleets like DriveNow and car2go include EVs has already increased EV visibility for a wider audience”, says Mr Mueller. “And several other initiatives can diminish the issue of the missing charging points”. Some examples:
- VW plans to use portable charging stations, equipped with second-life used EV batteries.
- Telecom AG is investigating how to use their internet distribution boxes as charging points. About 12,000 have already been identified next to parking lots, and thus ideal for recharging.
- Using electrical street lamps for recharging is already being used in London and Berlin.
However, “most of these opportunities don’t have a solid business case yet, because of the very low number of EVs currently on the street. It would only make sense to provide recharging to all EV customers, not just to certain brands or companies. But it’s clear that a denser recharging network would stimulate EV sales.”
With that, Mr Mueller sees a promising future ahead: “The current used-EV market and infrastructure in Germany can stimulate demand. At the moment, the target group is small, but newer EVs have longer ranges and the charging network can get denser. As a result, the attractiveness of EVs will dramatically increase.”