Challenges persist in the charging infrastructure for electric cars
In 2030, at least 15 million electric cars are to roll on Germany's roads. This goal, which the Federal Government defined in its coalition agreement in autumn 2021, aims to reduce greenhouse gas emissions in the transportation sector by 48% by 2030 compared to 1990 levels. At the opening of the IAA automotive show in early September, German Chancellor Olaf Scholz (SPD) reiterated the expansion plans for electromobility. These plans include the pre-emptive expansion of the charging infrastructure, aiming for 1 million publicly accessible charging points by the end of the decade.
Two years after their introduction, the government's resolutions for the automotive sector seem even more ambitious. According to industry expert Stefan Bratzel from the Center of Automotive Management (CAM) in Bergisch Gladbach, the goal of 15 million electric vehicles is currently far from reach – by 50%, to be exact. As of July 1st, Germany had 1.17 million registered battery-electric vehicles (BEVs), constituting 2.4% of the total car fleet of over 49 million. Bratzel suggests that, given the current situation, a "reality check" is needed to harmonize the political goals of market growth with the necessary action programs.
Heavily reliant on incentives
After the expiry of state subsidies for plug-in hybrid vehicles at the end of 2022, the environmental bonus for commercially used battery electric vehicles expired on August 31st. This was a significant cut, especially since almost 40% of all newly registered electric cars in Germany were company cars. The sharp decline in new electric car registrations in September highlighted the continued dependence of the German electric car market on state incentives. New incentives might be discussed again if electric car sales in the coming year are as weak as currently expected.
One of the reasons for the delayed breakthrough of electromobility in Germany, besides the high prices of electric vehicles, is the slow expansion of the charging infrastructure. Based on the results of a recent survey commissioned by the Association of the Automotive Industry (VDA), the availability of charging stations is still perceived as insufficient. In a representative survey of over 1,000 participants, 68% of respondents criticized the availability of charging stations in their local area. Additionally, 61% noted deficiencies in charging facilities at shopping locations, and 49% mentioned issues with charging options on highways and rural roads. Only 7% of respondents described the charging infrastructure on highways as good or very good.
Far from a comprehensive charging infrastructure
As of July 1st, the Federal Network Agency's charging point register listed a total of 97,495 regular and fast charging points with a total capacity of 3.37 gigawatts – over 13,300 more than at the beginning of the year and around 36,800 more than in early 2022, shortly after the current coaltion took office. While a European Automobile Manufacturers' Association (Acea) analysis of last year's data showed that Germany had the second-highest number of publicly accessible charging points in the European Union, it still lags behind in terms of charging stations relative to its population and average charging capacity per point, as per LBBW Asset Management.
A comprehensive charging infrastructure is still a distant goal for Germany. According to the VDA, as of July 1st, there was not a single public charging point in about half of the municipalities nationwide. The situation is even more severe for fast-charging infrastructure, which is particularly crucial for the success of electromobility. In more than eight out of ten municipalities, there are no fast-charging points. 'Expanding the charging infrastructure for electric vehicles is one of the most urgent infrastructure tasks for Germany, but it has been neglected far too much in the past', says VDA President Hildegard Müller. The survey shows that all key stakeholders in the charging infrastructure expansion need to accelerate their efforts.
Master plan awaits implementation
'The expansion of the charging infrastructure is a joint effort; all political levels and relevant stakeholders, including the energy industry, oil industry, trade, and of course, the automotive industry, need to contribute', emphasizes Müller. She further criticizes the government's progress in implementing the initiatives one year after the introduction of "Masterplan Charging Infrastructure II." The master plan, which defines 68 measures related to funding, enabling municipalities, availability of land, power grid integration, charging at buildings, and heavy commercial vehicles, outlines the right action areas. 'But implementation is lacking', notes the VDA president. It's crucial to push ahead with the expansion of the charging infrastructure at a high pace and implement the measures. Significant catch-up work is needed concerning the expansion of the power grid.
Industry experts also consider the current pace of charging infrastructure expansion to be insufficient. As of July 1st, the Federal Motor Transport Authority counted approximately 2.06 million registered electric cars in Germany, including plug-in hybrid vehicles. The ratio between new electric vehicle registrations and new public charging points stands at a factor of 20. 'The gap between demand and supply will widen further, making it even more challenging for electric vehicle users in the coming years', believes Arnt-Philipp Hein from the consulting firm Alix Partners. 'While more charging points will be available, the number of vehicles will outpace them significantly, making it harder to find an open charging point. This situation will be comparable to seeking parking in Munich's Schwabing area at 6 PM', he states.
Municipalities in view
In order ro expand the charging infrastructure in rural areas, the focus needs to be on municipalities and the administrative support provided by the federal and state governments. Hein points out the support envisaged in the German government's master plan through appointed regional charging infrastructure managers. Given the expected increase in affordable electric cars starting in 2025, rapid action is essential: the average time from a municipality's decision to establish a charging point to its operational launch is around twelve months. Hein considers financial support for municipalities necessary in the initial phase, especially when the operation of charging points is not financially viable.
The Monopolies Commission also emphasizes the role of municipalities and considers them essential players in developing competitive local charging networks. In its recent "Energy Sector Report," the advisory panel underscores the necessity of their support in tenders for charging station installations. LBBW Asset Management sees "rays of hope" in the acceleration of procedures for the charging network expansion . They further highlight the completion of the first tender for the Germany-wide network, an initiative by the Federal Ministry of Transport aiming to provide "a reliably available offering of fast charging options" and eliminate "blank spots on the charging map" in Germany. As of late September, ten companies are set to establish approximately 900 locations with nearly 8,000 ultra-fast charging points for electric vehicles, extending coverage to rural areas as well.
'It is a game of scale'
A more extensive deployment of charging stations in cities and on highways is deemed necessary by Eric Heymann of Deutsche Bank Research, given the anticipated significant rise in electric passenger cars and electrified heavy-duty vehicles in the coming years. The future landscape of public charging point operators remains uncertain for industry experts. Forecasts suggest that the current number of over 300 different providers is likely to decline to double digits. 'It is a matter of scale', notes Marcus Hoffmann from Strategy&, PwC's strategic consulting division. Apart from the individual interests of providers, user convenience will play a pivotal role. Extended driving ranges, quicker charging speeds, and an anticipated 50% usage rate at home or workplace charging stations might result in around 300,000 public fast-charging stations being adequate for Germany's electric mobility needs by 2030.