An entire industry is in crisis Why the e-car remains a slow seller for many brands
Whether in Germany, Sweden or France, the car industry is undergoing a transformation. While many brands only want to offer e-cars, Volvo is backing down.
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- Volvo has announced that it is taking its time to switch from combustion engines to electric drives.
- Volkswagen is in crisis and not only has to cut jobs, but also close plants.
- Dozens of other companies in the automotive industry are affected by severe job cuts.
What's going on in the car industry? Some are going all-electric, others are swimming in the opposite direction and want to sell combustion engines for as long as possible. And others are having to close their plants.
Volvo has thrown its plans for a purely electric future overboard. Originally, the Swedish car manufacturer only wanted to sell fully electric vehicles from 2030, but now it is continuing to focus on hybrid models. By 2030, at least 90 percent of cars sold are to be electric or plug-in hybrids. The remainder will consist of mild hybrids, in which an electric motor supports the combustion engine.
Volvo explains this change with changing market conditions and the wishes of customers. Despite this adjustment, the Group remains convinced that the future is electric, according to CEO Jim Rowan.
Volkswagen is in crisis
There are changes not only in Sweden, but also in our northern neighboring country. The situation at Volkswagen, Europe's largest car manufacturer, is getting worse. As part of a multi-billion euro cost-cutting program, the core brand VW has recently started talking about plant closures and additional compulsory redundancies.
The Board of Management of the car giant is convinced that the VW core brand must be comprehensively restructured: "In the current situation, plant closures at vehicle production and component locations can no longer be ruled out without rapid countermeasures," it says. The job cuts planned so far are no longer sufficient to achieve the savings targets.
Customers no longer want electric cars
"The situation on the new car market is extremely tense," said Constantin Gall from the consultancy EY to the news agency dpa. "We are a long way from a sustainable recovery, the gap to pre-crisis levels remains very large." In the year to date, almost 590,000 fewer new cars have been sold in Germany than in the same period in 2019, i.e. before the coronavirus pandemic.
In view of the low number of new electric car registrations, EY pointed out that an unusually high number of such vehicles were registered in August 2023. At that time, last-minute purchases by commercial customers had driven up new electric car registrations.
In Germany, the federal government is looking after the car market. It is now planning further state support to boost sales of electric cars. Specifically, this involves stronger tax incentives for e-cars as company cars. Demand for e-cars collapsed after the government stopped subsidizing them.
More companies have to lay off staff
At the beginning of the year, the automotive industry had to cut back sharply. Dozens of car manufacturers and suppliers worldwide have announced extensive job cuts. Autoliv is planning to cut around 8,000 jobs, while Bosch wants to cut a total of 1,200 jobs in the software and drive area by 2026, mainly in Germany. Continental will cut thousands of jobs worldwide in its automotive division, mainly in administration.
From when companies will only produce e-cars
Michelin is withdrawing from truck tire production in Germany and cutting over 1500 jobs. Polestar is cutting 15 percent of its global workforce, around 450 jobs. Stellantis is responding to weak demand with short-time working and cutting 600 jobs. The reason for this major change is rising inflation and the effects of the war in Ukraine.
Mercedes-Benz wants to become the market leader in electric drive systems
Further changes are coming in the area of e-cars and renewable energy. It has long been known that Mercedes-Benz is investing heavily in e-mobility. But now Mercedes-Benz is going one better. In July, the Group opened the so-called eCampus in Stuttgart. This is where the development of lithium batteries is to take place. Hundreds of employees are to take up their positions in research and optimization at the eCampus as early as this year.
Mercedes also wants to have only e-cars in its range by 2030. The vision: everyone should be able to afford a Mercedes with an electric drive in the future. However, critics see a hurdle. This is because Mercedes-Benz is on the expensive side compared to other brands. In addition, it is not clear how a group can invest several hundred million euros in the development and production of an eCampus and at the same time reduce the price of an E-Class by 20,000 euros.