The electric vehicle (EV) boom has slowed, and the shift towards e-mobility has stalled, hitting local suppliers particularly hard.

Munich – The Rise and Fall of E-Mobility

The momentum for electromobility has suddenly halted. Since the end of the government purchase incentive, EVs in Germany are less in demand than before. In the first four months of the previous year, 124,476 electric vehicles were newly registered in Germany. This number has dropped to 111,005 from January to April 2024.

Decline in EV Sales: Impact on German Suppliers

While the decline is not a collapse, the government’s measure has halted the rapid transition away from combustion engine models. It is now evident that gasoline and diesel vehicles will remain part of the European landscape for many years to come.

This development has significantly impacted numerous local suppliers. Automakers (OEMs) are dealing with declining revenues, but the situation is much worse for companies responsible for providing components.

Mercedes-Benz Reduces Orders – Lack of Fairness?

A report from Wirtschaftswoche highlights the issues arising from EV sales falling short of expectations. Companies like Mercedes-Benz are currently ordering significantly fewer components than planned, causing turbulence for local suppliers.

Mercedes-Benz, for instance, has faced criticism from ZF Friedrichshafen for ordering far fewer electric drivetrains for the Mercedes eSprinter than initially agreed upon. A door handle manufacturer reportedly had a heated dispute over compensation payments with the premium brand after investing heavily in expanding production capacities for 2024.

Near the end of the year, Mercedes cut the planned increase in orders by 33 percent due to low EV demand and allegedly reduced them again a few weeks ago. This has resulted in supplier losses running into millions, which, according to an insider, does not concern the automaker. The report mentions that since Mercedes has been facing difficulties due to EVs, “fairness seems to no longer matter.”