KfW Research: Electric cars are currently being used primarily by high-income households and in rural regions

• Income, age and home location are factors in the decision for an electric car
• Cutting emissions and technological innovation are the main purchase motives
• Electric cars are mainly displacing internal combustion engine cars

Germany still has few electric cars, but the uptake is growing fast. According to the Federal Motor Transport Authority, these vehicles already account for nearly 14% of all new car registrations, and the trend is rising. A special analysis conducted under the KfW Energy Transition Barometer provides deeper insight into the factors that drive this increase. The representative survey by KfW Research has revealed that 1.3% of German households currently possess a battery electric or plug-in hybrid vehicle. A further 1.1% of households plan to use such a vehicle within a year. These are mostly high-income households in detached or semi-detached houses. Electric cars are also more common than average in rural regions.

Households with above-average income use electric vehicles around three times as often as those earning below-average income. The same applies to households living in detached or semi-detached houses, where electric vehicles are more than twice as common as in multi-family dwellings. Age also plays a role. Younger people are around twice as likely to use such cars as older people. Home location also makes a difference. In rural regions, the share is around 50% higher than in towns and large cities. This is likely due at least in part to charging and parking infrastructure, which is usually better in the countryside than in cities.

In order to estimate future uptake, KfW Research asked households that are not yet using nor planning to use an electric car within a year whether and when they might decide to. Around half of respondents expect to be using an electric car on a regular basis in the future, 6% already within the next 2 to 3 years, 21% within 4 to 10 years and a further 22% after that. Around one third (32%) do not expect to switch to an electric car. Even so, approx. 15% also do not expect to use one in future but generally get by without a car to begin with. These percentages are basically the same as in the previous year, so there appears to be no change in the rate of uptake of electric cars.

The main motives for buying an electric car are concerns about climate change (78%) and the innovative nature of the technology (62%). The main reasons not to buy one include first and foremost the high price (61%) and, in particular, doubts about practicability, for example with regard to charging infrastructure (69%) and range (54%). Over time, doubts about the environmental footprint of electric cars have grown and are now mentioned by almost one in two households (48% in 2020 compared with 36% in 2017). Given the increasingly greener electricity mix and predominantly positive research findings about their climate impact, this is quite a surprising trend.

Climate balance analyses are based on the assumption that an electric vehicle replaces trips with an ICE car and is not purchased additionally. So far there is little empirical evidence of this. The KfW Energy Transition Barometer now shows that around 30% of household in Germany that possess or plan to acquire an electric vehicle currently use only one vehicle. It has also been shown that electric cars are indeed mainly replacing ICE cars. The surveyed households indicated that nearly three fourths of the trips undertaken with their electric car would otherwise have been done with an ICE car (74%). The cannibalisation of mass public transport (5%) and bicycles (2%) is moderate.

“The market for electric cars is on the move, and there is plenty of evidence that the decade of the 2020s could bring a breakthrough in electric mobility”, said Dr Fritzi Köhler-Geib, Chief Economist of KfW. “The rapid growth is good for the climate because as a rule, these vehicles’ climate footprint is clearly positive already and steadily improving with the expansion of renewable energy. For the energy transition to succeed, however, electric mobility must be mainstreamed as an attractive option in all groups of society”, added Köhler-Geib. “The cost-efficiency of electric cars is an essential aspect. Targeted incentives such as the introduction of a price on greenhouse gas emissions in the transport and heating sectors on 1 January 2021 support the transition to climate-friendly technology. In addition, an efficient charging infrastructure must be put in place to make electric cars a viable form of day-to-day mobility. This also includes addressing areas in which implementation faces particular challenges, such as multi-family dwellings.”

The current analysis on the subject of electric mobility is available (in German only) at:
www.kfw.de/KfW-Konzern/KfW-Research/EMobilitaet

The database:
The analysis conducted by KfW Research on the use of electric vehicles is based on the KfW Energy Transition Barometer 2020, a representative survey of some 4,000 households in Germany on the topic of energy transition. The survey took place from 11 November 2019 to 29 January 2020. More information:
www.kfw.de/energiewendebarometer