Last year, we heard from several customers who complained about a slowdown in the electromobility sector. In discussions with our German colleagues, it became clear that the European automotive industry wanted to make a last-ditch effort to sell as many vehicles with combustion engines as possible before the new rules come into force on January 1, 2025.

In this blog post, we look at why the year 2025 could be a turning point for electromobility, what framework conditions will apply from January 1, 2025 and why Chinese electric vehicles could increasingly conquer the Swiss market. We also take a look at the impact on the distribution grid, charging infrastructure and load management.

Review 2024: Car manufacturers are (still) increasingly promoting fossil fuels

Although there is a clear trend towards electromobility, many car manufacturers made targeted efforts to maintain sales of fossil-fuel vehicles (petrol and diesel engines) in 2024. This was reflected in the sales figures for electric cars, whose rate of growth has slowed noticeably.

• Background: High margins for combustion engines and (still) comparatively low production capacities for electric cars led to some companies once again supplying the market with lower-priced petrol and diesel vehicles.
• Buyer behavior: Many prospective buyers took advantage of these offers to stock up on a classic combustion engine before possible restrictions or price increases.

However, this approach cannot be repeated in 2025. This is because the CO₂ regulations in force from2025 will result in severe fines if the proportion of new fossil-fuel vehicles is too high.

New CO₂ limits from January 1, 2025: stricter requirements, higher costs

From 1 January 2025, a new, stricter CO₂ limit per kilometer driven will come into force in Switzerland. In concrete terms, this means that car fleets will be allowed to emit significantly fewer emissions on average than before.

• Financial consequences: Vehicle dealers who do not switch to low-emission or zero-emission vehicles in time are already facing considerable fines. Some are even talking about millions if the sales figures for electric and hybrid vehicles do not increase significantly.
• Greater pressure to innovate: In order to meet the CO₂ targets, manufacturers will have to develop and advertise more new electric and hybrid models. Sustainable materials and more efficient production processes can also help to reduce the CO₂ footprint of vehicles.

This set of rules is an important step in Switzerland's move towards greater climate neutrality - and could particularly affect those retailers who have so far been reluctant to embrace structural change.

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Chinese electric models: potential to flood the market

One aspect that is only slightly noticeable today and could come to a head in 2025 is the growing supply of Chinese electric vehicles.

• Increasing competition: Chinese manufacturers such as BYD, NIO and other newcomers have made enormous progress in terms of technology, design and range in recent years. Thanks to large production capacities, they are also able to offer high-quality vehicles at sometimes very competitive prices.
• Attractive price-performance ratio: Chinese electric cars are likely to be a serious alternative for price-conscious buyers in particular - especially when well-known European manufacturers are struggling with rising prices due to high investment costs in electromobility.
• Quality and image change: While Chinese cars used to be often associated with prejudices, not only the quality but also the image of many brands has improved in recent years. Some models now score on a par with established competitors in test reports.

Effects on the distribution grid, charging infrastructure and load management

The increasing number of electric vehicles brings with it new challenges for electricity suppliers and infrastructure planners:

1. Distribution grid capacity
   • If more and more Swiss people switch to electromobility, the local distribution network must be expanded accordingly. More charging stations, especially in residential areas, will lead to higher peak loads.
   • Municipalities and energy suppliers are required to review and expand their grid capacities at an early stage. Without timely measures, bottlenecks could arise that lead to temporary power restrictions or even grid instability.
2. Charging infrastructure
   • In order to keep up with the e-boom, not only more but also different types of charging points are needed: from fast DC charging stations along highways to AC charging points at parking lots, in garages and in public spaces.
   • The federal government and cantons are increasingly focusing on funding programs for expansion. There is an urgent need for charging infrastructure not only in fast-charging parks but also in underground car parks where tenants want to charge their electric cars.
3. Load management‍

While hydro, solar and wind energy is increasingly being fed into the grid in some regions, peak loads must be strategically controlled through charging processes. This is where intelligent load management comes into play at the various grid levels.

Outlook: What does this mean for consumers and retailers?

1. Broader range: The availability of electric cars and plug-in hybrids is likely to increase massively. Both European manufacturers and Chinese newcomers are constantly bringing new models onto the market - in all price categories and vehicle segments.
2. Price pressure and subsidies: The stricter CO₂ limits are increasing the pressure on dealers to price / promote electric and hybrid drives more attractively. Purchase premiums, leasing campaigns or other discounts could therefore be of interest to consumers.
3. Infrastructure and services: The increasing number of e-vehicles requires a rapid expansion of the charging infrastructure, especially fast charging stations along highways and in urban areas. In addition, the range of services, such as mobile charging facilities or e-car sharing services, is growing.
4. Grid stability and convenience: Thanks to smart charging concepts, charging processes can be made more efficient in the future. This not only increases convenience for consumers, but also supports the stability and reliability of the Swiss electricity grid.
5. New mobility concepts: In addition to buying a car outright or car sharing, subscription-based offers and car-as-a-service models are becoming increasingly important. Some providers in Switzerland are already experimenting with flat rates for electric cars that include maintenance, insurance and electricity costs.

Conclusion

The future of electromobility in Switzerland faces a major upheaval from 2025. While car manufacturers were once again trying to sell as many fossil-fuel vehicles as possible in 2024, the new CO₂ limits continue to put significant pressure on the combustion engine. At the same time, China is increasingly establishing itself as a major player in the global and Swiss electric car market.

However, the growing proportion of electric vehicles also increases the demands on the Swiss distribution grid. The expansion of the charging infrastructure and effective load management are key elements in ensuring that e-mobility functions reliably and sustainably.

This creates an exciting situation for consumers: the choice of e-vehicles is growing, prices could fall due to subsidies and increasing competition - and ecological aspects such as lower emissions and more sustainable production are increasingly coming to the fore. Electromobility is making inroads into the Swiss automotive industry - and 2025 will go down as one of the key years in the history of sustainable mobility.

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Photo: Wikipedia