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E-Mobility

German engineers have plenty to offer when it comes to e-mobility – they better, as the aim is to have 1 million e-vehicles on the road by 2020…

8638198650_61c33ccf17_o Flickr Håkan Dahlström, https://creativecommons.org/licenses/by/2.0/

8638198650_61c33ccf17_o Flickr Håkan Dahlström, https://creativecommons.org/licenses/by/2.0/

Elon Musk is known as a visionary. As an engineer he firmly believes in innovation and entrepreneurship. Making transportation sustainable and powered by clean energy has been on his agenda for over a decade. While he did not invent the electric car – that honor goes to 19th century Scottish inventor Robert Anderson – Musk, in his role as product architect and CEO of Tesla, has certainly helped make e-mobility a reality while many European car makers were still experimenting. It wasn’t until Chancellor Angela Merkel announced in 2013 that she expected at least one million electric vehicles on German roads by 2020 that executives at Daimler, BMW, Volkswagen, and others started to up their game. Now, a recent study by Swiss bank UBS predicts that by 2030, 23 percent of newly registered vehicles will be electrically powered.
While German car makers have for decades been at the forefront of automotive technology, for a long time they seemed to resist the idea that electric motors might one day entirely replace combustion engines. Thus, the popularity of Japanese built hybrid and electric vehicles caught their attention but did little to speed up market entry. Instead German engineers continued to focus on the reduction of fuel consumption – with success. Only in 2012, did Mercedes begin mass production of the Smart Fortwo Electric Drive, the first German model to be available to the public.
But technology has continued to develop apace. Battery technology in particular has made great strides in recent years. Tesla’s new batteries, which cost less than €200 per kWh, will make it possible to utilize solar energy at a low cost, even at night. This development has been driven by a rapid reduction in costs. High-quality batteries produced on a large scale for electromobility can also be used in stationary systems for storing wind and solar energy. Battery performance, both during the day and overnight, will be a key factor in the rise in electromobility. In light of climate change, some countries have already announced ambitious programs. Norway and several US states, for example, have announced plans to eliminate new registrations of combustion-powered vehicles as early as 2030.

A tough sell

The question of e-mobility has thus become a pressing one for the German auto industry. Some years ago, German automakers began investing heavily in R&D, developing fuel cells and even hydrogen combustion engines alongside battery-powered e-mobility solutions. Daimler is said to be working on six electrically powered model lines.
But it’s still unclear where the market for e-mobility will be. Germany will likely fall far short of its ambitious goal of one million electrically powered vehicles by 2020, probably achieving only about 10 percent of that goal. Battery-driven vehicles are a tough sell in Germany. They are more expensive than gasoline and diesel vehicles, and they require recharging after only a few hundred kilometers. The network of quick-charging stations is still far from adequate. President of the German Automobile Industry Association (VDA) Matthias Wissmann says that currently only about 55,000 electric vehicles are registered for use in Germany. Wissmann believes that the purchase premium and tax benefits introduced in early July 2016 could serve as a spur to sales. But the charging infrastructure continues to pose an obstacle. Currently, Germany has only 7,407 regular charging points and 292 quick-charging stations. A federal investment of 300 million € could raise that figure to about 15,000 regular public charging stations and several thousand quick-charging ones. Wissmann also argues in favor of eliminating the hurdles to the establishment of private charging stations. Moreover, Ford, Daimler, BMW, and Volkswagen have announced plans to establish a quick-charge network along European highways. According to Wissmann, this demonstrates “how seriously German manufacturers are taking electromobility, and their determination to team up to tackle this joint project, along the lines of the Nokia Here purchase.”
Wissmann emphasizes that electromobility is an important force for Germany as a center of technology and industry. E-mobility will help pave the way for a further expansion of the high-tech and industrial sector in the country. Worldwide, some 34 percent of patents in the area of electromobility and 32 percent of patents in the area of hybrid drives come from Germany. After China, Germany is currently the second-largest producer of electric vehicles. According to Wissmann, McKinsey market analysts predict that within five years Germany will be the world’s largest producer of electric vehicles, with approximately 1.3 million such vehicles rolling off German production lines each year.
The purchase of data specialists Nokia Here by Audi, BMW, and Daimler shows that German carmakers are keen to maintain their technological edge, including against Silicon Valley heavyweights such as Google. In the early years, both Daimler and Toyota had looked to Tesla entrepreneur Elon Musk for ideas, but meanwhile they are pursuing their own strategies. Although Germany’s reputation in the technology sector has suffered somewhat of late, German engineers still have plenty to offer when it comes to e-mobility. Automotive supplier Continental, for example, has developed the first-ever system for wireless charging of electric cars and motorcycles. Volkswagen is aiming to become the global market leader in e-mobility, while BMW has promised that by 2020, e-vehicles will cost the same as combustion-powered models. Daimler is partnering with BAIC to take on the Chinese market.
But Henning Kagermann, chair Germany’s National Electro-mobility Platform and former co-chief of the German software giant SAP, remains disappointed by the pace of development. At a recent conference, Kagermann noted, “It would be better if things were moving more quickly.” For Kagermann, who commutes about 80 kilometers a day, an electric vehicle would be the perfect solution.
Thus far, however, range remains the thorniest issue. Here, too, Elon Musk is promising a “revolution.” Tesla is pinning its hopes on the battery powered Model Y crossover SUV, which is scheduled for a 2019 market release. Musk believes that the electro-SUV will prove even more popular on the mass market than current electric vehicles. The carmaker plans to produce 500,000 vehicles per year by 2018, with that figure set to rise to one million by 2020. But the company still has a long way to go. Last year, only around 84,000 vehicles rolled off the Tesla production lines. In the first quarter of this year, Tesla achieved new records in production, deliveries, and turnover, but the company still slid further into the red. ■


Klaus Dieter Oehler is financial editor
at the daily Stuttgarter Zeitung

Photo Credit: 8638198650_61c33ccf17_o Flickr Håkan Dahlström, https://creativecommons.org/licenses/by/2.0/

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