Electric Cars Merkel's E-car Plan Needs Turbocharge

Germany’s plan to put one million electric cars on the roads appears increasingly unrealistic, risking the country’s climate goals and its carmakers' ability to meet E.U. emissions regulations.
So how can I sell another 975,000 of these?

Four years ago, German Chancellor Angela Merkel, standing alongside representatives of the nation’s automobile industry, confidently predicted that Germany would soon become the world’s largest market for electric cars, and that German carmakers would be the world’s “leading suppliers.”

Ms. Merkel may want to correct her prediction.

Of the 100,000 electric electric vehicles projected to be on the roads today, only 24,000 have made it, according to a progress report from the National Platform for Electric Mobility, NPE. Handelsblatt has obtained a copy of the report, to be presented to the chancellor on December 2.

The numbers make the German government's target of having one million electric cars on the road by 2020 look increasingly utopian.

They are also a source of growing concern, because the plan is a central part of Germany's effort to battle climate change.

E.U. laws require the transportation sectors of member countries, including Germany, to reduce CO2 emissions by 40 percent by 2050. New cars may only emit an average of 95 grams of CO2 per kilometer by 2021. Daimler, BMW and Audi currently have averages above 130 grams.

So far, foreign providers such as Samsung or Panasonic have supplied the batteries, which has called into question the knock-on effects for the German auto industry

“Without electric mobility, the guidelines cannot be achieved,” said BMW chief executive Norbert Reithofer.

But the nascent technology still faces numerous challenges.

The battery, a core component of electric cars, constitutes about 40 percent of their cost, and research on new, higher-performance types is making little progress. Daimler recently announced its decision to close its battery cell factory, the only one in Germany.

Many components are not standardized, and there is still no uniform payment systems at charging stations, not to mention enough stations. According to the NPE report, Germany will need to invest €550 million ($684 million) in charging infrastructure to meet its goal of one million electric cars.

Perhaps the biggest problem of all is the high price of electric cars. While countries such as the United States, China and France offer attractive tax incentives to consumers and businesses, Germany so far has only approved a tax break for company car fleets.

But pressure to act is mounting.

“We need to push harder,” said Andreas Jung, in charge of climate protection for the parliamentary group of Mrs. Merkel’s conservatives.

 

Electric Vehicles - Market Share & Government Incentives-01

 

Mr. Jung is calling for tax incentives for a broader base of users. If only wealthy environmentalists buy electric cars, he said, Germany will not reach its goals.

Electric cars could be a viable alternative to conventional combustion vehicles, according to the NPE report, which notes that Germans drive on average only 22 kilometers per day. The range of an electric car "would be sufficient for 90 percent of all planned trips,” the NPE report said, but added incentives are needed to create demand.

The German government plans to give electric cars preferential parking places and allow them to use bus lanes, if communities allow it. That could help.

“Our contribution to electric mobility is that we are building up the number of charging stations to 600 by 2016,” said Hamburg Mayor Olaf Scholz. “The city is also buying electric cars.”

In a report, German Economics Minister Sigmar Gabriel also called for boosting public procurement to “increase the visibility of the low-emission cars.”

 

 

 

Daniel Delhaes is a Berlin correspondent and Markus Fasse covers the auto industry for Handelsblatt. To contact the authors: [email protected] and [email protected]