Getting Around the Biggest Roadblock

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Powering up: A sign at a Dortmund gas station indicates that e-cars are welcome too. Source: DPA

Just over a year ago, four of the best-known car manufacturers in the world launched an ambitious, and much-needed, project in Munich. It had an unwieldy name: European High Power Charging Management.

It turned out that the project’s name was not the only thing that was unwieldy. A joint venture between auto industry giants Porsche, Daimler, BMW and Ford, the project was to facilitate the building of 400 rapid-charging stations for electric cars on the most important routes in Germany, something that is expected to cost several hundred million euros. That was in June last year.

Porsche has apparently been negotiating with companies who can build the stations and the company has also looked into real estate where the stations can be built. But it was only recently that BMW announced the first charging stations would be built. So why was it all taking so long?

The EU Commission says after 2025, office buildings will need to provide one charging station for every ten parking spots.

Apparently the slow start is due to European cartel regulations, the automakers said. But given that Germany, and Europeans in general, want to see many more e-cars on the road in the next five years, the fact that this particular project was left on the back burner for over 15 months seems slightly ridiculous.

The lack of charging stations has long been one of the biggest roadblocks for consumers contemplating a greener mode of transport. Just look at Norway. The Norwegian way with electric vehicles has become the stuff of e-mobility legend. Bolstered by generous government subsidies, exemptions from sales tax and other road-going favoritism, like free parking and permission to drive in bus lanes, around 40 percent of all new cars sold in Norway are now electric.

But there’s a problem. E-cars need to be charged. And unless drivers in places like Oslo can access their own private charging stations, they are now being advised to think twice about buying an e-car. There are 1,300 public charging stations for 80,000 electric cars in Norway and some say the northern nation is at the edge of what can be achieved with e-cars, without a lot more infrastructure.

The outlook for Germany is not much prettier. According to the German Association of Energy and Water Industries, which represents 1,800 local companies engaged in areas like natural gas, heat and water, there are only 11,000 charging stations in Germany, including 600 rapid-charging stations. In particular, the latter are needed by e-car drivers doing long trips – after all, nobody wants to sit at the side of the highway for several hours waiting for their car to charge.

Germany wants one million e-cars on the road by 2020 and BMW, Daimler and VW are reckoning with the idea that around one-quarter of all new cars sold will be electric by 2025. And the European Commission recently said, it wants to put further pressure on car manufacturers to devote resources to e-mobility, by setting even tougher rules on emissions.

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But if they want to keep the desired number of e-cars going in Germany, analysts suggest another 70,000 charging stations are needed, depending on types of car, kinds of charger and location.

This makes e-cars in Germany one of those tricky “chicken or egg” issues for consumers and corporates alike. Which should come first: The charging station or the e-car?

There are further complications. For one thing, there is no industry standard for charging e-cars. For example, electric-motoring pioneer Tesla made their own charging stations for their own cars. Other e-cars can’t charge there.

This is changing, albeit slowly. For example, the new generation of rapid-charging stations, like the Terra 53 CJC, now come with three different connections so that e-cars bearing any of the current standards – such as the CCS, Type 2 and CHAdeMO – can all be used there. Tesla drivers can charge there too but need to carry an adapter.

There are several billion-dollar industries in the making, when it comes to servicing e-mobility. One involves making the actual batteries on which the cars run. The EU Commission’s Maroš Šefčovič, who is responsible for Europe’s Energy Union, says Europeans must start making their own batteries so that they are no longer dependent on batteries made in Asia. The sector is too important to allow other countries to dominate it.

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This week Mr. Šefčovič invited around 40 companies and associations to Brussels to discuss this with a view to coming up with a plan by February next year, for making batteries in Europe. Although BMW, Daimler and VW all demurred, saying they didn’t want to start making their own batteries and would rather enter into long term contracts with Asian manufacturers, they sent senior staff and board members to the meeting anyway.

The other major industry-in-the-making involves building the charging stations. Charging station providers should also be able to take advantage of government subsidies. For example, for the aforementioned Porsche joint venture, candidates include power technology companies like ABB, Siemens and EnBW.

“By the end of this year we want to have built rapid-charging stations at 119 points along the highways,” EnBW head Frank Mastiaux says. “By 2020, we want 1,000 points nationwide.”

EnBW’s rival Vattenfall wants to build 800 public charging stations over the coming year; currently Innogy is the market leader.

The EU Commission has already said that after 2025, new or renovated office buildings will need to provide one charging station for every ten parking spots. New apartment buildings will have to build in the required cabling, in effect future proofing the building. Despite a potential €800 million in funding to facilitate this, some EU member states have criticized the new measures, saying they would add costs and possibly discourage building owners from making necessary upgrades.

All of which brings the charging station providers to the next problem: The impact on the national power grid. A study by the Stuttgart Technology University of Applied Sciences indicated that if the number of e-cars in Germany increased by 100 percent, the peak load on the power grid would increase by 200 percent. There are presently only around 45,000 e-cars on the road in Germany, out of 45 million registered vehicles.

“The challenge is to optimally prepare the distribution grid for electric mobility,” Stefan Kapferer, head of the German Association of Energy and Water Industries confirms.

Unlike the costs of the charging stations, the costs of this would be borne by all users of the power grid – that is, passed on to German consumers with the government setting the rates.

“The grid is not yet equipped for such peak loads,” agrees Mr. Mastiaux of EnBW. “We need to strengthen the grid with solid investment and intelligent technology, so that the required capacity is there – in private garages as well as at public charging stations.”

This presents yet another “chicken or egg” situation: Although digitizing the power grid could help ameliorate peak loading times, there is no point building charging stations if the power grid is not adequately prepared, as Mr. Kapferer argues.


Martin-Werner Buchenau reports from Stuttgart, Klaus Stratmann is a political correspondent for Handelsblatt based in Berlin, Axel Höpner is head of the Handelsblatt office in Munich and Till Hoppe reports on politics for Handelsblatt. This story was adapted for Handelsblatt Global. To contact the authors: hoepner@handelsblatt.com, hoppe@handelsblatt.com, buchenau@handelsblatt.com

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