For years, the German auto industry seemed happy to leave development of the electric car to established Asian manufacturers such as Nissan and Toyota, and to US upstart Tesla. At the time, German carmakers were in love with diesel. But now, thanks to the Dieselgate scandal and ongoing discussions about diesel bans in more than 40 German cities, electric cars are suddenly looking a lot more attractive. The result: Germans are mounting an e-car offensive, with dozens of new models set for serial production by 2025.
Despite all the hoopla, there are serious obstacles to overcome on the road to fully electric traffic: Here, seven uncomfortable truths for Germany to deal with en route to more climate-friendly mobility.
“Our electric grid isn’t prepared for an electric vehicle boom.”
Electric cars are only as environmentally fit as their power source.
BMW calls its i3 electric cars “completely sustainable” and “free of emissions.” The truth is, an electric car is only as good as the source of its juice. “The better the electricity mix, the more sensible it is to drive an electric car from an ecological perspective,” says Hermann-Josef Wagner, energy economist at the Ruhr University Bochum. “In countries like China, where electricity is mainly produced with inefficient coal-fired power plants, electric cars make no ecological sense.”
“More than 70 percent of all auto markets use dirty power,” adds Klaus Schmitz, an auto industry expert at consultancy Arthur D. Little. In fact, the emissions produced by coal power plants are much dirtier than diesel motor fumes.
In Germany, almost one-third of the country’s electricity is green, produced by wind turbines and solar cells. But at the same time, more than 40 percent of the power mix comes from burning coal. That means that an electric car in Germany still produces 107 grams of CO2 per kilometer. The EU’s emissions target is 95 grams.
Compare that to countries like Switzerland or Norway, where much of their electricity is hydropowered. There it makes more sense to run electric cars, says Christian Hochfeld, director of Agora Verkehrswende, the Berlin-based think tank. “Without a transformation in traffic, there will be no energy transformation,” Mr. Hochfeld argues. “And vice versa.”
The more electric cars, the bigger the power grid.
“Our electricity grid isn’t prepared for an electric vehicle boom at all,” says Detlef Schulz, professor of electrical energy systems at Helmut Schmidt University in Hamburg. There are two main points to consider: Does the grid produce enough power? And will it suffer when all the electric cars in town plug in at the same time?
If all 45.8 million cars in Germany were plugged in at the same time, the country’s electricity demand could be theoretically increased by more than a quarter. But what’s more critical are the higher peak loads. Experts estimate that to power up a million e-cars, Germany needs 70,000 ordinary charging stations and 7,ooo additional faster-charging ones. At the end of 2016, there were only around 7,000 normal charging stations and 292 for speedy charging.
“In order to prevent our electricity grids from collapsing from several million electric cars in Germany, we’d need intelligent load management, which allows for time-delayed charging,” said energy expert Mr. Schulz. A lot of electricity will be needed over a short period of time for quick recharging, but current power lines are not designed for this.
The answers include things like digitalizing the grid to better distribute power and giving energy customers a bonus for charging at times when demand is lower.
Battery technology is only just starting out.
Today, a vehicle’s battery accounts for about 40 percent of the value of an electric car. Whoever leads in battery technology has a competitive advantage in the electromobility market. Roland Berger, the business consultancy, estimates that the price for one kilowatt hour of battery capacity will drop from €200 to €100 by 2020. Which means the price of a typical electric car battery with 60 kilowatt hours would drop from €12,000 to €6,000 – making electric cars significantly more competitive.
Loooking ahead, the price of one kilowatt hour could even fall below €100 by 2030, according to experts at the Fraunhofer Institute for Systems and Innovation Research. They also predict the energy density of batteries will double by 2030. All of this would make electromobility increasingly attractive.
However, it’s important to note that battery development is in its infancy. It’s light years behind microchips, where performance has multiplied exponentially and prices have declined at a similar rate. For that to happen with batteries, a whole new type of technology would be needed. That’s something the Fraunhofer experts don’t see happening until 2030 at the earliest.
Electric cars are only competitive thanks to state regulation.
One would think, given the number of new electric cars planned by German car manufacturers, that there’s no longer any doubt that e-cars are a competitive product. After all why else would the development departments invest billions in such vehicles?
In truth, German carmakers aren’t only out to fulfill demand for electric cars. They also need to comply with federal and EU regulations and escape high punitive payments. Often consumers aren’t responsible for growing demand. Politicians are.
The EU Commission wants car manufacturers to reduce average CO2 emissions for their vehicles to 95 grams per kilometer by 2021. That would mean a consumption of about four liters of gasoline, or 3.5 liters of diesel per 100 kilometers (1 gallon of unleaded fuel per 62 miles).
Engineers have exhausted their efficiency options with gasoline and diesel engines. They are the physical limits. In the case of Volkswagen, the Dieselgate scandal shows that they even turned to manipulating the system to circumvent regulations.
Automakers are only too well aware, however, that cars with really clean CO2 emission counts (less than 50 grams) are to be given extra “super credits”. This means German premium manufacturers can offset their relatively thirsty off-road vehicles with the help of plug-in hybrids and electric cars.
Electric cars aren’t suitable for everything.
The maximum range of electric cars due to appear on the market in the coming years is expected to be around 500 kilometers (310 miles), though a range of 400 km is probably more realistic. A diesel engine could do double that. For a drive from Munich to Berlin – about 600 kilometers (373 miles) – an electric car would have to recharge at least once.
Additionally, electric cars’ range is often calculated at an average speed of between 100 and 120 kilometers per hour. However, drivers on German highways move at more like 160 kilometers per hour. And that, as Tesla drivers have reported, reduces range to about 200 kilometers. That means several stops on the way to Munich, and drivers taking a gamble on whether they find a quick-charging station at the next stop.
The auto industry has tried to resolve this by developing hybrid cars and hydro-powered fuel cells. But carmakers estimate that a really useful and affordable example of the latter won’t emerge until 2025. So for the time being, it seems e-cars are limited to big cities.
Electric cars won’t save the auto industry’s current business model.
Wherever the driving distances are short and traffic is heavy, electric is the way to go. But most people use their cars to meet a range of needs. The same car is used to commute to the office and then packed full of suitcases for a family road trip. Carmakers have been making and selling cars on that basis for years.
But the mobility of the future could look a little different. We might not own a car anymore, but we’ll have an account with a car-sharing company and its fleet. If we move house, we’ll hire a van from them. Off on a skiing holiday, we’ll take one of their SUVs.
“Many customers will no longer own cars, just use them,” predicted Thomas Frey, the American futurist.
As a result, the business model of e-cars doesn’t translate to the current practice of counting vehicle sales. Car-sharing will change everything about the car business, whether it’s about electric cars or not.
Even with electric cars, we will have to limit our travel.
Some architects and city planners believe that in an ideal city, people should walk or ride a bicycle, because public space in cities is just too valuable to waste on cars.
A car traveling at 50 kph (31 miles per hour) occupies an area of 140 square meters, including safety clearance. A pedestrian takes up less than one square meter. And obviously the space a car takes up doesn’t decrease just because it is electric.
On top of that, only a drastic reduction in traffic will give renewable energy a chance of meeting the energy requirements of the transport sector. Trains continue to be able to transport people and goods far more efficiently than cars or trucks.
Ultimately, there is a simple hierarchy of efficiency that electric mobility doesn’t change. The most environmentally-friendly forms of transportation are, in ascending order: Train, bus, bicycle, and walking. Or staying at home.
Handelsblatt staff Lukas Bay, Markus Fasse, Astrid Dörner, Franz Hubik and Christian Rickens prepared this story, which was adapted in English for Handelsblatt Global. To contact the authors: firstname.lastname@example.org