Automakers and energy companies in Germany have long played a game with each other when it comes to electric mobility, each waiting for the other to make the first move.
While the automakers complain there aren’t enough charging stations to support more electric cars, the energy companies counter there aren’t enough cars to support more charging stations. But Germany’s automakers have tired of the standoff and are forging ahead on their own.
Volkswagen has promised to invest billions in electric cars, aiming to sell up to 3 million by 2025. Daimler plans to create a new e-car subsidiary, and trailblazer BMW remains committed to the field despite disappointing sales for its i3, Germany’s first fully electric car.
“Currently, it's not profitable due to the electric fuel economy alone.”
The growing investment by the automobile industry can be seen on Germany’s roads, where the number of electric cars increased by 90 percent in 2015.
If the energy companies don’t make the next move, however, the transition away from gas and diesel engines could hit a serious bottleneck. The number of charging stations grew by only 5 percent last year.
“The expansion of charging infrastructure is a central issue in the view of the federal government,” a spokesperson for Germany’s Economics Ministry told Handelsblatt. “For electric mobility to catch on, charging and paying must be secure, transparent, compatible across providers and customer friendly.”
A road map drafted by the German National Platform for Electric Mobility has set a goal of increasing the number of charging stations to 70,000 by 2020 to support a million electric cars. As of 2015, there were only 5,800 charging stations for 50,000 electric cars.
Though 80 to 90 percent of drivers prefer to plug their e-cars in at home or at work, the demand for public charging stations will grow as electric cars are able to travel greater distances and become more common.
But for the major energy companies, expanding the number of charging stations in Germany still doesn’t make economic sense. A normal charging station costs between €7,000 and €10,000 and one with quick charge technology can cost up to €35,000.
It’s cheap for a driver, on other hand, to charge an electric car. Every 100 kilometers costs just €5 compared to €10 for a normal car. Though some charging stations are heavily frequented, others hardly see any traffic at all. Without state support, the energy companies would struggle to recoup their costs.
“Currently, it’s not profitable due to the electric fuel economy alone,” Norbert Verweyen, the head of electric mobility at the utility RWE, told Handelsblatt.
Despite this reality, RWE has made a significant investment in charging stations. The utility has installed 4,000 across Europe including 3,100 in Germany, half of all the stations in the country. Other electricity providers such as E.ON, EnBW and municipal utilities have barely contributed to the charging station network.
“The interest of consumers in electric mobility and their readiness to buy is larger than generally assumed. With the right products, the market will grow quickly.”
In effort to stimulate electric mobility, the German government has intervened by offering a €4,000 subsidy to consumers who buy electric cars and setting aside €300 million to build charging stations.
The Transportation Ministry told Handelsblatt that it plans to start distributing funds at the start of 2017. It has already agreed to equip 400 service stations owned by the company Autobahn Tank & Rast with charging stations and parking places for electric cars.
“If we make good progress here, then charging infrastructure will grow in accordance with the number of electric cars sold,” Henning Kagermann, chairman of the National Platform for Electric Mobility, told Handelsblatt.
But the money is still only enough for 15,000 charging stations because the government plans to install many of the more expensive quick-charge stations.
“The federal government has set good incentives, but it should follow with additional steps,” Mr. Verweyen said. Electric cars, for example, should be able to use dedicated bus lanes, he said.
And Germany doesn’t just need more charging stations, Mr. Verweyen added; it needs charging stations that are easy and comfortable for drivers to use.
While charging stations aren’t yet profitable, the energy companies still stand to benefit as electric cars drive up the overall demand for electricity.
An electric car consumes 2,500 kilowatt hours for every 15,000 kilometers traveled. That equals about 70 percent of the electricity used by a family of three every year, said Karsten Wildberger, a board member of the utility E.ON who is responsible for electric mobility.
“In addition to the increased demand for electricity, new business fields will also be created,” Mr. Wildberger told Handelsblatt. “The interest of consumers in electric mobility and their readiness to buy is larger than generally assumed. With the right products, the market will grow quickly.”
Energy companies, for example, are already selling chargers that can be plugged into rooftop solar panels. They are also offering companies package deals that include charging stations and the accompanying services.
The chemicals company BASF, for example, wants to create its own fleet of electric cars. And RWE has already installed charging stations in the parking lots of 50 Aldi grocery stores.
“The market has momentum,” Mr. Verweyen said.
Jürgen Flauger covers the energy market, including electricity and gas providers, international market developments and energy policy. Daniel Delhaes reports on politics, transport and airlines from the Berlin office. To contact the authors: email@example.com, firstname.lastname@example.org