It might have been wise to take Günther Schuh seriously sooner.
In 2011 Mr. Schuh, a professor at the RWTH Aachen University, presented an idea he had developed with his students at the IAA in Frankfurt. It was a small electric car called the Streetscooter. Established manufacturers treated it with barely concealed derision. Many felt it was too Spartan and too makeshift. “They put us in the ‘youth research’ corner,” Mr. Schuh recalled. “I didn’t accept that.”
Today, the Streetscooter is the most successful electric delivery truck in Germany. Deutsche Post has taken over the Aachen company, and now wants to build tens of thousands of the vans at its own plant.
Günther Schuh talks about the project with some satisfaction. But the electric delivery vehicle was only the first step, he says.
The laboratory run by Mr. Schuh and his developers at the Aachen campus looks like a construction site. The team is working on the next surprise. The professor has launched a new car company with the money from the sale of Streetscooter: e.Go Mobile AG.
The idea is to develop an electric city car. With government subsidies, the e.Go Life, will have a price tag of just €12,000 ($13,400). The first cars are scheduled for delivery in mid-2018.
The vehicle breaks with many long-established industry rules. Compared to the competition, it has a limited range of just 100 and 130 kilometers (62 to 81 miles). With 22kW of power and a top speed of 100 kilometers per hour, the Life isn’t something you would drive on the Autobahn. It’s targeted at a niche market of customers who want a second car for the city. The lightweight car leaves most ordinary cars in the dust — at least for the first few meters.
Germans are just as interested in electric cars as drivers in other countries, Mr. Schuh insists. “But so far their interest has not been reflected in a willingness to pay more.” In other words, electric cars are just too expensive. And when it comes to price, no one can hold a candle to the e.Go Life.
Asked why there are no affordable electric cars on the market today, the large automakers generally give the same answers: Batteries are still too expensive, and production is unprofitable because consumers aren’t buying enough electric cars. An ordinary small car needs an annual production rate of about 100,000 to turn a profit.
“The fact that the established automakers need to search for high-volume products is a result of their structure,” Mr. Schuh said.
He and his team of developers are taking a different approach. They’ve tried to use components that don’t require large machines. Instead of using a self-supporting body, they installed an aluminum passenger cell in the e.Go Life, using Formula 1 race cars as a model. The small electric car’s shell isn’t made of painted sheet metal but thermoplastic resin.
“The car essentially doesn’t age,” Mr. Schuh said. And when components become scratched or the owner wants a change, they can simply be removed. “We will give our customers an annual update, and it will consist of more than just software,” Mr. Schuh said.
“We will give our customers an annual update, and it will consist of more than just software.”
The simple design means the Aachen team doesn’t need machines, which make car production expensive. There is no press shop and no paint shop. It only needs to sell 7,000 vehicles each year to reach the profit threshold, Mr. Schuh said. The group eventually hopes to produce up to 20,000 vehicles a year at its plant outside Aachen.
The Aachen group is planning to sell 1,000 cars in the first year. It already has already taken more than 500 pre-orders in just a few weeks. Mr. Schuh is already thinking about the next step. He wants to expand into four or five other European countries in 2018, and to work with licensees in Asia and North America in the medium term. “I’m past the researching and playing phase. We want to do this right,” he said.
The car was brought to series production in only 21 months, and with an investment of €30 million. The industry normally estimates a cost of at least €300 million for a complete new development.
Unlike car companies that work with highly specialized, and sometimes poorly interconnected teams, Mr. Schuh’s team applied the rules of Industry 4.0, which the professor preaches in his lectures: flat hierarchies and cooperation at all levels. “To put it in simple terms, it’s the ‘You can do it’ platform, because we have direct access to everything,” Mr. Schuh said.
When it comes too organizing their work, the professor and his team pay more attention to the structures of Silicon Valley software developers than the automakers’ large development departments. Mr. Schuh recruits his developers from the RWTH Aachen. The university’s machine tool laboratory is only a stone’s throw away from e.Go Mobile AG. The average age in his team is 29.
But Mr. Schuh doesn’t depend only on youthful zeal, but also on experience. He has also brought in seasoned developers from the industry, who argue with their young colleagues over the best ideas. “This friction creates the best solutions,” he said.
Mr. Schuh also brought suppliers on board, doing his best to involve them closely during the development phase. “There is no other place in the world with such a collection of engineering expertise as in Germany,” he said. Instead of entangling the suppliers in endless price negotiations, they were encouraged to contribute their own ideas early on. Some were quite surprised not to have received lengthy guidelines.
Bosch is one of the most important suppliers for the e.Go Life. The southwest German company supplies the electric engine, but it also uses its repair shop network to procure spare parts, provide service and even sell cars. The Aachen team recently formed a joint venture with ZF Friedrichshafen to build self-driving, electric minibuses.
Not everyone is convinced Mr. Schuh’s strategy will work. “The attempt to build inexpensive electric cars has already been made in the past,” said auto professor Ferdinand Dudenhöffer, head of the CAR Institute at the University of Duisburg-Essen. One of the results was the Mitsubishi i-Miev, which never really took off in Germany.
Mr. Schuh counters with his ambitious expansion plans. “At least we didn’t need any banks,” he said. While the funding for the Streetscooter had to be painstakingly scraped together, things were easier with the new project. Thanks to the sale of Streetscooter to Deutsche Post, he had enough equity, he explained.
Now the Aachen founders own 60 percent of the company. There are also strategic investors, though Mr. Schuh is unwilling to reveal their identities. According to Mr. Schuh, no single outside investor owns more than 15 percent of the company. “If we manage to provoke product management at the major automakers to pay attention to this segment and compete with us, it will speed up the spread of electric cars.”
Lukas Bay is an editor with Handelsblatt’s companies and markets desk. To contact the author: email@example.com