E-Car Industry

Stuck in Neutral

Credit: DPA
Unanswered questions about Germany's e-car market have consumers waiting to buy.
  • Why it matters

    Why it matters

    Chancellor Angela Merkel says she wants 1 million electric vehicles rolling on German roads by 2020, but many doubt this can be achieved.

  • Facts


    • In the wake of VW’s emissions-rigging scandal, Berlin has proposed more support for electric and natural gas vehicles.
    • German automakers already produce electric cars, but their batteries come from Asia.
    • Worried about the future of domestic jobs, labor unions want carmakers to team up and develop their own batteries.
  • Audio


  • Pdf

When 150 heads of state and government come together to discuss the world’s climate, the pictures, at the very least, are impressive.

At the United Nations climate change conference taking place in Paris right now, it’s all about finding the right course of action for climate policy. And one of the questions officials will be asking is what is what the transportation industry and automakers are doing to contribute.

That’s why anyone looking at the images of the convening chiefs of state should do so along with photos of Beijing smothered in smog caused by its factories and traffic. Mobility is a basic need, and when prosperity rises, people the world over like to satisfy it by driving cars. Customers in China, for example, love big, fast cars even more than consumers in Germany do.

But for some time now, premium carmakers have faced a big problem. For years, they have relied on gasoline and diesel engines. Electric-powered vehicles just weren’t part of the concept. And why should they be? After all, the carmakers owe their record profits to German engineering and not to battery cells from Samsung or Panasonic, which are produced in Asia.

Germany is supposed to become a top e-car market and German producers the top suppliers.

So it’s no wonder that BMW, Daimler, Volkswagen and other auto manufacturers still don’t believe in e-mobility as a big seller. Instead, the automakers are calling for sales subsidies from the government.

Meanwhile, it was German Chancellor Angela Merkel who was dubbed the climate chancellor for proclaiming in 2010 that Germany aimed to have 1 million electric-powered vehicles on its roads by 2020. The country is supposed to become a top e-car market, and German producers the top suppliers.

Since Merkel’s announcement, a concerted campaign on the German government’s National Electric Mobility Platform (NPE) has been paving the electric-car road with research and development, training, initial models – and incentives to compensate for the high price of batteries.

The call for subsidies can very well be justified by taking a look abroad, where countries such as Denmark, Japan and the United States support the purchase of electric cars by up to a third of the sales price and thereby create markets. The markets might be small, but not from a German perspective. And the German government has an interest in providing subsidies if it expects its objectives to be achieved.

Still, German carmakers won’t voluntarily surrender any of their record profits. When in doubt, they sell their electric cars in countries that promote the purchases. In the U.S., every fifth electric car comes from Germany, and in Europe the market share is 43 percent.

Globally, BMW and Daimler continue to earn money from their diesel vehicles despite the ever-widening emissions-rigging scandal at Volkswagen. The automakers see the electric car as a vague threat that will only emerge far in the future.

But if the price of oil were to rise, or if the Germans were to produce batteries themselves, or if electricity were to come from completely “clean” sources, then the carmakers would probably push e-cars with a passion.

Given the competing interests, how is this all supposed to work out successfully? The regulatory system has apparently failed, as the emissions-manipulation scandal at Volkswagen has shown. When it comes to climate protection, lawmakers must establish guidelines. But they shouldn’t involve less freedom or reward the purchase of an electric car. No, it’s eco-driving that should be rewarded, and it’s best achieved through a petroleum tax.

Moreover, the government should clear up supposedly unimportant questions, such as why workers who fill up their vehicles with electricity at their workplaces have to pay taxes on the power source as a non-cash benefit. A small detail, certainly, but a stumbling block nonetheless. And why hasn’t a public procurement program for environmentally friendly cars been set up, or fleet operators obligated to have a certain percentage of hybrid vehicles?

If such decisions aren’t made, then the potential e-car buyer would rather just wait. After all, a tax subsidy could be beckoning soon enough. But the government’s hesitation is illustrated by extremely low sales figures for electric cars.

Merkel is going to have to come clean about just how she plans to reach the 1-million goal.


To contact the author: delhaes@handelsblatt.com

We hope you enjoyed this article

Make sure to sign up for our free newsletters too!