Electric cars

The Quota Question

Aral Jahrespressegespräch
E-car quotas? Maybe, baby! Source: DPA

Earlier this week, there was suggestion that Brussels may force the auto industry to sell more low-emission vehicles by imposing minimum targets by 2025. The European Union acknowledged it is considering ways to encourage drivers to buy e-cars, but denied it is considering a quota. The reports of such a proposal divided carmakers and lawmakers – but how far would such a step make sense anyway? Two correspondents weigh the benefits and problems of nudging people towards greener decision-making behind the wheel.

 

Consumers still have doubts about electric cars but a quota would speed up the transition, argues Stefan Menzel

Diesel is fast losing popularity and the number of diesel cars that are registered is expected to continue declining in the coming years. Automakers are instead entering the electric age. Mercedes will start making a series of electric cars in 2019, and Volkswagen will follow the year after. But consumers still have major doubts about e-vehicles. Many buyers still shy away from buying electric cars because of the limits of the auto’s battery range, or limited charging infrastructure. Plus, the cars cost a lot.

Germany’s car industry is in the midst of a transformation. The age of the combustion engine isn’t over and the era of the electric car hasn’t quite begun. In this transition, a quota for electric vehicles is the right tool to help battery-driven cars make a breakthrough.

A legally binding quota would convince car buyers that the switch to electric is real and around the corner. A quota would make consumers realize that it isn’t just auto manufacturers who are promising electric cars, but that the government also wants the change and is pushing carmakers forward.

That extra pressure would help. In the past, carmakers relied too heavily on diesel; they saw the diesel motor as a panacea. Unfortunately, Volkswagen and other German manufacturers thus forgot there are other, more environmentally-friendly ways to power vehicles. It took newcomers such as Tesla to jolt complacent German manufacturers from their lethargy.

If it’s implemented correctly, the car industry would see the quota as a means of support rather than a problem. The quota would ideally be introduced gradually, and likewise gradually increased year by year.

During the transition period, carmakers should also be allowed to count hybrid models towards the quota; eventually, this stage would be set aside so the quota would only apply to wholly battery-driven cars. At present, we still need hybrids, but the electric age is clearly dawning.

Such a gradual approach would suit all carmakers – they already set their own targets for electric cars – a quota only supports what the industry is already doing.

Quotas and bans are inadequate tools that would be more appropriate in China's planned economy than in Germany.

Consumers need to be persuaded to buy e-cars. Imposing a quota won’t solve the industry’s problems, writes Lukas Bay.

It only took a few years for the smartphone to oust regular phones; market leader Nokia disappeared and Apple and Samsung took over. E-car advocates use this example to prove how a sleepy industry missed the boat and was replaced. E-cars will replace vehicles with combustion engines this way too, they say.

Smartphones triumphed without government support; no bans were needed on keyboards, no smartphone quotas, or buyer’s premium. Smartphone managed on their own, a persuasive product that came out at the right time.

Electric cars aren’t at that stage yet. For several reasons, e-vehicles don’t have the highest numbers in German auto registration statistics. They included limited battery ranges and the fact that not everyone lives near to a charging station. Still others say the models are simply too expensive.

Lawmakers fell asleep at the wheel when it came to expanding the charging infrastructure. What good are e-cars pushed into the market through a quota if you can’t charge them?

A German quota would not speed up production; carmakers have been thinking globally for a while. There are only two scenarios when it comes to electric cars: Either the cars that go onto the market in the next few years are good enough that people want to buy them, or they aren’t ready, in which case a quota will achieve nothing.

Some proponents of electric mobility might argue that when it comes to electric cars, protecting the environment is more important than consumer tastes.

But there is no proof that electric cars are even the most environmentally friendly option in a country like Germany, where coal is still used to generate a large share of electricity.

Even if electric vehicles are the cleanest, there are better, more market-based methods to promote the switch to supposedly environmentally friendly car models. The government could adjust its tax on vehicles to better reflect emissions levels, depriving older, polluting cars of their price advantage. That would also stop the car industry from depending on one technology.

Quotas and bans are inadequate tools more appropriate in China’s planned economy than in Germany. It’s ultimately engineers—not lawmakers—who shape whether -cars succeed. Technology you can believe in doesn’t need quotas.

 

To reach the authors: menzel@handelsblatt.com, bay@handelsblatt.com.

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