Carrots and sticks

Electric Cars Need a Push

Show some love for E-cars. Source BMW
Show some support for e-cars. Source BMW
  • Why it matters

    Why it matters

    To meet its ambitious goals of having 1 million electric cars on the road by 2020, Germany will need to consider incentives for drivers, or penalties for those who want to keep driving their combustion engines.

  • Facts

    Facts

    • The lack of charging stations for electric cars is a major hurdle for buyers.
    • One proposal is to designate traffic lanes for the cars in cities.
    • By 2020, carmakers are required to reduce their average fleet emissions to 95 grams of carbon dioxide per 100 kilometers.
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  • Audio

    Audio

  • Pdf

As if things weren’t difficult enough for electric cars in Germany, the price of gas and diesel is nearing the €1 ($1.22) mark. And the lower fuel prices fall, the less likely Germans will buy an electric car.

Electric vehicles are still a rare sight on the country’s roads. Only about 24,000 of them have been sold so far. Even a small country such as Norway has more. But there, unlike Germany, electric cars are heavily subsidized.

That could change.

At a recent industry event near Cologne, the Center for Automotive Research, CAR, at the University of Duisburg-Essen, called for a surcharge of one euro cent on every liter of gas and diesel sold over the next three years. The levy would total about €1.9 billion in three years.

The market research insitute proposed earmarking around €800 million of that money for sales incentives, including subsidies of €4,000 per vehicle. The subsidies, it estimates, could lead to as many as 200,000 more electric-car sales.

“We have to make customers enthusiastic about the electric car. That doesn’t work by penalizing motorists.”

Dieter Zetsche, CEO, Daimler-Benz

Those additional numbers, however, would still be well below the political goal of having 1 million electric cars on the road by 2020. As a further boost, CAR suggested spending an additional €200 million on car-sharing concepts.

To dispel buyers’ fears of an empty battery, the auto institute has called for greatly expanding the number electric car charging charging stations. Only about 3,000 charging stations exist today in the whole of Germany.

CAR, which recently submitted a proposal for making electric cars more attractive to buyers, estimates that about €850 million would be needed to build about 80,000 new stations in Germany’s 60 biggest urban centers. As part of its proposal, electric car owners would be able to park and charge their battery at these stations free of charge for three years. After that period, the stations would have to be run by local operators.

Manufacturers are open-minded about the proposals. “We can’t wait, we have to do something now,” said Thomas Hausch, the head of Nissan in Germany.

Dieter Zetsche, the chief executive of Daimler-Benz, said he wanted to take a “serious look” at the concept. But he warned about increasing the financial burden motorists already have.

“ No manufacturer in the world is currently earning money with electric cars.”

Dieter Zetsche, CEO, Daimler Benz

“We have to make customers enthusiastic about the electric car,” said  Mr. Zetsche, who is not a fan of higher taxation for conventional motors. “Penalizing motorists doesn’t.”

Bernhard Mattes, the boss of Ford in Germany, called for a broader solution: “We have to think on a European scale, and that applies to promotion schemes, too,” he said.

Car manufacturers in Gemany and across Europe are to increase sales of electric cars, to satisfy new emission levels, among other reasons. By 2020, they are required to reduce their fleet average to 95 grams of carbon dioxide per 100 kilometers. But for that to happen, the share of electric and hybrid models will have to increase considerably.

“No premium manufacturer can achieve the 95 gram targets with combustion engines alone, no matter how much expensive technology they use,” Mr. Zetsche said.

Daimler-Benz and BMW are moving to a plug-in hybrid, a drive system that uses both an electric and a gas-fuelled engine.

But the new models are still not profitable. “No manufacturer in the world is currently earning money with electric cars,” Mr. Zetsche said.

 

Lukas Bay is a reporter for the Handelsblatt companies and markets desk. To contact the author: bay@handelsblatt.com.

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