News Analysis: How Germany is waking up to electric mobility

by Ushana Uthayathasan and Stephanie Wolff

BERLIN, March 18 (Xinhua) -- For a long time, it looked like Germany was simply watching Tesla, Toyota and BYD take the lead in electric mobility, stubbornly sticking to the combustion engines that German engineers had developed and perfected over the past century.

By the beginning of 2019, the number of electric cars worldwide had risen to 5.6 million, which marked a huge increase of 64 percent compared to the previous year. Less than 200,000 electric and plug-in hybrid cars were registered in Germany in 2018, according to figures from the General German Automobile Club (ADAC).

In an international comparison, the German government's target of around 1 million electric vehicles on German roads by 2020 does not seem very ambitious, as this would mean only a 2 percent share of the current 57 million vehicles registered in Germany. China has set itself a target to increase the share of electric cars to 12 percent from 2020 onwards.

One of the reasons that Germany has not been able to compete with the changing global car industry was that "German carmakers had placed too much emphasis on diesel technology", said Ferdinand Dudenhoeffer, the founder and director of the Center for Automotive Research at the university Duisburg Essen in an interview with Xinhua.

The over-reliance on diesel technology was shown to be a major obstacle for the German car industry by the Dieselgate affair, according to Dudenhoeffer.

In 2015, it was revealed that Germany's well-known car maker Volkswagen had sold 2.6 million cars in Germany with manipulated engine software that showed artificially low exhaust emissions. "Diesel has no future in passenger cars. That is why everyone is now heavily betting on electric cars," added Dudenhoefer.

Now it seems like that Germany is waking up to electric mobility. Volkswagen is planning to invest more than 30 billion euros in electric mobility over the next three years and announced it would increase the share of electric vehicles to "at least 40 percent" of its fleet by 2030. In the next 10 years, Volkswagen is aiming to produce 22 million electric cars.

"High quality standards of German automobile manufacturers also mean that they do not play the role of first movers in such important development steps. Only technically mature products are offered," said Stefan Reindl, CEO of the institute for the automotive industry (ifa), in an interview with Xinhua.

In the next two years "all German car manufacturers" will offer a large number of "attractive" electric vehicles, according to Reindl. Many German carmakers have recently announced purely electric models such as the Volkswagen ID series or Daimler's EQ brand. Audi presented its first fully electric SUV e-tron, and Porsche is currently planning a purely electric sports car called Taycan.

At the same time, however, "the sale of electric vehicles has so far been economically unattractive", said Reindl. German car manufacturers have struggled to achieve "an attractive cost performance ratio for electric cars on the customer side in combination with business attractiveness on the supplier side".

One of the main reasons for the high costs is that German car makers did not invest in producing their own batteries and are therefore dependent on Asian suppliers. In Germany, "there has so far been a lack of know-how and access to the raw materials manganese, lithium, cobalt, and the infrastructure for production", Reindl added.

To change that, German Economics Minister Peter Altmaier has made 1 billion euros available to support the construction of a battery cell factory in Germany, and production of cells is scheduled to start in 2021 as Germany and Europe are seeking to account for up to 30 percent of global battery production by 2030.

"I am sure that the German carmakers with their major electric offensive will be able to hold their own in the electric car market in the future," Ferdinand Dudenhoeffer sums up the recent developments.