The Minister for Economic Affairs was visibly pleased. “This July we will reach our target of one million electric cars on the roads by 2020, which everyone thought was impossible. That is only six months late,” said Peter Altmaier a few weeks ago in an interview with the German newspaper Tagesspiegel. Who would have thought it? For years, the government has been subject to ridicule over its target of one million electric cars. Hardly anyone seriously believed that the new powertrain technology would find enough buyers to allow the politicians to achieve their highly symbolic milestone.
Record subsidy applications
Then things suddenly started to move very quickly. Since mid-2020, there has been a dramatic rise in sales of electric vehicles in Germany, according to the Federal Ministry for Economic Affairs and Energy (BMWi). The decisive factor was the introduction by the government of the innovation bonus in July 2020, which doubled the state subsidy for the purchase of an electric car. “The number of applications is still at a record level,” says Altmaier. “In the first half of 2021, more bonuses were claimed than in the whole of last year, making a total of 1.25 billion euros.” This year a record amount will be paid out in subsidies for electric cars. The coalition government has decided to continue the subsidy scheme until the end of 2025 “to ensure that the electric car market gains further momentum.”
The financial incentives really are attractive. For electric cars with a net list price of less than 40,000 euros, buyers can apply for a subsidy of up to 9,000 euros. In the case of hybrids, the figure is 6,750 euros. Where the net list price is above 40,000 euros, the state will subsidize the purchase to the tune of up to 7,500 euros (for BEVs) and 5,625 euros (for hybrids). This is why one record month followed another in the second half of 2020. In December 2020, the application figures reached 53,566, a provisional high point. In March 2021, there were almost 52,000 applications. From January until the end of June 2021, buyers applied for subsidies for 273,614 cars. It’s no surprise that Altmaier hopes not only to achieve the next milestone but also to exceed it. This is a target of between seven and ten million electric cars on German roads by 2030.
Inadequate charging infrastructure
Alongside the financial incentives, the charging infrastructure also plays a key role in determining the attractiveness of electric cars. Away from the large cities and the freeways, the search for a charging station can be difficult and frustrating. In the first quarter of 2021, there were 47,076 charging points in Germany, which makes 1,014 cars (gasoline, diesel, and electric) for every charging station. The pace of expansion is relatively slow, and this is why the automotive industry among others is calling for greater commitment. The German Association of the Automotive Industry (VDA) has calculated that to achieve the goal of more than one million charging stations for electric cars in Germany by 2030, every week 2,000 new charging points would have to be built. Other countries have made much greater progress in this area. The Netherlands, Norway and Sweden head the European rankings for charging points per car, which is one of the reasons why there has been a boom in electric mobility in Norway for example.
Alongside the charging problem, the range is a concern for many potential electric car buyers. In a representative survey carried out on behalf of the German car sales platform mobile.de, around 58 percent of the people surveyed highlighted the range and 50 percent the value for money as important criteria. The time needed for charging and the charging infrastructure were mentioned by around 43 and 41 percent of the people respectively. For most of the respondents, a range of 500 kilometers was the lower limit, while almost a quarter wanted more than 800 kilometers. The experts believe that this is excessive. “In my view it makes no sense at all, but I understand people’s wishes,” says Professor Martin Doppelbauer, expert on hybrid and electric vehicles from the Karlsruhe Institute of Technology (KIT). “Many of them have no practical experience of electric cars. I have been driving electric vehicles for many years and, from my own perspective, I can say that no one needs a reliably available range of more than 300 kilometers.” Even people who frequently travel long distances on business can fully rely on an electric car.
Range will increase in the years to come
Anyone who really wants to make a long journey without stopping will find a suitable model on the market. The new EQS from Daimler, for example, has a range of 770 kilometers in the WLTP (Worldwide Harmonized Light Vehicle Test Procedure). In 2022, the Chinese manufacturer Nio is launching the ET7, which has a 150 kWh solid-state battery and a range of around 1,000 kilometers in the NEDC (New European Driving Cycle) (between 700 and 800 kilometers in the more realistic WLTP ).
Over the coming years, customers will also benefit from developments in the world of batteries. “At the moment batteries can store around 250 watt hours of energy per kilogram on a cell level,” explains Doppelbauer. “The manufacturers’ roadmaps indicate that this will increase to 350 watt hours per kilogram in the coming years as a result of improvements in the current technologies. This will be followed by a major leap forward in the form of solid-state lithium-ion batteries, which should make a figure of 500 watt hours per cell kilogram a possibility.” This would be the equivalent of doubling the existing range or halving the size and weight of the battery while keeping the range unchanged.
However, we cannot expect any leaps forward in the charging times. Already recharging a 400 volt battery at a 150 kilowatt charging point does not take much longer than you would spend having a cup of coffee and a slice of cake at a rest stop. In the future, there will be more and more 800 volt systems on the market that will allow for a maximum charging power of 350 kilowatts, which will make the process even faster.
Hydrogen road vehicles abandoned?
Despite all the technical advances in the field of electric mobility, alternatives such as fuel cell vehicles or synthetic fuels are still under discussion. Doppelbauer sees no need for them. “What do we want these things for? Definitely not on account of the range, because electric cars can cover a longer distance than fuel cell vehicles. The performance and the cost do not look promising either. The other major problem is space. The hydrogen tank and the system for the fuel cell powertrain take up a huge amount of room and leave hardly any available for the trunk, for example.” In addition, there is unlikely to be any significant technological progress on fuel cell vehicles. “They have been around since 1955 and the technology has been almost fully exploited. By contrast, lithium-ion batteries have only been used in vehicles since 2000 and there is still a great deal of progress to be made in this area,” said Doppelbauer.
However, some manufacturers are still committed to the alternatives, for example Toyota, which is currently celebrating the Hydrogen Olympics in Tokyo. Many of its competitors, such as Mercedes, Volkswagen, and BMW, are in the process of abandoning hydrogen-powered cars after working on them for many years. They never moved on from small-scale production of models such as the Mercedes GLC F-Cell and the BMW 7 Series Hydrogen 7 and now the projects seem to have come to an end.
That is at least the case with cars, but many commercial vehicle manufacturers still see hydrogen as an attractive alternative. For example, Renault is working with the US fuel cell specialist Plug Power on two hydrogen van models. Daimler is cooperating with Volvo on the development of long-haul fuel cell trucks. MAN is also involved with hydrogen trucks and aims to trial the first prototypes on the test track during the summer of 2021. “But the hydrogen system in a truck is so complex and so big that it is difficult to distribute the load between the axles,” explains Doppelbauer. “It’s gradually becoming clear that hydrogen may not be a sensible solution here either.” Hydrogen is only essential for use in locomotives, ships, and aircraft. It is also definitely required in industry, for example for the production of steel and cement. “And we need hydrogen as a storage medium for renewable energy, when it is produced and consumed in different places,” says Doppelbauer.
Tesla’s Chinese competitors reach Europe
So manufacturers of BEVs really do not need to worry about hydrogen-powered cars, but the established brands could be facing increasing competition from new players over the next few years. In the case of electric cars, decades of experience with combustion engines is not necessarily useful and this leaves the way free for young companies with fresh ideas. They have not had a presence in Europe so far, but now the first Chinese manufacturers such as Nio, XPENG, SAIC, and Geely are making their way onto the market here.
Some models are already available to buy in Europe, particularly in the far north. The Nio ES8 electric SUV will be in the showrooms in Norway from September, and this will be followed by the Nio ET7 next year. The XPENG G3 has been on sale in Norway since December 2020. SAIC by contrast is gaining a foothold in Europe via its subsidiary MG. This historic British brand is selling the MG ZS EV electric SUV in Austria, Norway, Germany, and the Netherlands. Geely owns the two Scandinavian manufacturers Volvo and Polestar, which gives it an indirect presence on the European market. Customers are likely to benefit as a result of the increasing competition from the Far East. The established manufacturers, on the other hand, will need to come up with some good ideas if they are not to fall by the wayside.