The Electrification of the German Car Industry
Germany will most likely miss the target of having 1 million electric vehicles on the road by 2020. It is expected that there will be a delay of two years to this ambitious policy. “Considering the current market dynamics, the 1 million target will likely shift to 2022.” Germany has been facing the same problems most EU countries face when making the decision to move to the electric car world. The cost, limited driving range and the lack of charging points are all areas of massive concern for consumers. This is why the German government, which is reportedly considering extending its €4,000 subsidy for buyers of electric cars, is urging manufacturers to step up their efforts.
Start-ups in Germany have in the last number of years grown rapidly due to the sluggish transition by the larger car manufacturers. Seeing the gap in the market, the traditional car companies have decided to step into the world of electric vehicles. Volkswagen says it will invest €44 billion to develop electric cars; it aims to be making 3 million electric vehicles a year across all its brands by 2025. BMW recently announced it would invest €200 million to expand a Munich electric car factory, while also spending €4 billion on batteries. Daimler is spending €1 billion globally on battery production.
“We certainly had a delayed start (to the electric vehicle sector), but now we are catching up,” Germany’s Transport Minister Andreas Scheuer said. For Europe to take control of the electric vehicle market, battery cells are a key battleground. Economy Minister Peter Altmaier said that “ in a few years, Europe will have a competitive battery cell sector that can survive without state aid.” Germany is asking carmakers to group together to set up production of solid state battery cells in the country to compete with Asian rivals.