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German electric vehicles: from plans to action?

On May 3rd in Berlin the German government, along with multiple OEMs, suppliers, public agencies and other key parties formally put in place the National Platform for Electric Mobility (NPEM). In effect, the meeting in Berlin was intended to action the practical detail behind the 2009 German Development Plan for Electro-mobility, in which the target of 1 million electric vehicles by 2020 was established.

The NPEM makes clear that in the battle between battery EVs and fuel cell vehicles, it is the battery electric option that will gain the short-term attention. The bulk of the €500m already identified to support the introduction of EVs is intended for battery and infrastructure projects, bringing together multiple partners in academia, OEMs (all the German major OEMs are involved), electricity supply and battery and components makers into research consortia.

it might make sense to delay incentives until the domestic OEMs are ready, rather than give rival non-German OEMs a head start in the market

Yet two fundamental problems remain unresolved. First, the industry has lobbied hard for consumer subsidies for EV purchases along the lines of those offered by the UK, but the German government appears reluctant to commit to such subsidies. This may be a reflection of the deterioration in government finances generally, particularly given the prominent place occupied by Germany in financial support offered to Greece in an attempt to hold the Euro zone together - support that may have to be extended to other vulnerable Euro zone economies such as Portugal or Spain. There may also be more calculation here. For example, the German government may be waiting until the mass market has really taken hold before adjusting incentives and tax regimes to encourage further uptake.

Or there may be another agenda. The second unresolved problem is that compared with some key competitors the German OEMs appear a bit behind the pace in bringing EVs to market. While the R&D support offered by the government is valuable in the longer term for building vital knowledge and human resource capacity, in the short term the product gap is a concern. Hence, it might make sense to delay incentives until the domestic OEMs are ready, rather than give rival non-German OEMs a head start in the market.

All of which in turn leads to some doubts about the 1 million EVs target figure for 2020. At the very least, it would appear that the bulk of those EV registrations will occur towards the end of the time period. Of course, it is not always necessary to be a leader in this sense. Indeed, there is much to be said for a strategic second place, and allowing another country to experience the risks of pioneering mass EV adoption - but that is not the stated aim of the German government.

there is much to be said for a strategic second place, and allowing another country to experience the risks of pioneering mass EV adoption

In short, there is good evidence here of a transition from rhetoric to action, but it is rather less clear whether Germany GmbH has the speed or the flexibility to bring to market successfully the many innovations in technology, business and user behaviours necessary to make the NPEM deliver. Technology forcing is all very well, but the lack of market incentives is the key weakness in this plan.

Dr Peter Wells is a Reader at Cardiff Business School, where he is a Co-Director of the Centre for Automotive Industry Research and leads the automotive industry research programme within BRASS, also in Cardiff University. Dr Wells is also a director of AutomotiveWorld.com’s sister website AWPresenter.com. He can be contacted on wellspe@cardiff.ac.uk.

The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.