EXPRESS #2 - December 20, 2018
The EU has agreed to cut carbon emissions from cars by 37.5 percent in a decade. The agreement comes after much opposition from vehicle-producing countries. Germany, with the EU’s biggest auto sector worth over €400bn and home to Volkswagen, Daimler and Mercedes, had warned that tough targets and an unrealistic drive towards more electric cars could harm its industry and cost jobs.
The compromise agreement sets targets for cutting emissions from cars by 37.5 percent and vans by 31 percent by 2030 compared with 2021. There was also agreement on an interim target of a 15 percent cut for both cars and vans by 2025.
“This is an important signal in our fight against climate change,” said Austria’s Sustainability Minister Elisabeth Koestinger. Austria currently holds the presidency of the Council of the EU.
But Brussels-based green lobbying group Transport & Environment said the targets were not high enough. “Europe is shifting up a gear in the race to produce zero emission cars. The new law means by 2030 around a third of new cars will be electric or hydrogen-powered,” its clean vehicles director Greg Archer said. “That’s progress, but it’s not fast enough to hit our climate goals.”
German carmakers led the opposition
German carmakers opposed the new 2030 target, calling it restrictive and unrealistic. “The regulation demands too much while promoting too little,” said the German Association of the Automotive Industry (VDA). The VDA also warned that it would damage Europe’s standing in the international car market and endanger jobs.
The 2030 target will apply across each car manufacturers’ fleets, rather than individual vehicles: high-emission models can therefore be offset with sales of low-emission or zero-emission vehicles, such as battery-run cars. That means the sales of clean vehicles will have to rise sharply, as compared to diesel- and petrol-powered cars. Can it be done fast enough?
EVs have a very steep hill to climb
The historical trend in EV car sales is not looking good in Germany. According to Clean Energy Wire, petrol cars represent 62 percent of all new registrations in Germany, while the share of diesel cars amounts to 33 percent and the share of purely electric cars stands at only 0.8 percent.
These figures don’t look good for Germany: a country that is still reeling from a turbulent few years over car emissions. It kicked off with the “dieselgate” scandal in September 2015, when the country’s largest car company Volkswagen was exposed as grossly underestimating the emissions of its diesel cars. Since then, almost all major German carmakers have become implicated.
Daimler shifts up an electric gear
Yet only a week before these new 2030 targets were agreed, German carmaker Daimler grabbed headlines with its promise to spend €20bn on car battery cells.
Daimler Chairman Dr. Dieter Zetsche promised: “We plan a total of 130 electrified variants at Mercedes-Benz Cars by 2022. In addition, we will have electric vans, buses and trucks.”
Daimler says they have already invested billions of euros in the development of an electric fleet and the expansion of their global battery network, and “are consistently pushing forward with the transformation into the electric future of our company”.
By 2022, Daimler’s entire Mercedes portfolio is to be electrified, with alternatives available in every segment. In total, there will be over 130 variants, from the 48-volt electrical system to EQ Boost and plug-in hybrids and more than ten all-electric vehicles powered by batteries or fuel cells. By 2025, sales of battery-electric vehicles are to increase to 15-25 percent of total unit sales, “depending on individual customer preferences and the development of the public infrastructure,” says Daimler. The reference to public infrastructure is a reminder that this must be a national effort, not just the responsibility of the car manufacturers.
Daimler is also investing more than one billion euros in their global battery production network for Mercedes-Benz Cars. The company currently purchases their cells on the world market. Their statement says: “The global battery production network of Mercedes-Benz Cars will in the future consist of eight factories on three continents. The first factory in Kamenz is already in series production and the second factory there will start series production at the beginning of 2019. Two more factories will be built in Stuttgart-Untertürkheim, one at the company’s Sindelfingen site.” Outside Germany the plan is to build factories in Beijing (China), Bangkok (Thailand) and Tuscaloosa (USA).
Wilko Stark, Member of the Divisional Board Mercedes-Benz Cars, Procurement and Supplier Quality, summarises: “With extensive orders for battery cells until the year 2030, we set another important milestone for the electrification of our future electric vehicles of the EQ product and technology brand.”
The starting gun has been fired, and the signals are mixed. Once again it looks like predicting the future success of Europe’s – and Germany’s – electric vehicles depends on who you listen to.