German Automotive Agrees To Go Electric

28th March 2019

Electric Volswagen - MAT Foundry

When Elon Musk unveiled his Tesla master plan in 2006 many scoffed at his vision of an electric future. 13 years on the self-styled engineer turned entrepreneur looks destined to have the last laugh on the subject. He could even shout about it on Netflix.

The Penny Drops

Indeed the success of bringing a range of electric vehicles to market, coupled with EU commitments to cutting carbon emissions, has prompted a worldwide rethink. No longer a pipe dream, electromobility is altering the motoring landscape.

Acknowledging a now undoubted tectonic shift, almost every automaker across the world is rapidly electrifying their offerings; Bentley and Porsche among them.

Yet while certain manufacturers and their respective homelands embrace change, others are somewhat slower on the uptake. Certainly, it has taken recent events to stun Germany’s big three into cohesive action, and not without a little resistance.

Yes, the story of how Volkswagen, BMW and Daimler this month agreed, belatedly, to go electric is an intriguing one - and owes much to the perseverance come bloody mindedness of VW CEO Herbert Deiss.

Deiss resorted to threatening Volkswagen’s withdrawal from the sacred Association of the Automotive Industry (VDA), having been roundly criticised for championing the EV cause. In short, he had called for German carmakers to focus solely on electric from 2019 onwards and lamented a lack of progress up to this point, particularly when it came to charging points.

Those comments riled his BMW counterpart Harald Kruger, and a very public spat was soon played out. All was set to come to a head in a titanic and tense conference call only for tensions to subside and agreement to be found.

How? Perhaps it was the mediatory skills of Daimler head Dietmar Zetsche, who was also logged on. Whatever the agenda, the trio emerged to reveal consensus had been reached, and new, electric initiatives would soon be shared.

The not so small print came courtesy of the VDA itself, who in mid-March announced Germany would dedicate 40bn euros to electric vehicles in the next three years, essentially tripling production. What’s more a further 18bn would be invested into self-driving technology. Somewhere in California Elon Musk was surely sporting a wry smile...

Tesla Technology - MAT Foundry

Credit

But can this sudden U-turn truly be attributed to Tesla?

While the South African cannot take full responsibility for the surge in electric (pun very much intended), it would be wrong to say he did not chart a course of sorts. Back in ’06 he outlined plans for EV’s so good they would inspire drivers to turn their back on traditional models. He (and we) are not quite there yet but that day is approaching far quicker than anyone envisaged.

The Roadster (2008) proved the concept, while the Model S and Model X (2012) glamorised it. The gamechanger however was 2018’s Model 3. A wrought production process riddled with setbacks – Tesla missed initial targets by 93% - mattered little come launch.

Already the highest selling plug-in car in history, it has proven a hit with casuals and critics alike. The National Highway Traffic Safety Administration awarded it no less than five stars in every ranking category, while its impressive 325 mile long-range charge has silenced doubts over electric's abilities compared with Internal combustion engines. All this has not gone unnoticed in China or Europe, where there is unprecedented demand.

To have a fledgling manufacturer so significantly contribute to an industry shift on this scale, to have some of the largest businesses on the planet now playing catch up, it’s well worth noticing.

Deiss has referenced EU law as the reason behind his own electric crusade, but the success of the Model 3 will not be lost on him, nor his Skype friends.

It proves electric is not only viable but the obvious choice. It’s also noteworthy that amidst the eye-watering sums pledged to EVs, plans for hydrogen fuel cells were shelved. Once viewed as a real alternative improved charging range has all but seen off this challenge.

Japanese manufacturers still harbour ambitions for hydrogen powered vehicles, believing that are real future of mass transit - but Germany has decidedly gone the other way, despite already making progress in the field. At least hydrogen powered trains are a goer.

Time is Ticking

Elsewhere the Paris Agreement has introduced a countdown of sorts, with all cars needing to be CO2 free by the year 2050. Considering vehicle lifetimes. recent studies suggest petrol and diesel will need to be outlawed by 2028 if earlier targets are to be met. It is then as good a time as any to join the party. A party that could end up being the only one in town, and one that no-one can afford to miss.

Moreover public attitudes seem to be changing. Vehicle sales are down across the globe, with expected annual sales falling well below the estimated 100m mark. There could be multiple factors at play here. Rising living costs for instance, or the convenience of services such as Uber. Just as feasible however is the idea that the population is awakening to the reality and severity of global warming, thus shunning gas guzzlers, delaying purchases, and making their existing vehicles last that bit longer.

Still however doubts persist. Both Ferrari and Lamborghini have poured cold water on the idea of an electric supercar, believing them to be missing a key ingredient - but they are now in the minority.

Where Musk wanted to accelerate the world’s transition to sustainable energy, Deiss wants Germany to become trailblazers in the production of cleaner cars. Significantly, he now has the buy-in of two influential peers and the VDA.