AUTO INDUSTRY | 15.05.2011
Germany willing to pump billions into electric car industry
In her weekly podcast on Saturday, May 14, German Chancellor Angela Merkel said that it was Germany's intention to become a leader in the emerging electric car industry, both in terms of production and consumption.
She said that one million "e-cars" would be cruising silently on German streets by 2020, to be followed by another five million come 2030.
"I am very confident that Germany can very quickly make up the terrain it has lost so far," the chancellor said, in a reference to the fierce competition that Germany will face from car manufacturers in emerging countries, "above all in Asia."
Merkel's lofty plan, however, won't come without a hefty price for the German government. The Welt am Sonntag newspaper reported that Merkel's government was willing to shell out multi-billion euro investments over the next decade to advance "fundamental research" in technologies required for electric car production.
In addition, the report said Berlin was considering a series of measures to increase demand among German consumers for electric cars, including significant tax breaks for e-car owners.
Germany's Green party - an increasingly relevant force in the country's political landscape - even called for a buyer's premium to entice consumers. Renate Künast, the party's parliamentary head, told the Berlin-based Tagesspiegel newspaper that e-car buyers in Germany should receive 5,000 euros from the government for their purchase.
Electric cars, according to Künast, represent a principal means towards "modern and environmentally conscious mobility."
Battery problems
The government's plans, however, face a number of hurdles and have been strongly criticized by leading figures.
Though most car manufacturers currently produce some form of electric model, there are still no e-cars capable of being mass-produced. At present, e-cars are limited to distances of between 100 and 200 kilometers (60 and 120 miles) before their batteries must be charged.
The next problem lies in the batteries themselves. Most take up to 10 hours to charge, and after each charging the capacity is depleted, so much so that most batteries have to be replaced every three years. And then there is the price: the going rate is between 600-800 euros per kilowatt-hour of storage capacity.
Camouflaged subsidies
Wolfgang Franz, chairman of the German Council of Economic Experts, told the Die Welt newspaper on Sunday that Berlin's subsidy plans represented a "distortion of competition" in an industry with, at best, an "uncertain future."
What's more, a host of environmental groups - including Greenpeace, BUND (Friends of the Earth Germany), and NABU (Nature and Biodiversity Conservation Union) - have expressed doubts as to the impact of electric cars on the environment, viewing Merkel's plans as nothing more than a willingness to inject further government funds into the automobile industry.
"The government's subsidy concept is nonsense," said Wolfgang Lobeck of Greenpeace. "E-cars themselves of course do not pollute the environment, but the production of the electricity on which they run, in the end, causes just as much greenhouse gas emissions as gasoline-powered cars."
The president of the German Association of the Automobile Industry (VDA), Matthias Wissmann, retorted such criticism by saying Germany currently invested much less in the electric car industry than countries such as the US or France.
"Nobody is asking for subsidies that will last forever," Wissmann told Die Welt. "We are talking about funds that will enable foundational research, for the development of modern operations and the necessary training of employees for this pilot project."
Author: Gabriel Borrud (Reuters, dpa)
Editor: Toma Tasovac
Editor: Toma Tasovac
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