The Future of E-mobility in Germany and the US

Picture by German Embassy

Ralf Fücks, President of the Heinrich Böll Foundation, gave a welcome address at the conference “Opportunities and Challenges: The Future of E-mobility in Germany and the US”.

The e-mobility conference was hosted by the German Embassy and The Representative of German Industry and Trade in Washington D.C. on March 30, as part of the Transatlantic Climate Bridge initiative.

In light of the ambitious electric mobility targets set by both the US and German governments (Germany: 1 million electric cars by 2020; USA: 1 million electric cars by 2015), the event showcased the development of the electric car industry on both sides of the Atlantic, in addition to the necessary research and development, infrastructure and energy supply.

The Future of E-mobility

Good morning, Ladies and Gentlemen,

It is good to be back in Washington DC and to be here with all of you at this event.

When I arrived in town Sunday evening, the political landscape in Germany had changed fundamentally. Green is the color of the season. And this is much about the issue we’re talking about today: the transition towards a low-carbon energy and transport system.

Let me first extend my thanks to the German Embassy, the Transatlantic Climate Bridge and the team around Friedo Sielemann who have put together this event. I’m aware that the Embassy is doing an excellent job in its effort to connect climate and energy experts from both sides of the Atlantic, and I would like to congratulate Ambassador Scharioth for his ongoing engagement. Let me also thank the Representative of the German Industry and Trade for his support of today’s event.

Challenges to the Auto Industry

Headlines like “Obama Ends the Gas Guzzler Era” (truly a strong annunciation) indicate that automobile manufacturers are experiencing a substantial challenge that will require a profound transformation of the industry. I’m not talking about the usual business cycle. The real challenge is about climate change and the need to drastically reduce emissions, while at the same time global demand for mobility will rise, oil reserves are shrinking and oil prices climbing. It’s about the heavy burden car traffic is adding to many cities and millions of people being trapped in traffic jams every day. All together, these fundamental tendencies will bring about a major change in mobility patterns.

The car industry’s proven recipe for success – building ever larger and more powerful cars – has become an outdated model. It doesn’t fit into times of oil crisis and climate change. The present car-based traffic systems simply cannot be extended to another 2 or 3 billion people around the globe.

Before that backdrop, the race to introduce electric vehicles is on. E-cars will help to cut emissions and to reduce our dependency from oil. In combination with renewable energies, electric vehicles will make an important contribution to meeting climate targets around the world. Without implementing a new concept for e-mobility, Germany will hardly meet its goals to reduce emissions by 40% by 2020 and by almost 95% by 2050 (compared to 1990 levels).

Electric vehicles, however, are only one part of a much broader approach towards sustainable mobility. We need the combination of mutually reinforcing elements.

1. Cars have to become climate-neutral. Electric cars will play a major role in this.
2. It will not be enough to merely replace the internal combustion engine. The “green car of the future” must be embedded in intermodal transportation concepts that will facilitate changing modes of transportation. Electric passengers must be one part of a holistic, systemic approach to sustainable transport and energy sectors; other parts include demand side management via smarter city planning and land use planning, promotion of walking and biking, including e-bikes, light rail, and trains.
3. The “green car of the future” must be associated with new patterns of use. Instead of owning one car for an average of eight years and using it for all transport purposes, people will use several mobility services at once without owning them, but paying for a short-time use. The auto industry will need to shift its business models from selling cars towards offering mobility services. New actors will be entering the scene, such as mobility contractors, car sharing companies, utilities, IT companies and public transportation authorities. They all are called upon to shape the evolution of new transportation services.

Advantages of Electric Vehicles

Within this broader approach of sustainable mobility, electric vehicles play a key role. Here you have four main arguments in favor of E-mobility:

1. Car traffic is causing approx. 14% of CO2 emissions in Germany (in the US, the rate is much higher, probably around 30%). Substantial climate benefits can, however, only be gained when electricity is generated from renewable sources.
2. Driving electric cars will reduce our dependency on oil. In addition, electromobility will stabilize our energy supply. Battery electric vehicles will help improve grid efficiency. The use of vehicle batteries for storing electric power during periods of overshooting supply will contribute to a balanced flow of electricity from renewable sources by smoothing out production peaks and aligning production and load curves more closely. Vehicle batteries can mitigate adverse fluctuation effects and will facilitate the continued expansion of renewable energies.
3. E-mobility will provide new economic opportunities. In the area of renewable energies, Germany has managed to become a lead market in the world. We have set ambitious targets and implemented policies that have attracted investments, ramped up renewable energies, and created more than 350,000 new jobs. Increased resource efficiency and large scale development of renewable energy technologies have moved German businesses into highly competitive positions in global markets. Germany’s ambition is to become a lead market for E-mobility, too. Green mobility will be crucial for the competitive capacity of Germany’s famous car industry. And technology leaders like Siemens or Bosch will play a major role in the supply business. While combustion engine-vehicles will still account for the bulk of new cars added to the global vehicle fleet over the next years, the market share for E-cars will rise more quickly than predicted.  Progress in battery technologies and the use of light materials – like carbon fiber – will speed up when more and more research teams join the global competition to expand the cruising range of electric vehicles and to bring down costs.
4. E-mobility will increase the quality of life in our cities: Microclimates in urban centers today are heavily impaired by exhaust, soot, fine dust and noise from traffic. Switching to E-mobility will reduce these emissions, it will reevaluate the public space and make cities a better place to live and work.

The German National Electromobility Development Plan

In order to stimulate new technologies and mobility concepts, Germany has passed a National Electromobility Development Plan. It aims to speed up research and development in battery electric vehicles and their introduction in Germany. The objective is to have at least one million electric vehicles operating on Germany's roads by 2020. From a green perspective, we should do even more. Two million electric vehicles is an ambitious, but realistic aim for Germany by 2020.

Cornerstones of the national plan are:

Pilot Projects: In the short term, we can begin the shift towards electromobility through demonstration projects and field tests. The federal government has launched pilot projects in 17 cities and regions. The citizens of Berlin can already rent cars with an electric drive at major stations. The city of Stuttgart operates hybrid buses, run by an electric motor in addition to a diesel engine. The first plug-in hybrid and battery electric vehicles can achieve market maturity in very few years. The battery charging infrastructure will have to be built up gradually, starting at the local or regional levels.Involvement of all stakeholders: Electric Mobility cannot be successful unless all stakeholders play their part. The automotive industry, energy suppliers, academia and civil society are incorporated into the German National Platform for Electric Mobility and provide advice to the government on the development of a comprehensive program.

Standardization: Drive and battery technology, charging infrastructure, materials and recycling systems have to become standardized. This is clearly a political task – governments & parliaments have to establish a common legal and political framework, also including education and training.

Sufficient Funds: In Germany, the government’s Second Economic Stimulus Package includes a total of 500 million € for research and development on electric mobility to be spent from 2009 to 2011. Complementary to that, the public and private sectors will spend at least 2 billion € on innovative drive technologies over the period up to 2016. It remains a controversial issue whether and which kind of additional financial programs are required to stimulate electric cars being introduced in the markets. From my point of view, we should not channel tax payers’ money to those who are willing to buy an electric car. It would be more effective and socially fair to restructure the vehicle tax based on pricing emissions: high taxes for high polluters, low taxes for low emissions.

Charging facilities: For the successful market introduction and dissemination of electric vehicles, it is particularly important that charging facilities be organized for simplicity and cost-efficiency. The aim must therefore be to set up an infrastructure that allows for charging electric vehicles at home and en route.

The use of renewable energies: When using the current average electricity mix, electric vehicles have only a small advantage in terms of CO2- emissions over efficient internal combustion vehicles. However, renewable energies can transform them into virtual zero-emission vehicles. This is not too ambitious a goal. In Germany, electric vehicles will account for a relatively small share of total electricity demand. One million all-electric cars, for example, would take up approx. 0.3% of total power demand. Replacing a third of today’s total car traffic by electric operation will require about 5% of present gross electricity demand.

Transatlantic Cooperation

To pave the way for a broad introduction of electric vehicles, we need to adopt a variety of policy, regulatory, technical and infrastructure measures. Open European standards will need to be set, for example, to ensure interoperability, safety and acceptance at a high level.

Transatlantic cooperation would also help to advance the issue, be it between national governments in the Transatlantic Energy Council or between US and German states and cities. One promising example could be enhanced cooperation between the sister cities of Los Angeles and Berlin on introducing e-mobility.

Outlook: Electric Mobility is a Paradigm Shift

Electromobility means nothing less than a paradigm shift for the transport and energy sector. If electric cars prolong the use of dirty coal or risky nuclear power, if they charge at peak demand times, if they only add additional cars onto our already crowded streets, then e-mobility can run into serious troubles. That’s a challenge not only to politicians, but even more so to the industry.  It is therefore crucial to put electric vehicles in a wider concept of restructuring our energy and traffic systems.

Sustainable mobility is not just about replacing gasoline with electricity. Basically, it requires the reduction of car traffic in favor of public transport, even if cars run with renewable electricity. Interestingly, a growing number of young urban professionals don’t see cars any longer as status symbols and favorite personal property. They are just going to hire a car when necessary and pay for the time and distance they are using it. This is about cultural change which must accompany the technical revolution.

Ralf Fücks
March 30, 2011