Bain: Germany’s goal of 1M electric cars by 2020 is unattainable; fewer than 50,000 units on road by end of this year
23 December 2015
The German Federal Government plan to have one million electric cars on its roads by 2020 has failed, according to the analysis of international management consulting firm Bain & Company. By the end of 2015, there will be a total of about 50,000 electric cars and plug-in hybrids on the roads in Germany (about 75% below plan); nevertheless, structural transformation towards electromobility is continuing, according to the firm.
Stricter emission laws and the technological advances in electric drives will accelerate the trend towards e-mobility in the medium term, Bain said.
In 2014, Germany had only about 26,000 pure electric cars and plug-in hybrids registered. According to the policy plan, that number should have been 100,000 units.
According to Bain analysis, 20,288 electric cars and plug-in hybrids were registered from January to November 2015 in Germany, suggesting approximately 23,000 vehicles for the full year. But instead of the targeted 200,000 electric cars and plug-in hybrids the total inventory is the end of 2015 will be less than 50,000 vehicles—about 75% below goal.
In terms of international electric car market share, Germany with 0.6% (as of 1Q 2015) is far behind Norway (33.1%) and the Netherlands (5.7%).
Tax incentives, special depreciation allowances for electrically powered service vehicles and incentives for private customers of up to €5,000 (US$5,450) per vehicle are currently discussed politically, but the funding remains unclear.
The challenge now is to develop electromobility under the prevailing conditions in Germany. In the medium-term there is no alternative to achieve the more stringent emission standards by 2025.
—Dr. Klaus Stricker, Head of Global Automotive Practice Group at Bain & Company
The European Commission is discussing new CO2 and fuel consumption targets for 2025 that could be a further 18-28% lower than those of 2020. Further, changes in emissions testing with the advent of the WLTP and Real Driving Emissions (RDE) will raise the performance bar.
Against this background, it is even more important now to create a solid basis for a sustainable growing market for alternative drive systems, beyond political visions.
—Dr. Stricker
According to Bain analysis, the cost of Li-ion battery systems will fall significantly from today’s €260/kWh (US$283/kWh) to be less than €150/kWh (US$163/kWh) by 2018, with the possibility of dropping further to €110/kWh (US$120/kWh) by 2022. The more than 50% decrease in Li-ion costs in the coming years will fuel structural change, Bain said.
In parallel, policies will drive an increase in the cost of conventional drives, forcing further optimization of engines and exhaust technology further. Bain projects that the cost of pure electric cars with the required range and corresponding battery capacity compared to vehicles with combustion engines will achieve parity about 2022 when calculated over the entire lifecycle.
However, the exact timing of cost parity depends on different, non-predictable factors, including oil and fuel prices as well as national and local policy decisions, such as zero-emission zones in inner cities.
Bain suggests several key areas for action for manufacturers to prepare for and to support what the company sees as an inevitable transition to electromobility:
Further develop battery technology. The development and production of Li-ion batteries for electric cars is mainly the domain of Asian manufacturers. Bain advises the German automobile manufacturers to work together at a local battery production, ideally including cell production, through consortia similar to Audi, BMW and Mercedes’s acquisition of Nokia Here digital maps and related services. The next generation of batteries—especially solid-state batteries—re-open new market opportunities, Bain said.
Build the charging infrastructure. Consumers demand sufficient charging and fast charging options for their e-cars, both in the city and on the highway. Tesla for example, maintains in Germany today a fast charging network with 55 "Super chargers". Other manufacturers rely on their own networks, which also here synergies must be realized by multi-vendor solutions.
Expansion vehicle range. With ever-improving efficiency of electric cars, manufacturers will also broaden their EV product ranges. Instead of electrified derivatives of conventional vehicles, new vehicles coming on the market are optimized for electromobility.
I think it is good to have realistic goals.
Posted by: SJC | 23 December 2015 at 08:16 AM
Norway has shown how it can be done. Tax ICEs. Provide incentives for EVs.
Automakers get the signal, too.
Posted by: electric-car-insider.com | 23 December 2015 at 09:32 AM
Reaching goals is not automatic. Authorities and electrified vehicle makers have to make the right moves.
Norway, Japan and California are good examples for Germany to follow to meet the high 2020 goals.
Posted by: HarveyD | 23 December 2015 at 09:53 AM
Mandates and arbitrary goals usually don't work. Carbon tax revenue
used to help offset the extra cost of hybrid, PHEV and EV would help.
Posted by: SJC | 23 December 2015 at 10:50 AM
They're making assumptions based on current vehicles and their price/range. EVs with 150-200 mile real world range and a price tag of around $30k would throw these assumptions off quite a bit.
Do I think they'll make 1 million by 2020? Probably not. But who cares. It's just some goal to shoot for. It it's 2022, it's not going to change anything materially. We're in love with "round numbers" like 1 million. If we'd been born with 8 fingers, they'd be shooting for 262,144....and it would be an "even 1,000,000" :)
Posted by: DaveD | 23 December 2015 at 11:02 AM
To me any realistic "goal" must include leaving a habitable world for our children - let alone grandchildren.
Posted by: Arnold | 23 December 2015 at 12:04 PM
If we'd been born with 8 fingers, they'd be talking about 4 million.
Note that I don't say "shooting for". Germany has not actually adopted a policy to put 1 million EVs on the road, just as it has not adopted a policy to actually cut carbon emissions. It has adopted policies to promote feel-goodism (some of them at the expense of e.g. old-growth forests being turned to ashes). This is foolishness at enormous expense, and the longer the Germans take to recognize this the more they will have to regret.
Posted by: Engineer-Poet | 23 December 2015 at 02:24 PM
Norway is la-la land with so much money and energy they can promote any policy they like and easily pay for it.
Germany is a bit more normal in many respects.
Norway has no ICE car makers, Germany has loads and they will be reluctant to change unless they want to, or are forced to.
One problem for Germany is that people like to bomb up and down the Autobahns at high speeds, which does not suit electric cars which tend to be energy limited.
On the other hand, the Germans are in their own la-la land replacing their nuclear power stations with lignite burning stations, all in the aim of "energy transformation".
Maybe they could promote EVs for city dwellers who do not feel the need to drive on Autobahns at 160 kph.
Posted by: mahonj | 23 December 2015 at 03:00 PM
Germany is already at 33% renewable electricity (mostly wind and solar). EVs charged when it's windy or sunny will be very cheap to run.
Posted by: clett | 23 December 2015 at 03:16 PM
The latest figures I've been able to find for Germany's RE show wind + PV taking a bare majority, with biomass (forests and ecosystems turned into clearcuts and wood chips) coming in ahead of PV and not far behind wind.
Posted by: Engineer-Poet | 23 December 2015 at 08:04 PM
They are at about 33% electricity from renewables, which is easy enough to do if you have wind and solar.
However, they will have to build loads of transmission capacity to move the power from North to South and back.
Going beyond this will be expensive as you will have to triple everything: (Solar + Wind + Biomass + Transmission + Storage).
They talk about local production (gazing up at a local windmill or solar panel), but this needs countrywide distribution to handle excess or insufficiency. (Still night anyone) ?
Quite a good wiki article here.
https://en.wikipedia.org/wiki/Renewable_energy_in_Germany
Posted by: mahonj | 24 December 2015 at 02:48 AM
As more majors get involved, the cost of fixed and transportable storage units (ESSs) will come down at a quicker rate and REs will bloom to 50% in many countries.
Germany, China, USA, Japan may lead for a while but others will catch up quickly.
Old CPPs and NPPs will be progressively replaced.
Posted by: HarveyD | 24 December 2015 at 08:07 AM
"If a law eliminating ALL new internal-combustion cars was passed today, it would take until 2034 for half of the U.S. fleet to turn over." Plug-in EV's are less than 1% of USA's new-car market today, so it might take well into the next Century for 1/2 of the fleet to become Plug-in EV's.
Since it will take so long for EV's to populate the road in sufficient numbers to help reduce CO2 release, how are we going to halt CO2 release?
We can start making synthetic fuels from Renewable Energy (RE) to substitute for petroleum fuels. However, the insurmountable problem is that Synthetic gasoline from CO2 and H2 from Renewable Energy (RE) will cost at least twice as much as gasoline when oil is at $40-50 per barrel currently!
A potential solution could be a RE fuel mandate and RE electric grid mandate to gradually phase in RE until we will arrive at 100% RE Economy within 50 years for both transportation AND for the electricity grid.
For example, 0.5% increase in RE content of ALL FUELS AND of the grid electricity yearly for the next 5 years, increasing to 1% increase annually for the 5-year following, then to 1.5% annual increase in RE content for the 5 years after that... and so on and so forth ...until we will reach 100%-RE economy 50 years from now. The rate of increase is gradual enough to avoid any economic hardship, yet allowing the energy companies to ramp up infrastructure for RE-fuels steadily, thus boosting the economy significantly.
Don't forget about the gov. mandate to double fuel efficiency of cars a decade from now. If we are going to
have synfuel costing 2x as much as fuels now, while future cars are going to be capable of doubling the MPG of current auto fleet, then the cost per mile will remain the same, so no economic hardship.
Will it be possible to double the MPG of future cars and will still be affordable?
Hybrids like the Prius is already there, not having to wait for 10 more years.
Future synfuel probably won't cost twice as much as petroleum due to steadily decreasing prices of RE and
mass production and economy of scale, thus good profit margin for oil companies. Imagine this: doubling in fuel economy hence halving the oil consumption YET same or higher profit income for oil companies because total spending on fuels will remain the same. So, the oil
companies won't object to this mandate...and the oil companies have a lot of political power.
This will also boost the adaptation of Electric Vehicles (EV's) because electricity charged directly from Solar and Wind (S&W) energies will be cheaper than using S&W energies to make synthetic fuels.
Looks like the gradual-phasing-in RE mandate is gonna be a win win win situation for everyone. No carbon tax will be necessary. Tax is a dirty word in politic and is usually avoided by politicians.
This will even benefit oil and gas exporting countries. Imagine that Saudi Arabia can also produce fuels from their vast solar resources by using CO2 and H2O from sea water. Solar-Poor and land-locked Russia can produce liquid fuel and methane from wind energy using carbon sourced from waste biomass. With RE mandates, the higher prices of RE-synfuels will no longer matter. The slow phasing-in period of 50 years will ensure no hardship on neither consumers nor for oil producers. The world-wide economies will grow significantly when RE will be rapidly developed! With economy of scale, the future prices of RE-synfuels will be lower and lower.
Posted by: Roger Pham | 24 December 2015 at 09:28 AM
We can apparently get a ~50% improvement in fuel economy using the Achates engine, and quite a bit more by going back to power/weight ratios common in the 1970's and 80's.
If any of the non-lithium battery chemistries listed here get commercialized (Al, Na, etc.) we'll see a drop in material cost. A number of those chemistries appear unsuitable for EVs due to lower energy/weight, but have power/weight very attractive for HEVs and light PHEVs. Combined with the Achates engine, hybridization could get us to the CAFE targets without sacrificing performance. The electronics for these things are only going to get cheaper, more powerful and more reliable.
Posted by: Engineer-Poet | 24 December 2015 at 01:10 PM
Oil went for about $3/barrel to almost $150/barrel (I.E +50 X and then back to #35/barrel) and we survived.
Improved cleaner higher cost fuels equivalent to $150/barrel or about 4X today's oil price would be mangeable. We did it before with gas guzzlers?
I agree with E-P that higher performance lower cost batteries and improved ICEs in HEVs and PHEVs will further reduce fuel consumption close to 65 mpg and 130 mpge respectively.
The world could soon produce 10,000,000+/year each. With an average of about 100 mpge, the impact on oil consumption and GHG/pollution could be significant.
Posted by: HarveyD | 25 December 2015 at 08:33 AM
The combined average fuel consumption with our Toyota HEVs (Prius + Camry) is already less than half (les than 50%) USA's fleet average.
Of course, PHEVs could do about twice as well and would reduce fuel consumption to one quarter (to less than 25%) of the USA's fleet average.
A PHEV + HEV mix could reduce USA's Oil imports to almost zero. BEVs & FCEVs would become bonuses.
Posted by: HarveyD | 27 December 2015 at 01:16 PM
The U.S. imported 10 million barrels per day in 2005 now ten years later imports about 5 million barrels per day. Boomers drive fewer miles and the cars get better mileage. Even though the government has done little to make us "energy independent" the last 40 years, the market and demographics have changed.
Posted by: SJC | 28 December 2015 at 11:50 AM
Except for low employment periods (2008/2009) Americans have not driven less total miles.
The major oil import differences have been from higher local Oil production combined with lower consumption vehicles. This could continue whenever the price of Oil picks up again.
USA's Oil import could drop to zero with Oil @ or close to $100/barrel, a few more million HEVs, PHEVs, BEVs, FCEVs and lighter more efficient ICEVs on the roads.
Electric trains, buses, and taxis would also help.
Posted by: HarveyD | 30 December 2015 at 07:12 AM
By the way, 90+% of Big three cars last less than 11.5 years in our area. Toyotas do much better with an average of 15.5 to 16.5 years.
By 2034, all/most ICEV cars (with a few exceptions) could be off the roads if we stop selling them now.
Posted by: HarveyD | 31 December 2015 at 08:16 PM