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Germany ups pressure on car industry to invest heavily in EVs, batteries

London (Platts)--16 Apr 2018 925 am EDT/1325 GMT


Germany's government is increasing pressure on its car makers to invest heavily in electric cars as well as battery production in Europe to safeguard jobs in Germany during a rapid transformation of the sector.


  • Car lobby VDA says already investing $50 bil in future mobility
  • Germany targets 1 million EVs 2020, EC wants 100 GWh battery production
  • Transport sector emissions have entered political agenda

New economy and energy minister Peter Altmaier called on car makers to invest "high double-digit billion" sums into electric car technology and develop battery production in Europe, according to an interview with Germany's biggest newspaper Bild.

Germany's car industry, which produced a record 16.5 million passenger vehicles last year and employs 825,000 people, is already planning to invest Eur40 billion ($50 billion) by 2020 into electric mobility by 2020, the VDA automotive industry lobby group said in a statement Monday.

"The German automotive industry pursues a broad-based decarbonization strategy. It ranges from additional improvements in combustion engines to alternative powertrains and fuels such as hydrogen, natural gas and e-fuels, and to all-electric vehicles," it said.

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Germany's new government also maintains its target for 1 million EVs on the road by 2020, despite currently just 100,000 EVs with reports of a slow uptake of government incentives.

Here the VDA pointed to a model offensive by its car makers, trebling the number of EV models available to 100 by 2020. Even now, seven out of the 10 most popular EVs are German models, it said.

"Germany has to catch up concerning the charging infrastructure," the VDA added with currently 11,000 charging stations accessible of which only 560 are rapid charging points.

German utility group BDEW proposed to redirect underused government subsidies to purchase EVs to the public fund to build up the charging network with so-called 'range anxiety' still an important impediment for uptake of EVs.


EU BATTERY ALLIANCE


On Monday, Altmaier, the highest ranking CDU minister in Chancellor Angela Merkel's fourth cabinet, also met with the EC's energy chief Maros Sefcovic for talks in Berlin.

"Particularly glad to have such a staunch ally in our strategic efforts under the EU Battery Alliance," said the EC vice-president, who advocates a 100 GWh/year battery production capacity in Europe by 2025, following the meeting.

In a parliamentary reply, the new German government said earlier this month it does not share the skeptic view by its car industry regarding battery production in Europe, describing Sefcovic's target as 'ambitious, but achievable.'

According to the detailed response to a parliamentary question, Germany's government has supported domestic battery research with Eur450 million since 2008.

Germany's biggest car maker Volkswagen said last month it had awarded contracts to battery manufacturers mainly in Asia with a volume of Eur20 billion as it plans to expand the production of electric vehicles worldwide on a massive scale.

Altmaier hinted last week that domestic battery makers could be exempt from the green energy levy that drives up German industrial power bills.


TRANSPORT EMISSIONS


Germany's new government has to walk a fine line between support for its key export industry with rapid global change for the automotive sector as well as growing domestic pressure to address rising carbon emissions in the transport sector and clean-up inner city air pollution following the diesel-scandal.

So far, the government has resisted inner-city driving bans for some diesel cars, preferring a software update for affected models to more costly hardware changes, but with new diesel passenger car sales already falling sharply, offset by rising gasoline-powered car sales.

Utility lobby group BDEW last week called again for an inclusion of transport and heating emissions into CO2-pricing mechanisms as it believes the power sector is already shouldering a heavy climate burden, on track to achieve its 2020 targets following another 5% cut it power plant emissions in 2017.

Here the focus will be more on heavy trucks, with the European Commission currently preparing new emissions targets for 2025 and leading European industrial groups expected to call this week for a 24% cut compared to the EU car lobby ACEA's 7% cut offer, according to a report by German magazine Spiegel.

--Andreas Franke, andreas.franke@spglobal.com
--Edited by Jeremy Lovell, newsdesk@spglobal.com




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