The progress made in this area varies in each individual country – depending on the political and economic framework conditions. Yet the way forward is clear: More and more people will drive electric vehicles in future.
The European Union has decided, for example, that CO₂ emissions from new car fleets must be reduced by 35 percent by 2030. This can only be achieved if manufacturers invest more heavily in the production of electrically powered vehicles.
The task is clear but the challenge lies in the execution – which will by no means be a linearprocess.“ Things are developing very differently in each region and we cannot speak of a uniform global e-car market," says Nicolai Müller, Senior Partner at McKinsey, who together with his team regularly measures the progress made in e-mobility in the 15 most important countries for this sector.
The fact is that electromobility is growing, but starting off from a low level. The global stock of electric cars had grown to 5.6 million at the end of 2018. In comparison to the previous year, this represents an increase of around 74 percent. In absolute terms, China sets the gold standard. A total of 1.2 million electric cars were sold in the country in 2018 – twice as many as in the previous year – which means that more than every second e-car in the world was registered in the Middle Kingdom. The demand for e-vehicles also increased significantly in the USA in 2018; there were 356,000 newly registered vehicles, which represented an increase of 84 percent. More than every second new e-car in the USA was registered in California. The west coast state has once again confirmed its status as a pioneer for e-mobility. The number of e-cars has also grown in Europe – although at varying rates.
An upward trend for e-cars
E-mobility has so far been a niche market in Germany. Yet the trend is clear: The number of e-cars is also increasing here at home.
Although Germany has certainly made progress in the area of electromobility, it has been at a relatively moderate pace. Around 68,000 new e-cars were sold here in 2018. This represents growth of 26 percent compared to the previous year and makes Germany the second largest market in Europe after Norway. More than 86,000 e-cars were newly registered in the Scandinavian country in 2018 – which has a population of just 5 million people.
A quick glance at the share of the total market accounted for by e-vehicles shows how much road traffic is still dominated by cars with combustion engines. Or in other words, this highlights the huge potential offered by electromobility. The share of the global vehicle stock accounted for by electric vehicles still stood at just 0.5 percent at the end of 2018. The undisputed leader in terms of market share is Norway, where electric cars account for around 10 percent of the total number of vehicles.
The figures and the underlying framework conditions differ in each region. “Many factors vary from country to country, in some cases even from city to city: the size of the purchase subsidy, the charging infrastructure and the legal regulations all differ,” explains Nicolai Müller, the expert from McKinsey.
Electricity is becoming “greener”
New technologies must have the right framework conditions: Targeted government funding is decisive for promoting e-mobility.
China is a good example: “China is setting the pace for e-mobility globally and is embracing this role with increasing intensity,” says Prof. Dr. Stefan Bratzel, Director of the Center of Automotive Management (CAM). “Decisive factors in this strategy are industrial policies such as independence from oil imports and the targeted development of globally active car manufacturers with electrical expertise.”
There is no other country in the world where e-mobility is promoted as strongly as in China, where around 40 percent of the purchase price for an e-car is subsidised. These vehicles can be registered easily, while a draw is held for permission to register standard cars with combustion engines. No wonder that the number of e-vehicles on China’s streets is set to continue to rise dramatically – from the current figure of 2.6 million (end of 2018) to more than 5 million in 2020. In addition, there are plans to manufacture 5 million e-cars per year up to 2025. This would be equivalent to the current production capacities of all the German car factories combined. At the same time, considerable investment is being made into the associated infrastructure in China. There are plans to install a total of 4.8 million new charging points for e-cars in the country by 2020. China means business with electromobility and already realises that the new drive technology onlymakes ecological sense if the required electricity comes from renewable sources. The country is still very dependent on coal-fired generation but invested almost 133 billion US dollars in the expansion of renewable energies in 2017 – more than every other country worldwide.
Electromobility means California in the USA
This federal state on the West Coast is also a pioneer in the expansion of renewable energies.
These dynamic developments cannot (yet) be seen in the USA, despite the special role played by California. Range is a decisive factor in the Great Plains and other flat land areas, while fossil fuels are so cheap that cars with combustion engines are clear favourites amongst purchasers. However, the proportion of e-cars is also set to grow in the USA due to the predicated fall in production costs. In addition, the US market will benefit from high investment by US automakers in new drive technologies – and from the stricter emissions standards in some federal states.
It comes as no surprise that California also plays a special role in this area. The west coast state aims to reduce its greenhouse gas emissions by 40 percent by 2030 and that’s why it plans to rigorously expand electromobility. Subsidies are available for electrically powered vehicles across the USA as a whole. For a plug-in hybrid or a car with a battery capacity of at least 5 kilowatt hours, purchasers receive a tax credit of 2,500 US dollars. The tax credit can increase up to a maximum of 7,500 US dollars for larger battery capacities.
The charging infrastructure is very unevenly distributed regionally in the USA. The highest concentration can be found on the West Coast. The “West Coast Electric Highway” – an initiative to promote electromobility – has charging stations every 40 to 80 kilometres. Around 16,000 public and 3,000 private charging stations exist across the country. Yet this is nothing in comparison to standard filling stations: owners of vehicles with combustion engines can use around 112,000 filling stations each offering up to 30 fuel pumps. It is the car industry in particular that wants to invest billions of US dollars in the next few years to close this gap in infrastructure.
The expansion of electromobility in the USA will also go hand in hand with an increase in electricity generation from renewable energies. The share of total energy generation accounted for by renewable energies increased by 15 percent in 2017, with electricity generation from solar energy even increasing by 25 percent – thanks to California.
E-cars are conquering the world
Ambitious targets: Germany aims to have 1 million e-vehicles on its roads by 2022 – which is ten times more than in autumn 2018.
Germany has also made progress over the last few years with the expansion of renewable energies and generation of green energy increased by around 6 percent in 2018 in comparison to the previous year. Overall, the share of total gross electricity generation accounted for by renewable energies here at home stood at around 35 percent. Coal accounted for a similarly high share.
The increasing debate about emission limits and bans on certain vehicles have, in particular, resulted in a noticeable upturn in the market for electromobility. And yet the country is still lagging behind its own targets. As a result, the German government had to move the deadline for achieving its target of having around 1 million e-cars on the streets of Germany from 2020 to 2022 (see also the interview below). Around 142,000 battery powered cars were on our roads by the end of 2018.
The German car industry has now announced that it will invest a huge amount in the expansion of electromobility and will launch numerous new e-car models on the market. In the meantime, the government has also started focusing more strongly on state subsidies so that purchasers of e-cars will now receive an environmental subsidy of at least 4,000 euros.
It will require considerable effort to install the necessary infrastructure for the 1 million e-cars now planned for the new deadline of 2022. Experts at the German National Platform for Electric Mobility (NPE) estimate that around 77,000 public charging points need to be installed by then – there were only around 16,000 by the end of 2018. EnBW recognised this a long time ago – it is not only a pioneer amongst energy suppliers for the expansion of renewable energies, but also leads the way in the construction and operation of public charging points.
Interview with Prof. Dr. Henning Kagermann
Electromobility offers clear advantages for the climate, environment and life in urban areas – especially lower CO₂ emissions, zero local emissions of nitrogen oxides and particulate matter, and less noise pollution. Electric vehicles are cleaner and quieter.
Much has been achieved in the last few years. Germany is a leading international supplier for electromobility. Our car manufacturers have achieved a comparable market share for their electric cars as for their conventional cars in all markets, with the exception of China which is a special case. Every third patent for electromobility worldwide is held by Germany.
An appropriate charging infrastructure to meet the demand, suitable framework conditions, incentives and attractive vehicles must all go hand in hand to enable e-mobility to quickly break though on a large scale. The funding packages for the expansion of the charging infrastructure are already beginning to bear fruit. Just within the scope of the funding programmes offered by the German government, it was possible to triple the number of normal charging points and achieve almost a tenfold increase in quick-charging points by the end of 2018.
We need to ensure that we don’t let up in our efforts so that we can maintain the highly dynamic growth of the market. Local authorities should ensure all users of e-cars are able to take advantage of the benefits offered by the Electric Mobility Act. In addition, the environmental bonus should be retained until the target of 1 million electric cars on German streets is achieved. This should be accompanied by further funding measures to expand the charging infrastructure and by reforms to tenancy law and property rights, so that the number of public and private charging points can grow in line with the number of e-cars.
As the number of electric cars increases, they will become an important control variable for the energy sector. The demand for charging infrastructure that is fit for the future will then grow steadily. This will place new demands on the power distribution grids which can be countered by the local expansion of the energy grid and the use of smart load management. It is already necessary today to build a comprehensive, intelligently networked and controllable charging infrastructure across the country to ensure that integration into the grid remains sustainable and cost-efficient.
“Germany is a leading international supplier of electromobility.”