Conflicted German Automakers Struggle With EV Transition

Electric Cars
Electric Car Benefits
Electric Car Sales
Solar Energy Rocks
RSS
Advertise
Privacy Policy

Autonomous Vehicles

Published on October 13th, 2018 |

by Guest Contributor

Conflicted German Automakers Struggle With EV Transition

Twitter
Google+
LinkedIn
Pinterest
Facebook

October 13th, 2018 by Guest Contributor

Originally published on EVANNEX.
By Charles Morris

It’s no secret that legacy automakers are making the transition to electric vehicles only reluctantly, in response to regulatory pressure from governments and to competitive pressure from Tesla. Contrary to what many seem to believe, Big Auto’s reluctance to embrace EVs is not merely the usual corporate fear of the future, nor is it the result of any oil industry-fueled conspiracy (as far as we know). It’s a simple matter of money — there are good reasons to believe that electrification will take a major bite out of industry profits, as BMW and Daimler execs recently acknowledged.

German automakers remain conflicted about how to transition factory production lines from gas-powered cars to EVs (Image: Werner Budding)

Now Volkswagen has warned that its stated plan to offer an electrified version of each of its models will cost more than it estimated. VW previously predicted that the coming shift to battery power would cost some €20 billion ($23 billion). CEO Herbert Diess, in an interview published in VW’s internal newsletter, indicated that this figure was too low, but didn’t offer a new estimate. “The burden for our company, such as the cost of bringing to market electric cars, will be higher than expected,” Diess says. “This is particularly so since some of our competitors have been making more progress.” (Hmm, who would that be?)

A recent article in the Financial Times discussed the challenges legacy carmakers are facing. Whereas industry disruptor Tesla started from a blank slate to design its vehicles and has “bet the company” on EVs, incumbent OEMs can’t go down that road — the risks are too high. Analysts have warned that a substantial number of Germany’s 800,000 auto industry jobs could disappear along with the internal combustion engine.

FT points out that VW, BMW, and Daimler have each earmarked billions of euros for electric technology, but are taking different approaches — some automakers hope to build EVs using the same architecture as legacy vehicles, whereas others intend to introduce new platforms. The choice of strategy “will re-sort the carmakers in profitability,” says Christian Senger, head of the VW’s e-mobility line. “Those who [take] the hardest road will be more successful than the others.”

Germany protects its car industry as EU goes for just 15% cut in CO2 car emissions by 2025 (Source:Transport & Environment / Image: Plugin Cars)

Volkswagen is leveraging its scale advantage — earlier this year, it awarded €20 billion worth of contracts for battery supplies as part of a plan to introduce 50 pure EVs by 2025. This represents an about-face from VW’s previous strategy — the e-Golf and e-Up, introduced in 2013, were basically existing models stuffed with batteries.

“To make it a fully fledged electric car, you need to start with a battery pack between the wheels and then you build up the car,” Herbert Diess, CEO of the VW Group, told the FT. “Then you have an effective battery system, the range, and you get a lot of freedom for the design of the car, to make more interior space with the same footprint.” (His words echo what Tesla designer Von Holzhausen said back in 2011.)

The first VW model designed this way, the ID Neo, is to come out late next year, the first of several models belonging to the ID electric sub-brand. Although recent reports suggest the program could be delayed.

VW’s ID concept car appears to be another unconventional design approach typically relegated to Big Auto’s electric car efforts (Image: Charged)

BMW seems to be taking the opposite tack, touting the advantages of “flexible architecture” that can accommodate fossil, hybrid or electric powertrains. BMW plans to offer all of its models with a choice of powertrain starting in 2021. “We can’t afford having two factories standing still,” says CEO Harald Krueger. “With a flexible approach, you can always manage the capacity of your plants. But if you have a specific EV architecture, what do you with the old one? What do you do with the people?”

Daimler is combining both approaches, designing purpose-built architecture for its EQ sub-brand while also setting up its production plants to accommodate all types of powertrains, including fuel cells. “We have hybrids, plug-in hybrids, electric cars and maybe robo-taxis tomorrow,” says Daimler Production Chief Markus Schaefer. “It’s hard to predict volumes for the best way in an uncertain world, so this is the most efficient approach to supply the market.”

Some analysts think the flexible approach is too complex in both design and production. “I don’t see how they can consolidate traditional platforms, from small hatchbacks to large SUVs, and at the same time try to include EVs in the equation,” says Pelham Smithers Analyst Julie Boote. “That’s incredibly complicated.”

In another revealing move, Audi decided no e-tron inventory for its US dealerships would be made available (Source: Charged / Image: Automobile Propre)

Others see merit in the flexible approach, pointing out that it’s hard to predict how quickly the shift to electric cars will take place. “Most carmakers proceeding with EVs are following an ‘If you build it, they will come’ approach,” says Bernstein Analyst Max Warburton. “If you have a dedicated EV platform and the demand doesn’t come, you’ve lost a lot of money.”

Sources: Financial Times, Bloomberg

Support CleanTechnica’s work by becoming a Member, Supporter, or Ambassador.
Or you can buy a cool t-shirt, cup, baby outfit, bag, or hoodie or make a one-time donation on PayPal.

About the Author

Guest Contributor is many, many people. We publish a number of guest posts from experts in a large variety of fields. This is our contributor account for those special people. 😀

Back to Top ↑

CleanTechnica Clothing & Cups

Advertisement

Advertise with CleanTechnica to get your company in front of our readers.

Top News On CleanTechnica

Advertisement

Follow @cleantechnica
Join CleanTechnica Today!

EV Charging Guidelines for Cities

Share our free report on EV charging guidelines for cities, “Electric Vehicle Charging Infrastructure: Guidelines For Cities.”
Advertisement

Cleantech Press Releases

The New Danish Climate Plan — Together For A Greener Future

Shift In Navajo Country As Coal Plant That Navajo Community Doesn’t Want Is Dropped

Capturing CO2 From Exhaust Pipes Is A Bad Idea That Won’t Die

The EV Safety Advantage

Read & share our free report on EV safety, “The EV Safety Advantage.”

The State of EV Charging

Our 93-Page EV Driver Report

30 Electric Car Benefits

Blockchain × Cleantech

Our Electric Vehicle Reviews

Tesla News

Correcting the Cleantech Record

38 Anti-Cleantech Myths

Wind & Solar Prices Beat Fossils

Cost of Solar Panels Collapses

© 2018 Sustainable Enterprises Media, Inc.

Electric Cars
Electric Car Benefits
Electric Car Sales
Solar Energy Rocks
RSS
Advertise
Privacy Policy

This site uses cookies: Find out more.Okay, thanks

Exhaust scandal at VW: Ex-brand management Neußer – The dark side of Volkswagen’s “problem solver”

Heinz-Jakob Neusser “The termination of Dr. Ing. Neußer has not been substantiated so far, “says his lawyer. (Photo: AP) Düsseldorf, FrankfurtWho has such leaders, needs no enemies. For almost 20 years, Heinz-Jakob Neußer made a career in German car companies. First he worked for Porsche, then for Volkswagen, As of 2013, there was a huge… Continue reading Exhaust scandal at VW: Ex-brand management Neußer – The dark side of Volkswagen’s “problem solver”

Daimler, BMW and Volkswagen: carmakers get millions back from diesel funds

picture alliance / Franziska Kraufmann / dpa The German automaker BMW Show stock market chart, Daimler Show stock market chart and Volkswagen Show stock market chart can expect a double-digit repayment from the diesel fund, in which they had paid a total of 250 million euros. This is evident from responses of the Federal Ministry… Continue reading Daimler, BMW and Volkswagen: carmakers get millions back from diesel funds

McLaren Speedtail: 986bhp ‘hyper-GT’ set for October 26 reveal

McLaren has confirmed the reveal date for its new Speedtail supercar. The car will make its debut at 1pm on October 26. The new ‘Hyper-GT’ model, was known under the codename BP23 until the Speedtail moniker was announced and will boast the highest top speed of any car the firm has ever produced, exceeding the… Continue reading McLaren Speedtail: 986bhp ‘hyper-GT’ set for October 26 reveal

Sustainable aluminum for battery housing of Audi e-tron

Audi is the first automobile manufacturer worldwide to receive a certificate from the Aluminium Stewardship Initiative (ASI). With the Performance Standard certification, the ASI confirms that Audi meets the ASI requirements for industrial users of aluminum and sustainably designs and manufactures the aluminum components of the battery housing of the Audi e-tron. For the assessment,… Continue reading Sustainable aluminum for battery housing of Audi e-tron

Audi brings thought leaders to the MQ! Innovation Summit

Artificial intelligence, virtual reality, autonomous and electric mobility. Those are the main topics of Audi’s MQ! Innovation Summit, to be held on November 8 and 9. 700 thought leaders, including cofounder of Apple Computer Steve Wozniak, will convene in Ingolstadt to discuss a “mobility quotient” (MQ) as a measure of a person’s or organization’s mobility.… Continue reading Audi brings thought leaders to the MQ! Innovation Summit

Volkswagen Group deliveries in September affected by WLTP changeover, as expected

The Volkswagen Group delivered fewer vehicles in September, as expected, due to the changeover to the new WLTP test procedure: a total of 827,700 vehicles were handed over to customers worldwide, a decrease of 18.1 percent. The drop in Western Europe, where WLTP came into effect in September 1, was 41.5 percent. Dr. Christian Dahlheim,… Continue reading Volkswagen Group deliveries in September affected by WLTP changeover, as expected

European diesel car sales plummet -IEA

* Diesel car sales sharply down in Europe to 36.5 pct * Demand for diesel fuel falters in August * Governments and cities cracking down on diesel pollution By Ron Bousso LONDON, Oct 12 (Reuters) – Diesel car sales in Europe fell sharply in the first half of the year amid buyer concerns over pollution… Continue reading European diesel car sales plummet -IEA

Tesla says orders placed by October 15 eligible for full tax credit

(Reuters) – Electric carmaker Tesla Inc said bit.ly/2NCbs1r all orders for its vehicles placed by Oct. 15 are eligible for full federal tax credit of $7,500 and such customers will get their cars delivered by the end of the year. FILE PHOTO: Rows of the new Tesla Model 3 electric vehicles are seen in Richmond,… Continue reading Tesla says orders placed by October 15 eligible for full tax credit

Automakers Extend AI Use Beyond Autonomous Vehicles into Back Office

For companies developing autonomous vehicles, AI may be taking the wheel, but it’s also increasingly being used in the back office. Automakers, suppliers and startups developing self-driving cars are implementing deep learning algorithms to operate vehicles without a human driver. With high-performance compute solutions from NVIDIA, vehicle manufacturers are also using AI in their data… Continue reading Automakers Extend AI Use Beyond Autonomous Vehicles into Back Office