By on March 4, 2019

The German Association of the Automotive Industry, known in its native tongue as Verband der Automobilindustrie (VDA), says its members have formally committed themselves to investing 60 billion euros (roughly $68 billion USD) into electrification and vehicular autonomy over the next three years.

The claim was made as part of a larger announcement serving as a rundown for what German automakers hope to achieve in a period where nothing seems certain.

The European Union, along with China and several other nations, have committed themselves to embracing electrification in a bid to lower emissions and modernize roadways. “In the next three years, we will invest over 40 billion euros in electric mobility, in addition to a further 18 billion euros for digitalization, and the development of networked or automated vehicles” said VDA President Bernhard Mattes, adding that German automakers anticipate 100 EV models on offer to the public by the end of that period. 

Despite robust government encouragement, it’s an incredibly ambitious plan, considering vehicle sales appear to be stagnating across the globe and EV growth isn’t yet on pace to overtake internal combustion models until around 2035 — according to most analysts’ best guesses.

However, strict electrification isn’t the only aspect to this. Mobility is a blanket term the industry uses to denote any non-traditional businesses within the industry, and it’s a central element in Germany’s sizable investment. While it certainly indicates autonomous development and electrification, it can also means ride-sharing, connectivity, data accumulation, and more.

“Automobile manufacturers are becoming manufacturers and mobility service providers. This involves significant investments, especially in IT and software. Because these technologies are developing very rapidly, new, cross-industry collaborations are also useful and necessary,” emphasized Mattes. “For this we need a nationwide, dynamic 5G mobile network coverage along all transport routes.”

Mattes also said that Germany, plus a few other sizable (and wealthy) European economies, are set have a significantly higher share of electric vehicles among new registrations compared to the EU average. To bring the rest of the continent up to acceptable levels, the VDA believes Europe “must” expand the EV charging infrastructure and continue incentivizing electric vehicle purchases. It also hopes to avoid a no-deal Brexit, as it claims the decision would result in a major setback for the industry and the larger European economy.

While it’s not terribly shocking to see an automotive lobby group press for government assistance in the selling of vehicles, the push into electrification has already been spurred by government intervention. Increasingly stringent emission regulations and environmental initiatives effectively forced automakers to think differently about the future. It’s changing things, and you don’t need to look further than Daimler and BMW to see that. Once bitter rivals, the duo recently agreed to collaborate on mobility projects in an effort to mitigate R&D costs. Volkswagen plans to do the same with Ford, while also collaborating on more traditional products.

Whether or not this all pans out is another issue, however. Scaling EV production is a massive hurdle to overcome, especially when automakers don’t have a crystal ball or unlimited funds (even if they sometimes act to the contrary) and consumers are standing around shrugging their shoulders. Meanwhile, many automakers are stretching out into new businesses while hunting for fresh revenue streams. Still, most of these pursuits have yet to prove themselves as financially viable, at least not when compared to selling traditional autos with reasonably good margins.

We know Germany can sell cars people want to pay more for, but it’s less evident the same can be done with EVs. Undeterred, Mattes claims the electric revolution is coming to Europe and that everyone, especially the government, should be ready to help. The VDA thinks getting trade disputes settled would be a good place to start.

“Now everything must be done to reach a constructive solution at the negotiating table,” Mattes urged. “The talks and negotiations must now be conducted with high priority. We must not waste any time.”

“The United States, too, can not be interested in us mutually forsaking protectionist tendencies,” he continued. “We are the largest car exporter from the USA. More than half of the 750,000 cars we produce in the US are exported. Around 118,000 people are currently employed at the U.S. plants of our manufacturers and suppliers, 8,000 more than a year ago.”

[Image: Daimler AG]

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23 Comments on “The Cost of Future-proofing: German Auto Industry to Invest $68 Billion Into EVs, Mobility, Data Over Next Three Years...”


  • avatar
    ThomasSchiffer

    Meanwhile in Japan they are doing the opposite by investing in hydrogen/fuel-cell technology. Toyota itself has claimed that they will stay out of the EV game. I am partial to hydrogen/fuel-cell technology because the refueling process is quicker and ranges are longer. Also, I recall watching a review of the Toyota Mirai in which the reviewer, an engineer, stated that fuel-cell cars will not rapidly deplete their batteries when you use the heater/A/C or seat heating features, unlike current electric cars.

    According to surveys the reason why EV sales are sluggish in Europe is because the infrastructure is lacking, the prices are still too high, and because the ranges are so poor and charging times are so long. Once all of these issues are addressed then EVs may potentially force ICE off the market.

    Will it ever be possible to top-up an electric car from zero to 100% within a reasonable time of five to ten minutes? Or will the rules of physics not permit this?

    • 0 avatar
      jmo2

      If you’re just plugging it in when you get home from work why does it matter how long it takes to recharge? You can fast charge it in 30 min if you’re on a road trip or whatever.

      What’s the option for hydrogen? Can you crack water and liquify the hydrogen in your garage?

      • 0 avatar
        multicam

        Gee, that sounds like exactly what I want to do on my 6 hour road trip from Georgia to Florida… make it 30 minutes longer.

        And what’s refueling/recharging in my garage got to do with anything? I don’t pour gas into my car in my garage (I could, but I don’t). Anything other than four to seven minutes once a week at a refueling station is an inconvenience. And yes, that includes plugging something in every day when I get home- for about 12 reasons but I won’t get into that.

        As far as hydrogen… who cares? I think the idea is that you get it at gas stations like you do now with gas.

      • 0 avatar
        ThomasSchiffer

        @jmo

        An electric car in its current state – horrible range, horribly long charging times – is not an option for me. I drive almost 550 km (to my fixed destination and back home) three times a week. At my preferred Autobahn cruising speed of 130/150 km/h (with heated seats and heating on) an electric car will run out of power a little over halfway there. And this is ignoring potential exterior factors (temperature, traffic etc.) There are not enough charging stations, and the few that exist are usually already occupied. It simply is not an option for me.

        • 0 avatar
          bts

          Of course electric cars aren’t going to work for everyone, but there’s a huge number of customers that don’t car about the limitations mentioned here. This could be their second car used strictly for commuting in a multi car family with a few kids, or just someone wanting a smaller car to get around the city.

          It’s not sustainable for society to live a huge distance from their work, so in the future commute times could get shorter.

          And then there’s the research that went into setting the range of the Volt.

          Electricity is already cheaper than gas I thought so the value is there, it’s the car purchase that makes it expensive.

          And the hassle of plugging in an electric car every night is laughable for not wanting to purchase one.

          • 0 avatar
            multicam

            Not laughable if you don’t have a garage, it’s -26C out, you’ve got a baby in one arm and your purse/briefcase in the other hand and the driveway has snow/ice all over it…

            So yeah, I agree that EVs aren’t for everyone. This article just makes me think of the bigger picture. What cost are we paying as a society in general for this push to EVs? There ain’t no such thing as a free lunch, right, so where are the costs mentioned in this article being absorbed? Are German autos going to cost more?

          • 0 avatar
            Art Vandelay

            “Electricity is already cheaper than gas I thought so the value is there, it’s the car purchase that makes it expensive.”

            Not by much lately, Certainly not enough to offset the purchase price. Many reasons to buy an electric. Saving on fuel is waaaay down the list right now and for the foreseeable future.

  • avatar
    multicam

    This right here sounds like a whole bunch of management speak. Buzzwords. Tell me something real, VDA.

  • avatar
    jatz

    Shucky-darn, look at the angle of that A-pillar!

    Genug! Diese Dummheit ist zu weit gegangen!

  • avatar

    Being proponent of electrification myself after reading this piece I start having doubts. Europeans so readily embracing EVs tells me that there something must be wrong with EVs.

    You see Europeans usually do all the wrong moves like e.g. embracing GSM, forcing diesel engines on populace, going forward with supersonic passenger jets (infamous Concord), sinking billions into development of A380 right in time when market for jumbo jets collapses (venerable B747 still has a future as a cargo plane while A380 is dead in the water and is in process of being killed by Airbus just after 12 years of production!).

    On the other hand US has challenge for EU – “New Green Deal” (sounds almost like “4th Reich”).

    • 0 avatar
      ThomasSchiffer

      In my country the Green Party actually encouraged consumers to buy diesel cars because of the better fuel economy and the resulting lower CO2 emissions. Now that same party is working overtime to ban Diesel engines, and soon gasoline engines in favor of EVs.

      How are EVs made? Well, for one, the cobalt is mined by child slaves in the Congo, and lithium is obtained in Chile/Bolivia using almost 20 million liters of water each day to filter out the mineral (at the expense of water pollution). Currently European politicians in favor of EVs are ignoring these issues. They refuse to even comment on the subject when the truth of how the raw materials are mined is presented to them. This alone makes me suspicious of their future plans regarding EVs.

      I predict that in the nearby future, once we have all been forced to give up our ICE cars and drive electric junk, those same politicians who encouraged us to buy Diesels (and then worked to ban them) are going to suddenly ban electric cars, because the raw materials needed to produce their batteries are mined in morally wrong and environmentally polluting ways. This is just a hunch, and it would not surprise me if it turned out to become true.

      • 0 avatar
        ToolGuy

        Thomas,

        – Do you think charging concerns might also hinder widespread market acceptance of cellphones/smartphones?

        – Which will be banned first – electric vehicles, or the ~5 billion cellphones in use around the world in 2019?

        • 0 avatar
          ThomasSchiffer

          Tool Guy,

          A smartphone, depending on usage, has enough power to last at least a day or two. And they charge relatively quickly. Also, with inductive smartphone charging becoming popular across vehicle lineups, the endurance of one’s smartphone is becoming a non-issue.

          Current electric cars, especially for my needs, have poor range and long charging times. I hope this will eventually be addressed because I would hate to be forced to drive an electric car in its current state.

          • 0 avatar
            mcs

            “Current electric cars, especially for my needs, have poor range and long charging times.”

            Actually, they don’t have poor range. 200 to 300 miles range is fine for most people.

            Charging times aren’t bad either. It’s unattended so you don’t even have to be there. Usually you won’t be charging a totally empty battery either. With a 350 kW charging rate, you can put 62 miles into the car in 4 minutes. If you only need 125 to make it home, then it’s 8 minutes. The other day, I needed a quick charge in my 50 kW car. I was there for only 10 minutes because that’s all I needed. From there I went home and plugged the car in and it charged during the night.

          • 0 avatar

            Thomas, what is going on in Germany are peanuts compared with the state of sheer lunacy to which Democratic Party in USA is evolved to considering their idiotic manifesto “The New Green Deal”. If American people accept this proposal then they fully deserve all the consequences following from adopting it.

          • 0 avatar
            ThomasSchiffer

            @mcs,

            That range is nice on paper, but in the real world there are so many factors that will degrade that range.

            Three times a week I have a commute that involves almost 300 km of driving to and another 300 km back. I tend to drive a little faster on the Autobahn, and sustained higher speeds as I understand it are one of the big battery drainers on EVs. That wonderful on-paper range is going to sink like a brick. I am a special case as the average German has a commute range of about 70 km.

            I am not opposed to electric cars, but their range and charging times need to improve for me to even consider one. Furthermore, there need to be more quick-charging stations, which are currently severely lacking in my country. Until electric cars can offer me this, I shall and must continue to drive my Diesel vehicle.

          • 0 avatar
            ThomasSchiffer

            @InsideLookingOut

            Our current government is equally crazy. Do not misunderstand me, I am not against electric cars, but from my point of view they are currently best suited for urban driving and not capable of long-range, high-speed sustained journeys.

            And our government has shut down most nuclear power plants and wants to shut down all coal power plants before 2030. Well, where will our sustained energy come from? Solar and wind power are unreliable and do not provide enough power to sustain our current needs. Our government is famous for shooting first and asking questions later.

          • 0 avatar

            “Well, where will our sustained energy come from?”

            I think it comes from France. France is fully committed to nuclear energy and being unable to compete with Germany on manufacturing will happily become energy supplier. It is like California vs Texas.

        • 0 avatar

          ToolGuy, are you seriously suggesting using ICE engines in cell phones?

  • avatar
    0Gravity

    It makes sense for Germany to go big into EVs. Germany hit 42% of its electricity produced in 2018 from wind and solar. It’s a massive complementary electrification resource. Sophisticated grid management can store excess generation capacity in EV batteries. For example, it’s windier at night so there’s often excess wind power generation when electricity demand is low. EVs can charge up at night on low-cost wind power. Germany will show how the whole renewables / EV ecosystem can work.

  • avatar

    Unlike the American carmakers, the German won’t recklessly ditch their carlines. Nobody wants to follow the Detroit way of doing things.

    GM, what a disgrace!

  • avatar
    hreardon

    I tend to be a contrarian and skeptic, and when I see the herd rushing one way, my brow furrows. It doesn’t mean that the rush to electrification is wrong, but I think that automakers may be overselling the idea in the short term.

  • avatar
    schmitt trigger

    Inside looking Out;
    It took you 15 posts before you showed your MAGA colors. What took you so long?


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