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eMobility offers huge potential to German carmakers, and the mechanical engineering and energy supply sectors also have much to gain from the trend.21 Dec 2016
When it comes to electromobility, German manufacturers definitely have some catching up to do – although the latest developments are hopeful. There are a few models Made in Germany on the market, but a major success to rival Tesla, for example, has remained elusive.
Of 1.73 million cars that were sold in the first half of 2016, according to European Automobile Manufacturers' Association ACEA, only 10,524 could be charged with an electrical connection, whether pure electric cars or hybrids. At the international level, production of electric cars shows much more robust growth, multiplying the total global inventory by more than six in the past three years, to over 1.2 million vehicles. While China with more than 200,000 new vehicles last year represents the strongest climb, the United States with their more than 400,000 eVehicles on the road continue to have the highest numbers. In Japan, the Netherlands, Norway and France as well, more electric cars are taking to the streets. But no country is anywhere near having a consequential share of electric and hybrid vehicles in their fleets.
Mechanical engineering must adapt
Blaming the manufacturers alone for this situation would be a big mistake. "German manufacturers have come further than people think," says Klaus Schmitz, in charge of Automotive at Arthur D. Little consultancy. "Developments based on new technology are biding their time in desk drawers, along with further cooperative efforts in cell manufacturing, waiting for the market to be truly ready for electric vehicles."
This represents a real opportunity for mechanical engineers and energy suppliers, according to a Roland Berger study, which points out that new components and technologies are needed for the production of electric cars that were previously hardly used in the automotive industry, if at all. So the rise of electromobility requires manufacturing technology expertise and capacities for electrical components that cannot be produced by carmakers by themselves.
Boundaries are eroding
Unlike with combustion engines, the Roland Berger study indicates that with electric vehicles there is no longer a clear division between automobile manufacturers and suppliers. Mechanical and systems engineers could take on a stronger share of the value chain and gain new customers, such as battery and electric motor manufacturers.
If suppliers do not want to lose their leadership in the new technology segments driven by the switch to electromobility, to competitors from Asia in particular, they need to gain new expertise, the Roland Berger analysts conclude . There are major opportunities to be found here in battery technology especially.
Renewable energy is a must
The challenges for energy suppliers lie elsewhere. To build an attractive infrastructure of charging stations for consumers will require an estimated investment of some €3 billion. This is a huge volume for a market that remains fairly small to date – experts are reckoning that electric vehicles will make up between two and six percent of total cars by 2020.
And under the current power mix, small urban cars with combustion engines generate lower emissions than an eCar powered by electricity that is not entirely sourced from renewable energies. A much stronger connection between electromobility and renewable energy production must be achieved. This is the conclusion of a study by consulting firm PwC in collaboration with the Fraunhofer Institute for Industrial Engineering (IAO).
The future of electricity is key
The long-term success of electromobility requires above all an efficient, local and economically accessible charging infrastructure – particularly from the perspective of potential users, as indicated by a PwC survey: For 95 percent of drivers, electromobility is closely linked to the possibility of charging the car battery at home. Almost as many say that a sufficient number of public charging stations must be available. Another widely held condition for eMobility's success is where the power for electric cars will come from: Four out of every five people surveyed want this energy to be from renewable sources before they would buy an electric vehicle. The work for the energy sector is clear, at least.
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