As Tesla Surges Forward, Will German Automakers Up The EV Game?

SEP 10 2018 BY EVANNEX 32

WITH TESLA RACING AHEAD, WILL GERMANY INVEST IN AN ELECTRIC VEHICLE FUTURE?

Last month, another remarkable milestone came to fruition for the Silicon Valley Automaker. Eric Loveday reports (via InsideEVs), “It’s hard to believe it, but indeed it’s true. In the month of August, the Tesla Model 3 alone outsold all passenger cars from BMW.” Meanwhile, in Germany, legacy automakers are struggling to develop a cohesive strategy for their fledgling electric vehicle programs. As automotive bigwigs argue about how to proceed, small German start-ups are trying to push the EV movement forward.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: Tesla owners stand to benefit from new charging points established by German providers like Ubitricity (Image: James Cooke)

Looking at the industry leader, Tesla has developed a highly aggressive (and sophisticated) worldwide charging infrastructure for its own vehicles. As German automakers trot out new electric cars, the question remains: where is their charging network? Unlike Tesla, individual German automakers have turned their backs on a vertically integrated approach to EV charging infrastructure build-out.

Sensing an opportunity, young entrepreneurial start-ups in Germany are looking to fill the charging void. Leading the effort in places like, “Berlin where start-up Ubitricity is developing MobileCharging and slow-charging EV points that can be incorporated in the urban infrastructure, into lamp posts for example. Elsewhere, a joint-venture created by BMW, Daimler, Ford and Volkswagen Group, called IONITY is developing 400 fast-charging stations across Europe.”

Ubitricity is comparing “the evolution of electric vehicles with emerging markets, where land-line telephones have been leapfrogged by mobile phones,” according to founder Knut Hechtfischer. And IONITY claims that “slow charging is a thing of the past. This new generation only needs 15 minutes for a charge… the time it takes to relax and have a cappuccino,” says company CEO Michael Hajesch.

Above: A look at some small German companies looking to provide EV charging infrastructure solutions (Youtube: Financial Times)

According to the Financial Times, “Germany’s old automotive business model, which lasted for well over a century, of selling combustion-engine cars to private customers, is drawing to a close … A ground-breaking German court ruling in February stated that cities can ban the most polluting diesels from city centres proving that the only way for electric vehicles is forward.”

Furthermore, the country is setting an ambitious goal, “to put six million electrically powered vehicles on German roads by 2030… [and] over the last year, the share of diesel vehicles in German new car sales has dropped sharply, from about half to 35%. Plug-in electric car sales more than doubled in 2017, with the momentum continuing this year, Germany’s Federal Motor Transport Authority reported.”

In addition, “German motorist[s] can get €4,000 euros of subsidies for purely battery electric vehicles, and €3,000 euros for a plug-in hybrid. German purchasers of fully electric vehicles registered between 2011 and 2020 also benefit from a 10-year exemption from ownership tax. The Electric Mobility Act… [also includes] priority parking spaces near charging stations, free or reduced-price parking, and exemptions from some access restrictions.”

Above: Germany’s efforts to encourage EV adoption (Infographic: Financial Times)

Kudos to Germany’s government for policies supporting EVs — especially in light of the dieselgate scandal that rocked the local automotive industry. Side note: it is, however, disappointing to see Germany’s government asking Tesla Model S owners to pay back €4,000 in EV incentives. In any event, small investments in German start-ups like IONITY and Ubitricity are encouraging. But it remains to be seen if it’s enough to catch up with Tesla.

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Source: Financial Times (via Germany Works)

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

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32 Comments on "As Tesla Surges Forward, Will German Automakers Up The EV Game?"

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Gazz

I am not sure what the point is. Tesla is American and dominants North American. German automakers dominant Germany and Europe. The question should be where is Ford, GM and FCA?

F150 Brian

Simple answer: Stuck in the typical American timeframe – next quarter’s financials.

groingo

Ford is off in a corner playing Tiddley Winks, GM and FCA are still checking out the markets while BYD, Tesla and Nissan set the standard.

stimpacker

If they are really serious, the Germans should have policies are that EV-friendly to ALL EVs, not just German-made.
If they’re gonna penalize Tesla buyers in Germany financially, then Americans should penalize BMW and Mercedes EV buyers in America.

Pushmi-Pullyu

It’s pretty universal for the governments of industrialized countries to subsidize their domestic industries, both directly and indirectly, in many ways. The U.S. is perhaps on the lowest end of the spectrum on subsidies. To be fair, I don’t think we should single out Germany for offering less of a laissez-faire market than the U.S. does. Germany follows the norm; it’s the U.S. which is out of step.

Rolando

In Germany all BEV get subsidies of 4k Euro if their base price of the car (including 19% VAT) is below 60k Euro independent of their country of origin.
Tesla was offering a Mod-S base version for 59,900 Euro just for this ‘below 60k’ , but the lowest spec version could not be ordered at all and mandatory upgrades were declared as ‘extras’. So customers bought 80k Euro cars with a subsidy meant for ‘below 60k only’ , that’s why the subsidy was requested back. Now Tesla is offering ‘below 60k’ low specs which can really be ordered at this price and then you get a 4k Euro subsidy.

TomArt

The German automakers do not dominate the EU in the EV market – the Model S was the top seller in the large sedan luxury segment in 2015 in the EU, and has stayed at or near the top ever since.

Gazz

Large sadan luxury segment in Europe is not much of a segment. Tbh I don’t see many Model S being driven about in the UK.

John Dawson

I think we are up to about 6K Teslas on the road here in the UK (I would need to check to get an accurate figure). I see them quite often when I am out and about.

CDAVIS

Article title: “As Tesla Surges Forward, Will German Automakers Up The EV Game?”
—————

The 3 top challenges traditional car makers need to address to compete with Tesla are:

#1: Transition to agile iteration (both hardware & software).

#2: Provide access to a robust convenient and reliable fast charge network.

#3: Transition from a corporate mindset of making low volume transitional
halo/compliance EVs to a mindset of making high volume cool compelling EVs.

Failure to fully address these top 3 challenges will result in continuing loss of market share to Tesla… full-stop.

F150 Brian

Agree.
Until Tesla makes full size pickups and SUVs, the American big 2.5 won’t pay too much attention.
What is the German equivalent? May it’s Crossovers and “not really SUVs” like X3, Q5, GLC. Which would make sense because that is the BEV market they are trying to attack first.

Andy

Pretty much. it says something of CUV’s success when even companies like Porche should now be considered an “SUV” manufacturer rather than a sports car manufacturer (They sell more CUV/SUV’s than sports cars now).

Pushmi-Pullyu

Not just the German auto makers. The Jaguar I-Pace is another “not really SUV”.

CDAVIS

Bonus tip:

Every senior executive of a traditional car maker should spend a minimum of six months themselves driving a Tesla car as their personal primary car… currently there is no better substitution to visualize and experience the fast approaching disruption of automotive … and it’s not what most of these top level executives have formed in their minds. Keep your enemies closer…

G2

#4 Major $2B investment in battery manufacturing for each major company (MB, BMW, Audi, VW) to at least *compete* with Tesla.

F150 Brian

$2B is pocket change for these guys.

Rolando

VW has already inked battery supplier contracts for 48 billion Euro, so where Tesla is struggling to fund their China car factory for 2 Billion, this is pocket money for Big-Auto.

Pushmi-Pullyu

The biggest problem that legacy auto makers are going to have, when they finally get serious about making and selling BEVs in large numbers, is that they’ll be aiming to compete with where Tesla is at that time… not where Tesla will be in 5 years, which is when those other auto makers’ plans will come to fruition.

Hopefully, for the sake of German auto makers’ survival, their response will be more robust than BlackBerry’s response to the iPhone.

groingo

The German makers are going to have to take electric seriously but adding un reliable and costly bells and whistles (that you seldom if ever use) is not going to cut it, keep it simple, reliable and efficient, think VW Beetle and Renault Nissan Zoe, that’s where you want to be for the masses.

Pushmi-Pullyu

Nobody can yet compete in the VW Beetle price category with an EV. Prices on batteries are going to have to come down a lot farther, and volume of production is going to have to come up much farther, to hit that very low price market segment.

ffbj

Not enough to matter.

Johan M

As I see it, the Germans are ahead of Tesla already. I’ve had a Model S since 2016, but my car lacks a lot of the tech that is available in let’s say MB or BMW. The EQC was only 70% “good”, but I think it’s just because the Germans prefer to test their new tech thoroughly before they put it into production. Tesla seems to rush into things and rather end up with a troubled product. I have huge expectations for the BMW iNext and alike from MB. Those will really put a gap down to Tesla, for sure on autonomous tech. A good car is more than 0-60 and a 17 inch screen.

G2

Without major battery investment all this fanfare is just lip service and a path to slow demise.

CDAVIS

@Johan M said: “Germans are ahead of Tesla already…Germans prefer to test their new tech thoroughly before they put it into production… Tesla seems to rush into things…”
———

As I said in an above comment:

***
The 3 top challenges traditional car makers need to address to compete with Tesla are:

#1: Transition to agile iteration (both hardware & software)…
***

Side note: I today received an OTA update for my Tesla Model S to enable a PIN code access option. I’m getting OTA updates on a regular basis. Through these regular updates my car keeps improving… I’ve never before owned a car that regularly keeps improving after the purchase.

TJKR

German cars are still atrocitious when it comes to reliabity and maintenance cost, compared to Hondas and Toyota’s. The average depreciation for BMW 5 series is 50% over 3 years… i.e. if you buy one for $60K new now, it’ll be worth $30K in 3 years. It does not make any sense to buy one so must people lease them. In the US they are just prestige vehicles for people that can afford it.

SansIce

German Car Tech is always behind. I have owned a MB and BMW. When they were new they were one generation behind. I am sure new MB and BMWs still have CD players T model S never had one. Tesla behind – agh – wrong – over the air updates – Germans still don’t have that.

TJKR

We’ve entered a new age in cars where the software is probably the most important thing. Software is going more and more AI dependent and the hub of AI development is Silicon Valley. Building a phone, computer and a car and programming software for them are now all interchangable. This is all going to lead towards people not owning cars and just calling them up via some personal data device and the car taking them to whereever they want to go. Sadly Germany and Europe in general is lacking when it comes to software and hardware to process 1’s and 0’s, what they need to have is their own Silicon Valley but at this point they don’t even havea Silicon Alley.

Henry

By the time the Germans have their cars ready for prime time in 2020, Tesla will have made well over 1 million cars and gained a strong footing on the global scale. Based on what they are offering on paper (I-Pace, EQC, E-Tron, Taycan) and their plans, they are still well behind Tesla’s current offerings. Tesla will continue to lead well into the future.

Bustya

At about that time, Elon will realize why it’s a really bad idea to have 1 million lithium ion battery packs on the road.

Get Real

Because you said so, right?

Go back to Reeking Alpha or Breitbart.

Benz

The Mercedes Benz EQC will be produced in Germany and in China.

I wonder how well the Mercedes Benz EQC will be received in China?

There will be no import tariffs on top of the price of the Mercedes Benz EQC.

Will Jaguar also be producing the Jaguar i-Pace in China?
I don’t think so.

Will Audi also be producing the Audi e-Tron in China?
Probably not, but that’s not certain yet.

Will Tesla also be producing the Tesla Model X in China?
No

Therefore, I think that the Mercedes Benz EQC will probably do well in China in 2019 and beyond.

Rolando

And what I just read yesterday in a comment section in Germany : the local producers have a dealer and repair service network in every town in their home country, but Tesla owners they have to drive 200km to the next service center — that was a main point in discussions about the EQC.