Despite Lagging, German Automakers Are The Biggest Spenders In Electric Car Technology

March 15th, 2018 by Nicolas Zart

Continuing our focus on German carmakers (the hype and reality), this article takes off where our last one ended.

We’ve previously looked at how German automakers are lagging behind in terms of electric vehicle (EV) technology and what they have to offer in terms of electric cars at this moment. We’ve also seen that part of this problem is that the main car manufacturers focused their efforts in the 1970s on diesel, bringing them to the top of today’s auto sales the hill. Sadly, that hill is on fire and everyone is jumping into the serendipitous electric vehicle (EV) bandwagon to escape. Although late to the game, the German carmakers today do spend a lot of money in the electric vehicle industry, more than anyone else.

Spending Money, Preparing For The Future

It might have taken a while, but it sounds as if German carmakers are finally moving forward with the electrification of their offerings beyond lip service, beyond the lip service they have offered for the past decade. For years, German automakers were often ridiculing electric vehicles (EV), promising and then removing them, downgrading them to simple hybrids — you name it, we had it. But by now, German carmakers have had time to see that consumers still demand EVs and society is heading in that direction faster than ever before and with more need than ever before. No matter how you look at it, our tired old transportation scheme needs a welcome boost to morph into the modern mobility world we deserve to see.

The German economy has been more or less the economic envy of the world for decades. It was able to weather storms of the automotive industry in the late 20th and early 21st century and has had time to plan for its automotive future. Its automotive products are very well established globally and the country and its people worked hard for that. Today, Germany is one of the last strong automotive economies around the world, but it desperately lags in one area, that of electric cars.

Germany has spent decades investing in diesel and that route is now closing, leaving the carmakers with the job of figuring out how to finally move on. This gave other smaller carmakers a chance to bring new designs and challenge traditional, bigger auto producers. Can you think of any EV leaders that might be giving German automakers a run for their money?

It’s funny to think that after first ridiculing and then downplaying and then copying the sector, the German car industry is finally talking about serious electrification goals — this time, in more concrete terms than ever. Rightfully so, since the reality of things is that today, the Renault-Nissan-Mitsubishi Alliance is the leading global EV producer and sales winner. And that’s with them doing it in a discreet way, unlike the style of German carmakers. It all boils down to today’s reality — there are relatively few German EVs on the road, save for BMW’s i3.

Image by Jesper Berggreen

Germany Is The Biggest EV Investor

Today, a recent report finds that German automakers are actually the biggest electric vehicle investor globally. That repercussion should sink in and translate into EV growth.

In two years alone, Volkswagen, Daimler, and BMW spent €4.7 billion on EV technology. Compare this to U.S. automakers, where only €335 million was invested, or Japanese automakers’ €19 million.

And from the biggest 16 manufacturers from the past two years, Germany benefited from €3.2 billion ($3.9 billion) of investments in EVs, not only surpassing the €887 million invested into EV facilities in the United States but also the €990 million spent in China.

Peter Fuss, a specialist from the consultancy EY, said on Phys.org: “The importance of electric-powered cars will grow considerably in the medium term.” Essentially what this does is finally force automakers to spend more money on research and production development.

Germany Needs China, As Do The EU & The US

No matter how you look at it, everything points to China. Since EVs are selling more there than anywhere else and are backed by a local energetic government promoting more “new energy vehicles” programs, China is pushing its automotive market towards EVs.

As far as VW’s latest diesel scandal rearing its ugly head, the company is spending close to €2 billion converting two factories to produce EVs in Germany in an effort to show it is sincere about EVs. The competition is not sitting idly either, Mercedes-Benz is now planning its own battery plant in the United States. In the meantime, Germany might be slow and pragmatic, but the country is showing signs of becoming aligned with the realities of tomorrow electric mobility world.











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