E-mobility, meaning the use of electricity to power
vehicles, replacing fossil fuels for transportation has become a hot policy
issue in Germany which is already going through an economic crisis not seen
since the WWII. The deadline year of 2035 for e-mobility has aggravated the situation.
German car manufacturers are up in arms as regards to the unjustified demand by the Federal Government for the change over from Internal Combustion System (ICE) to Electronic Vehicle (EV) that spells doom for the manufacturing of world famous brands such as Volkswagen, BMW, Mercedes-Benz, Audi, Porsche and legendary Opal.
Recent closure
of the historical Dresden Volkswagen Plant after almost 9 decades of operation
should be an eye-opener to policy makers and strategy analysts. Although e-mobility
as an economic concept is laudable, naming C2 emission as major adversary for
Germany cannot be justified. After realizing the impossibility of fully
operational e-mobility regime the state has to come with either postponement of
the deadline or begin massive retrofitting
operation where the present engine-fuel system is replaced by installing
an electronic system that includes electric motor, batteries, controller, and
charger.
This is going to be colossal exercise. Apart from
the capital cost involved gaining acceptance from the ICE owners to transfer their
tested vehicles to EV would be an arduous task. Most owners and drivers would
cling to the present ones rather than going for an EV. In the public opinion
surveys it has been found that most of them prefer EV as an additional mode of transport rather than
the solo one parked at their garage.
Yet another issue is persuading people to buy new
EV rather than retrofitting. This got into hot water due to premium price they are called
upon to pay for acquiring new EV which is mostly imported from China and
USA. Psychology also mars the use of EV for regular travel. There is a
dichotomy in owning one thing and using it. Most would prefer to buy an EV as
investment asset to be used occasionally and sell whenever profitable.
True, EVs are good at passenger mobility; what about their use in freight transportation.
Moreover an ICE Motor Wagon can be used for dual purposes: passenger mobility
and carriage transport. Another moot point
is about long-overhaul where across the country travel is opted for in family tours
and excursions.
Even though EV demand is trending high while ICE is
slipping in sales the overall picture emerging from the markets demoes that both
petrol & diesel driven vehicles have 38% of market share in comparison to
EV which trails in the region of 33%. Sports enthusiasts and macho men would rather prefer clinging to
their proven assets rather than go for an untested EV.
The overhang is already evidenced in the EV imports
statistics for Germany. At the time of writing both the volume and Values of EV imports have declined by
almost 40%.
Policymakers need to wake up now! Strategy amid geoeconomics
dictate that they abandon e-mobility 2035 and opt for a balanced regime
where ICE & EV go hand in hand.
Cheers!
Muthu Ashraff Rajulu
Strategy Adviser
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Strategy Adviser
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