The Future of E-mobility
Good morning ladies and gentlemen,
It is good to be back in Washington DC and to be here all with you at this event.
When I arrived in town Sunday evening, the political landscape in Germany had changed fundamentally. Green is the color of the season. And this is much about the issue we’re talking about today: the transition towards a low-carbon energy and transport system.
Let me first extend my thanks to the German Embassy, the Transatlantic Climate Bridge and the team around Friedo Sielemann who have put together this event. I’m aware that the Embassy is doing an excellent job in its effort to connect climate and energy experts from both sides of the Atlantic, and I would like to congratulate Ambassador Scharioth for his ongoing engagement. Let me also thank the Representative of the German Industry and Trade for his support of today’s event.
Challenges to the Auto Industry
Headlines like “Obama Ends the Gas Guzzler Era” (truly a strong annunciation) indicate that automobile manufacturers are experiencing a substantial challenge that will require a profound transformation of the industry. I’m not talking about the usual business cycle. The real challenge is about climate change and the need to drastically reduce emissions, while at the same time global request for mobility will rise, oil reserves are shrinking and oil prices climbing. It’s about the heavy burden car traffic is adding up to many cities and millions of people being trapped in traffic jams every day. All together, these fundamental tendencies will bring about a major change in mobility-patterns.
The car industry’s proven recipe for success – building ever larger and more powerful cars – has become an outdated model. It doesn’t fit into times of oil crisis and climate change. The present car-based traffic systems simply cannot be extended to another two or three billion people around the globe.
Before that backdrop, the race to introduce electric vehicles is on. E-cars will help to cut emissions and to reduce our dependency from oil. In combination with renewable energies, electric vehicles will make an important contribution to meet climate targets around the world. Without implementing a new concept for e-mobility, Germany will hardly meet his goals to reduce emissions by 40% by 2020 and by almost 95% by 2050 (compared to 1990 levels).
Electric vehicles, however, are only one part of a much broader approach towards sustainable mobility. We need the combination of mutually reinforcing elements.
1. Cars have to become climate-neutral. Electric cars will play a major role for this.
2. It will not be enough to merely replace the internal combustion engine. The “green car of the future” must be embedded in intermodal transportation concepts that will permit easy going changing modes of transportation. Electric passenger must be one part of a holistic, systemic approach to sustainable transport and energy sectors; other parts include demand side management via smarter city planning and land use planning, promotion of walking and biking, including e-bikes, light rail, and trains.
3. The “green car of the future” must be associated with new patterns of use. Instead of owning one car for averaged eight years and use it for all transport purposes, people will use several mobility services at once without owning them, but paying for a short-time use. The auto industry will need to shift its business models from selling cars towards offering mobility services. New actors will be entering the scene, such as mobility contractors, car sharing companies, utilities, IT companies and public transportation authorities. They all are called upon to shape the evolution of new transportation services.
Advantages of electric vehicles
Within this broader approach of sustainable mobility, electric vehicles play a key role. Here you have four main arguments in favor of e-mobility:
1. Car traffic is causing approx. 14% of CO2 emissions in Germany (in the US the rate is much higher, probably around 30%). Substantial climate benefits can, however, only be gained when electricity is generated from renewable sources.
2. Driving electric cars will reduce our dependency on oil. In addition, electro-mobility will stabilize our energy supply. Battery electric vehicles will help improve grid efficiency. The use of vehicle batteries for storing electric power during periods of overshooting supply will contribute to a balanced flow of electricity from renewable sources by smoothing out production peaks and aligning production and load curves more closely. Vehicle batteries can mitigate adverse fluctuation effects and will facilitate the continued expansion of renewable energies.
3. E-mobility will provide new economic opportunities. In the area of renewable energies, Germany has managed to become a lead market in the world. We have set ambitious targets and implemented policies that have attracted investments, ramped up renewable energies, and created more than 350,000 new jobs. Increased resource efficiency and large scale development of renewable energy technologies have moved German businesses into highly competitive positions in global markets. Germany’s ambition is to become a lead market for E-mobility, too. Green mobility will be crucial for the competitive capacity of Germany’s famous car industry. And technology-leaders like Siemens or Bosch will play a major role in the supply business.
While combustion engine – vehicles will still account for the bulk of new cars added to the global vehicle fleet over the next years, the market share for e-cars will raise more quickly than predicted. Progress in battery technologies and the use of light materials – like carbon fiber - will speed up when more and more research teams join the global competition to expand the cruising range of electric vehicles and to bring down costs.
4. E-mobility will increase the quality of life in our cities: Microclimates in urban centers today are heavily impaired by exhaust, sooth, fine dust and noise from traffic. Switching to e-mobility will reduce these emissions, it will re-value the public space and make cities a better place to live and work.
The German National Electromobility Development Plan
In order to stimulate new technologies and mobility concepts, Germany has passed a National Electromobility Development Plan. It aims to speed up research and development in battery electric vehicles and their introduction in Germany. The objective is to have at least one million electric vehicles operating on Germany's roads by 2020. From a green perspective, we should do even more. Two million electric vehicles is an ambitious, but realistic aim for Germany by 2020.
Cornerstones of the national plan are:
Pilot Projects: In the short term, we can begin the shift towards electro-mobility through demonstration projects and field tests. The federal government has launched pilot projects in 17 cities and regions. The citizens of Berlin can already rent cars with an electric drive at major stations. The city of Stuttgart operates hybrid buses, run by an electric motor in addition to a diesel engine. The first plug-in hybrid and battery electric vehicles can achieve market maturity in very few years. The battery charging infrastructure will have to be built up gradually, starting at local or regional level.
Involvement of all stakeholders: Electric mobility cannot be successful unless all stakeholders play their part. The automotive industry, energy suppliers, academia and civil society are incorporated into the German National Platform for Electric Mobility and provide advice to the government on the development of a comprehensive program.
Standardization: Drive and battery technology, charging infrastructure, materials and recycling systems have to become standardized. This is clearly a political task – governments & parliaments have to establish a common legal and political framework, also including education and training.
Sufficient Funds: In Germany, the government’s Second Economic Stimulus Package includes a total of 500 million Euros for research and development on electric mobility to be spent from 2009 to 2011. Complementary, the public and private sectors will spend at least two billion Euros on innovative drive technologies over the period to 2016.
It remains a controversial issue, if and which kind of additional financial programs are required to stimulate electric cars being introduced in the markets. From my point of view, we should not channel tax payer’s money to those who are willing to buy an electric car. It would be more effective and socially fair to restructuring the vehicle tax based on pricing emissions: high taxes for high polluters, low taxes for low emissions.
Charging facilities: For the successful market introduction and dissemination of electric vehicles, it is particularly important for charging facilities to be organized for simplicity and cost-efficiency. The aim is therefore be to set up an infrastructure that allows for charging electric vehicles at home and en route.
The use of renewable energies: When using the current average electricity mix, electric vehicles have only a small advantage in terms of CO2- emissions over efficient internal combustion vehicles. However, renewable energies can transform them into virtual zero-emission vehicles. This is not a too ambitious goal. In Germany, electric vehicles will account for a relatively small share of total electricity demand. One million all-electric cars, for example, would take up approximately 0.3% of total power demand. Replacing a third of today’s total car traffic by electric operation will require about 5% of present gross electricity demand.
To pave the way for a broad introduction of electric vehicles we need to take a variety of policy, regulatory, technical and infrastructure measures. Open European standards will need to be set, for example, to ensure interoperability, safety and acceptance at a high level.
Transatlantic cooperation would also help to advance the issue, be it between national governments in the Transatlantic Energy Council or between US and German states and cities. One promising example could be enhanced cooperation between the sister cities of Los Angeles and Berlin on introducing e-mobility.
Outlook: Electric mobility is a paradigm shift
Electro-mobility means nothing less than a paradigm shift for the transport and energy sector. If electric cars prolong the use of dirty coal or risky nuclear power, if they charge at peak demand times, if they only add additional cars onto our already crowded streets, then e-mobility can run into serious troubles. That’s a challenge not only to politicians, but even more so to the industry. It is therefore crucial to put electric vehicles in a wider concept of restructuring our energy and traffic systems.
Sustainable mobility is not just about replacing gasoline by electricity. Basically, it requires the reduction of car traffic in favor of public transport, even if cars run on renewable electricity. Interestingly, a growing number of young urban professionals don’t see cars as a status symbol and favorite personal property. They just are going to hire a car when necessary and pay for the time and distance they are using it. This is about cultural change which has to accompany the technical revolution.