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Late to the party, German carmakers join race against Tesla
FRANKFURT AM MAIN, Sept 23, 2018 (BSS/AFP) – After years watching Tesla’s
electric cars speed ahead while they have been on the defensive over an
industry-wide diesel emissions scandal, German high-end manufacturers have
finally unveiled their first challengers to the Californian upstart.
Mercedes-Benz maker Daimler, BMW and Volkswagen’s Audi and Porsche
subsidiaries between them control some 80 percent of the worldwide premium
car market.
But until recently they offered little battery-powered, zero-emission
competition to Tesla and its bombastic chief executive Elon Musk.
That changed this month, with all three groups unveiling their first all-
electric SUVs slated for release over the next two years.
Audi rolled out its “E-Tron”, BMW its “iNext” and Mercedes its “EQC”,
while Porsche presented an electric coupe, the “Mission E”.
In total, German carmakers have vowed a total of almost 40 billion euros
($46.7 billion) of investment in battery-powered vehicles in the coming three
years, industry association VDA says.
With a market share of around eight percent in Germany — compared with
Tesla’s 0.1 percent — Audi hopes electric cars will account for around one
in three sales by 2025.
“Finally, it’s getting started!” auto industry expert Ferdinand
Dudenhoeffer told AFP.
Time is pressing, as sales of engines powered by automakers’ longtime
growth driver diesel have plummeted in the face of plans by many large cities
to ban them to bring down air pollution.
– Wild ride for Tesla –
The entrance of the three German behemoths into the electric race is far
more consequential for Tesla than smaller fish like Britain’s Jaguar, whose
“I-PACE” is already on sale in the UK.
And the US tech firm faces major hurdles of its own, struggling to stem
losses that have been going on for years while trying to reassure investors
and customers of its chief executive’s mental health.
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Musk was filmed drinking whisky and smoking cannabis (which is legal in
California) with radio host Joe Rogan earlier this month, and in August
revealed he was suffering from intense stress and fatigue in an interview
with the New York Times.
On Tuesday, Tesla confirmed that the US Department of Justice was
investigating the company over Musk’s tweet announcing a plan to remove its
shares from the stock market.
Also on Twitter, the South African entrepreneur admitted Tuesday that
after months spent overcoming “production hell” on the firm’s mass-market
Model 3, it was now in “delivery logistics hell” struggling to get cars to
buyers — while promising “rapid progress”.
For expert Dudenhoeffer, “Tesla is the market leader and has great
strength in innovation, but the coming six to nine months will be a decisive
test” for its chief executive.
“If he doesn’t manage to stabilise the Model 3 and make the firm
profitable, it will get very complicated for him, including with regard to
his investors.”
– Battery gamble –
The German government hopes to see one million fully electric and hybrid
vehicles on the road by 2022, up from fewer than 100,000 at the start of this
year.
But the spread of the technology is constrained by a number of factors,
including a limited range of models for sale, slow expansion of charging
infrastructure and limited capacity for building new batteries.
A government commission on electric mobility recently found Germany would
need to increase the number of charging points available more than five-fold
to serve a million drivers.
And while they are perfecting electric motors and other electric-drive
components, German carmakers have so far balked at direct investment in
costly battery production, aware that they would have to catch up on a head
start enjoyed by Asian industry leaders and unwilling to gamble on an
adventure in the unfamiliar territory of cell chemistry.
European Commissioner Maros Sefcovic said recently that the EU should be
open to state aid for a long-hoped-for “Airbus of batteries”, while business
daily Handelsblatt reported the German economy ministry is cobbling together
a consortium of companies and research institutes.
For now the most conspicuous progress comes from China’s CATL.
The challenger for global battery leadership against the alliance of
Japanese Panasonic and Tesla announced in July a mammoth new factory in
central Germany to supply European customers.
BSS/AFP/HR/1025