Electromobility Development of Electric Mobility Until 2030
The automotive industry is going to be electric. But what does this mean for German suppliers of combustion engine manufacturers? Answers to this question are provided by a current study conducted by the IVG.
If electromobility takes roots, it will have a significant impact on the future sales opportunities of the automotive industry.
The German Foundry Chemistry Association asked the Center of Automotive Management (CAM) from Bergisch Gladbach to carry out an analysis of the markets in Germany, the European Union, the USA, and China. Based on the assumption, that the charging infrastructure will be significantly expanded, the 165-page scenario analysis concludes: "E-mobility will prevail and will have serious consequences for the automotive industry in general and the companies organized in the IVG in particular," says Professor Dr. Stefan Bratzel, Director of the CAM. "Especially those companies that mainly supply parts for vehicles with internal combustion engines will face these effects."
The Scenario by 2030
After all, by 2030 almost 30 % of newly registered cars in Germany will be electric vehicles. This corresponds to annual sales of around 900,000 cars. A total of around 6 million electric cars will then drive on German roads. The production volume for combustion engines will decline from 3.2 million vehicles (2016) to just 2.4 million.
“This scenario doesn’t frighten us, it rather boosts our motivation," says Dr. Carsten Kuhlgatz, Chairman of the Industrieverband Giesserei-Chemie. “On the one hand, the result shows that by 2030 still 70 % of the cars will have an internal combustion engine. Secondly, electric engines are also an opportunity for us.” For instance, by improving them with the aid of cast parts or by developing solutions for mounting the batteries. Especially because these non-flammable components constitute an important safety feature. “I firmly believe that Germany, as a traditional leader in innovation, will do a great job and will be able to take over technology leadership with regard to costs and safety standards," says Kuhlgatz.
No Chance to Prevail Without Transformation
Nevertheless, the study concludes that suppliers have to prepare appropriate strategies to adapt and transform their businesses. These include the expansion of their technological know-how, such as about the components required in electric vehicles. Furthermore, diversification strategies including sectors beyond the automotive industry can be suitable to expand their leeway. Finally, companies should increase the depth and breadth of added value in the production of internal combustion engines and thus be among the winners of the consolidation process. “However, in view of the enormous requirements involved in such transformation strategies, companies should not take too long," says study leader Professor Bratzel. Undoubtedly, German manufacturers of combustion engines have to prepare for considerable declines in their market share and sales volumes. Although these developments take place gradually and will only gain momentum at the beginning of the 2020s.
German E-Mobility Is Only Just Beginning
The study also provides a solid overview of the status of the actors involved (Original Equipment Manufacturer, OEM) and the most important factors influencing the development of electric mobility. It is based on several current studies on the subject and uses the CAM innovation database, in which the vehicle technology innovations of the 19 global automobile manufacturers with currently 60 brands are systematically recorded and updated by means of regular surveys and interviews with industry experts.
The study comes to a clear result: In Germany, the volume and growth dynamics of electric passenger cars and plug-in hybrids are low. With around 25,000 new registrations in 2016 and a market share of 0.75 %, the market share is low by international standards. Electric and alternative drives account for only 0.6 % of total production. At the same time, the share of diesel engines in new registrations in Germany and other EU countries is currently declining sharply. However, if this leads to more new registrations of gasoline engines, manufacturers will be under increasing pressure to sell in order to meet the EU's CO2 limits for 2021.
Explanation Video in German Language
Preferences of Potential E-Vehicle Buyers
Reasons for the low acceptance of electric vehicles continue to be their low range, high price and low state subsidies as well as the comparatively small range of products on offer and, above all, the inadequate (quick) charging infrastructure. Users want public charging stations at places where they frequently park their cars. There is a lack of basic services for long-distance transport, which is crucial for weekend and holiday traffic.
"This is why we are calling on the Federal Government to expand the charging station network quickly and consistently and to introduce a standardized payment system for users," says IVG Chairman Dr. Carsten Kuhlgatz. If the network and charging infrastructure were adequate, customers would accept lower ranges. The Chinese government is taking a more consistent approach in this respect.
The international comparison also provides groundbreaking insights. Global production of passenger cars and light commercial vehicles below 6 tons (LCV) has increased from 56 million to 91.6 million (2016) since 2000. CAM predicts this growth to increase to 116 million by 2030. From a global perspective, the automotive industry continues to be a growth industry.
The most important global markets for vehicles by far are still China, the USA and (western) Europe. These markets also remain decisive for the strategies of global automobile manufacturers. However, while the US and European markets will tend to stagnate in the medium term, China holds further growth potential for passenger cars until 2030. Motorization rates are low, with the population's prosperity expected to increase. Especially as the government sets relatively strict standards. In the next few years, for example, there will be e-car quotas for OEMs and a sales stop for combustion engines. China therefore plays a central role in future strategies. If the battery development is on track and the expansion of the charging station network continues to progress at the same pace, the number of e-cars has the potential to rise to 114 million vehicles until 2030. In the long term, India also holds considerable future potential.
The analysis on the "Market development of electric vehicles until 2030: Germany, EU, USA, and China" provides valid data about the future of the automotive industry for the foundry sector. “I was impressed by this assignment," says Professor Bratzel, head of the study. "It shows that the industry is aware of the signs of the times and is preparing for the future."
You can finde the whole study on the website of the Industrieverband Giesserei-Chemie E.V..
But is electromobility really the right way? Or are we driving towards an electric disaster?