Germany Spurs Its Automakers to Produce Electric Cars

Germany is falling in the footsteps of the United States in making electric cars a priority. Chancellor Angela Merkel’s ruling coalition parties pledged this week to spend more than $700 million by 2011 on developing electric vehicles, as it tries to put 1 million electric vehicles on German roads by 2020. Earlier this month, the US Department of Energy announced $2.4 billion in grants to help reach President Barack Obama’s goal of putting 1 million plug-in cars on US roads by 2015.

The German government plans to spend approximately $160 million for testing introduction of electric cars in eight regions, and about $240 million on battery research. “The program is aimed at having a positive impact on investment decisions, give producers security and support the sale of electric cars,” according to a copy of the plan obtained by the Associated Press.

German automakers have been reluctant to enter the hybrid and electric car race, preferring instead to focus on diesel technology as a fuel efficiency strategy. While US and Japanese automakers have a growing list of electric cars expected to hit the market in the next two years, Volkswagen, Daimler and BMW have been relatively quiet.

Volkswagen, the country’s largest automaker, hopes to produce its first electric cars in 2013, but has not revealed specific product plans. “Our focus in the future will be directed more strongly at making electrically powered automobiles alongside ones driven by more efficient combustion engines,” Volkswagen Group CEO Martin Winterkorn said last year, when the company announced a partnership with Japan’s Sanyo Electric Co. to develop lithium ion batteries.

Daimler has demonstrated an electric version of the Smart ForTwo and unveiled its BlueZero concept vehicles, and BMW is currently leasing about 500 electric Mini Cooper prototypes (with some problems reported).

Still Just a Plan

“One million cars by 2020 is an ambitious but entirely achievable goal,” said Theodor zu Guttenberg, economy minister, at yesterday’s news conference. “We’re taking steps to ensure that Germany’s automobile industry will preserve its leading role, that’s why progress in this area is important.”

Yet, the German plan already is meeting resistance. “At first glance this sounds rather like a nice PR story,” Gregor Claussen, an analyst with Commerzbank, told Forbes. “But more will have to follow. Without the help and the right framework from the politics, it will not work.” The plan is still vague, leaving uncertainty about future financing, and no details about consumer incentives for potential electric car buyers. Guttenberg said financing would be a question for the government that emerges from Germany’s Sept. 27 election.

Some analysts believe the plan doesn’t go far enough. “Keeping in mind that this year alone about 3.7 million cars will be sold in Germany, the 1 million additional sales will have only a minor effect,” Heiko Moehringer, an analyst with LBBW, told Forbes.

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  • Anonymous

    More bad ideas sponsored by government:
    For the next 20 years a Plug-In car is a coal burning car, and we will have to burn even more coal to charge those cars.

  • Anonymous

    Interesting… Then I’ll consider any Plug-in car that I purchase/own as a nuclear car or a wind car.

  • Optimistic Dude

    It appears the world’s supply of lithium for battery production is sufficient and readily available. I suppose Bolivia, with half of it in their control, will surely get their ducks in a row to capitalize on their natural resource. Why wait?

  • TD

    Get the facts about the so called lithium supply. Lithium supply is abundant and only a fraction of lithium production goes towards battery production. Much more of it goes toward processing ceramics, glass and aluminum than towards battery production.

  • sean t

    You’re wrong saying that we’ll burn even more coal. The efficiency of generators in power plants are better than the ICE in cars. So even if generators run on diesel, it’s still better. . .

  • Malaysian Plug-in Hybrid Advocate

    “Without the help and the right framework from the politics, it will not work.” That’s my point.

  • Lost Prius to wife

    Malaysian Plug-in Hybrid Advocate, I remember you stating previous that you felt your government did not provide enough, if any support, on this issue of hybrids and that you wish they did. Well, maybe the “silver lining” to your “dark cloud” is that your government will get to see first hand how our governments succeed (or fail) with their efforts and avoid the pitfalls. Of course, that is if you and your countrymen can get your government to act properly after seeing what programs will be successful for your country.

  • Lost Prius to wife

    I just checked GM’s Flextreme site. I am willing to bet that it may beat the 0.25 Prius coefficient of drag. It also looks like a very practical vehicle. It will be interesting to see if it really does make it to state side. And whether or not it is offered in multiple versions (gas hybrid, diesel hybrid, EV, etc.).

  • sean t

    The overall shape looks similar to Toyota Hybrid-X concept car, IMO.

  • two cents per mile

    Regardless of what analysts are saying now, electric cars are a really powerful tool for bolstering a national economy, and creating a nation infrastructure which is independent, strong, efficient, and sustainable. I wish we saw bigger pushes for electric cars in the United States instead of programs like ‘cash for clunkers’. To learn more about the advantages of electric cars, and the way they could bring us out of a recession while saving the economy, check out the book “Two Cents Per Mile” by Nevres Cefo. You can learn more about it at or read excerpts and reviews of it at