In December 2022, another company, ADS-TEC Energy, announced the launch of ChargePost – a compact battery-based charging system enabling fast-charging without depending on the utility’s grid supply. Each such station is equipped with two charging points of up to 300kW DC-based power and offers an alternative solution for locating charging points where a conventional grid-based connection could be expensive or time-consuming.
The wireless or induction-based charging system is finding traction, partly with policy support. With €3.2 million in public funding, the company Electreon, in collaboration with the infrastructure provider EnBW, is setting up a pilot project in the city of Balingen. It will test the feasibility of dynamically charging an electric bus over a kilometer-long stretch equipped with two static charging stations. Notably, this project follows a successful pilot based on the same technology in Karlsruhe.
Localized battery availability, among other components, is a critical prerequisite for automotive suppliers to address the upcoming electric vehicle transition effectively. The German manufacturing space is thus gradually gearing up, with some significant investment commitments underway from battery manufacturers, automakers, and others. CATL’s 8GWh Lithium-Ion plant is the recent one to have been commissioned. Others, such as Tesla, have been in the fray though the global competition for such investments, especially from the US, makes it slightly uncertain for the time being.
The boost in manufacturing is also underway through the automotive companies seeking timely expansion in the production lines. In May 2022, Volkswagen Group launched its second electric vehicle site in Germany at an outlay of about €1 billion. Furthermore, the company plans to set up an electric mobility center in the German province of Lower Saxony by 2026, with an estimated total investment of €21 billion. Reflecting the rising competition in the market, the Chinese electric vehicle and battery company BYD is in the process of discussing the planned acquisition of Ford Motor’s German manufacturing facility. While Ford’s strategic decision is to re-align existing facilities for electric vehicle production, BYD’s planned acquisition, if successful, could add to the competition in the local industry.
The target of 15 million electric vehicles by 2030 is a tall order, considering that so far, the achieved level is at around 1 million. The subsequent growth stage is critically dependent on multiple factors, including the price competitiveness of the electric vehicles, the ease of charging access, and the overall product variety and demand. The economic environment and other external challenges add to the potential impediments to targeted growth.
There are concerns about lowering subsidies at the current stage of growth. The January 2023 decline in electric vehicle registration is cited as one pointer in this direction. Subsidies helped push sales during December 2022, due to last-minute purchases before the reduction of incentives at the start of 2023. The Association of the Automobile Industry projects an 8% year-on-year decline in sales by the end of 2023, primarily concentrated on plug-in hybrids.
The upcoming investment landscape in the German electric vehicle market might warrant deliberate policy attention, considering the competition from other leading markets such as the US. Established entities such as Volkswagen and Tesla are already actively considering options in the US due to the attractive incentives. The rising energy costs in the country are an additional dampening factor for the typical energy-intensive Gigafactory projects in the pipeline. Prospective investors will keenly watch this progress as similar concerns prevail across the European Union.
