German motor executives have called on the government to take “urgent steps” to increase demand for electric vehicles as the production of Volkswagen’s first mass-market battery-powered car began on Monday.
Speaking at the opening of the ID.3 assembly line in Zwickau in eastern Germany, Angela Merkel reaffirmed a commitment to spend €3.5bn on installing 1m charging points across the country over the next decade and to broaden subsidies for electric vehicles.
But the chancellor is under pressure to bring forward this target date, with VW embarking on the most ambitious foray into the electric-vehicle market by any carmaker to date.
In the aftermath of the diesel emissions scandal, the world’s largest carmaker has been attempting to reinvent itself, with a promise to produce 22m electric cars by 2028. But Volkswagen, which will start to sell the ID.3 hatchback in Europe next year for about €30,000, is under severe cost pressures and is counting on support from Berlin.
The group’s chief executive, Herbert Diess, stressed the need to agree on “concrete measures very quickly”, ahead of a meeting between German carmakers and the Merkel administration on Monday night, while Stephan Weil, the minister-president of Lower Saxony and a member of Volkswagen’s supervisory board, called for “a clear commitment to 100,000 public charging points by 2021 at the latest”. Germany currently has roughly 21,000.
“These days a lot is said about the decline of the German industry — whether this materialises depends on us,” Mr Diess warned. “It is not a question of whether there will be a [systemic] change to electric mobility, but how quickly, and which part of the world will be first.”
Zwickau is set to become Europe’s biggest plant making battery-powered cars, producing 330,000 a year, and is a key part of VW’s efforts to ensure that its fleet complies with strict new EU emissions regulations.
Roughly €1.2bn was invested in converting the plant, which was famous for its production of the communist-era Trabant, and latterly some of VW’s best-selling cars, including the Polo, Golf and Passat. Seven more VW factories in Germany, the US and China will be turned over to emissions-free vehicles over the next couple of years.
“We are facing an extremely demanding time for the German automotive industry, which must be actively supported politically,” said Mr Weil. “Customers will only opt for an electric vehicle if there are enough charging points in the foreseeable future.”
He also called for German tenancy and residential property laws to be changed, to make it easier for charging points to be installed.
Thomas Ulbrich, the Volkswagen board member responsible for the company’s new electric range, called for an industry road map for the next “one or two years” from the government.
VW also faces a battle to secure enough batteries for its expansion.
“In a couple of years’ time, VW will need more batteries than the entire global capacity today,” said Arndt Ellinghorst, an analyst at Evercore ISI, noting that the carmakers’ plans to build its own battery plants would only fulfil a fraction of its demand.
Mr Ulbrich said that VW had battery capacity in place for production until 2022/23.
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