FRANKFURT – Auto manufacturers have plowed tens of billions of dollars into building electric cars and hybrids to comply with more stringent restrictions on tailpipe releases. Now they face the challenge of selling those vehicles.
& # 39; s the Mercedes-Benz all-electric model at this week's Frankfurt show going to dealerships. Executives said more hybrids and plug-in models were on their way, as part of a wider push to electrify large portions of their lineups.
However, with prices still high and consumer lukewarm demand for electrics, the industry is calling on the European Governments for assistance, asking for tax subsidies and regulatory reforms to make them more affordable, afford the vehicles and appeal to consumers.
"The electric car won't make it natural. The incentives will play a big role," Volkswagen Chief Executive
says. The world's largest automaker has unveiled a new all-electric compact car called ID.3 on Tuesday.
Electricity sales in Europe, which have some of the poorest emission requirements in the world, are still anemic. In the first half of this year, full electric and plug-in hybrid vehicles accounted for just 2.4% of overall vehicle sales in the European Union.
Globally, the market for electric cars remains a small area, but car companies and their parts suppliers say they have little choice but to move most of their research budgets on battery-powered models.
tougher emission policies in Europe, China and the US make it difficult for companies to hit targets for reducing airpipe pollutants. without selling more electrified models. That has prompted many auto makers to pour money into battery technology and build a network of road chargers to support refueling.
Volkswagen, for example, has invested nearly $ 1 billion in Sweden starting Northvolt AB to build a battery factory in Germany.
Profits to auto makers like Daimler and
has fallen under the weight of substantial investment made in electric cars, but companies say there is no alternative.
"We have to invest and we are better placed than some to pay the price. Electric cars do not come for free," BMW Chief Finance Officer
Making an electric car generally costs $ 12,000 more than making a comparable petrol car and consistency has been out of reach for almost five years, according to consulting firm McKinsey & Co . The battery alone costs between $ 5,500 to $ 7,700 per vehicle. Mr. Diess of Volkswagen said.
Without a significant breakthrough in technology, auto manufacturers have acknowledged that they will need to rely on volume and economies of scale to help lower prices.
"There is no doubt in our minds that we need to drive. The costs will go down over the next several years," said Daimler CEO Ola Källenius. "You can't influence exactly what customers are buying." This week's Mercedes brand released the concept for a fully electric version of its flagship S-class sedan.
The International Motor Show Germany IAA 2019 has a special focus on electric cars, such as the Porsche Taycan.
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A Lamborghini hybrid is displayed in the company booth. This is the first hybrid car made by the Italian supercar manufacturer.
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Volkswagen electric I.D. Buzz displayed on press preview day. A BMW Concept 4 electric motor
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A Mini Electronic vehicle, manufactured by BMW. also includes a hatchback from
and the first hybrid model from Italian supercar manufacturer Lamborghini, a
subsidiary – in stark contrast to auto shows in Detroit and New York earlier this year. At US shows, sports-utility vehicles and pickup trucks have taken center stage and fewer plug-in models have made their debuts.
As auto makers sell more models of electricity in the US, many consumers exploit low fuel prices and buy large vehicles that consume more fuel, rather than less.
Many of the latest electric-car models can travel 200 miles or more in a single charge – a great improvement from many years ago when 100 miles or less was more common. The new VW ID.3, for example, will offer a range of 550 kilometers, or 342 miles, depending on battery choice.
But even with expanding coverage, potential customers are still afraid of running the battery on a longer journey and not having a place to plug. As the situation improves and new charging-station networks are under construction in Europe, the steep price of electric vehicles and battery-related distress remain the biggest hurdles, according to sources industry executives and analysts.
Governments in China and the US offer heavy incentives for electric car buyers, but sales of hybrid and plug-in models remain a part of overall sales there.
Porsche's North American President
psychological barriers to making the transition from gasoline to electric are not easily overcome. The barrier involves "an entirely new technology," he said. This week's sports-car maker unveiled the Taycan, a powerful, four-door sedan that runs only on battery power.
That's why the industry is calling on governments to lend a hand.
Audi's board member in charge of sales, Europe said there are still huge patches where drivers can't charge their vehicles on the road.
He called on European governments to follow the example of Norway, where incentives such as consumer tax rebates and free parking, made this the first country to hit a tipping point: More than half its car sales are electric.
"We need to look at Norway," said Ms. Wortmann. "This really small country has shown the rest of the world how it's done."
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