German Chancellor Angela Merkel acknowledged that a plan to have 1 million electric cars on the country’s roads by 2020 won’t work out, even as the automakers that make up the nation’s biggest manufacturing sector prepare a slew of emissions-free models.
“The way it’s looking at the moment, we won’t meet that target,” Merkel said Monday at a parliamentary event in Berlin. “But we also know from smartphones and similar things that the adoption of technological developments can suddenly take off exponentially.”
Consumers in Germany, home to Volkswagen AG, BMW and Mercedes-Benz, have been reluctant to buy battery-powered models amid concerns about driving range and charging times. Hybrid and electric cars currently registered in the country numbered 200,000 last year, a tiny fraction in a market of 45.8 million passenger cars.
Incentives introduced last year of as much as 4,000 euros ($4,420) in rebates and some upgrades to existing models like the BMW i3 and Renault SA’s Zoe have helped boost demand, but Merkel’s goal, set in 2011, remains far off. Buyers’ reticence is worldwide: the Renault-Nissan Motor Co. partnership, currently the global leader in mass-market battery-powered autos, has only sold about 425,000 of the vehicles since 2010, versus a target of 1.5 million.
Even so, tightening emissions rules are prompting carmakers to pour investments into the technology. Volkswagen will triple spending on developing alternatives to combustion engines to 9 billion euros in the next five years. The budget at Mercedes parent Daimler AG stands at 10 billion euros. The profound industry changes and pressure on profitability contributed to General Motor Co.’s decision to sell its European business to French manufacturer PSA Group.
Companies are focusing research on meeting customers’ demand for better batteries that will allow cars to travel much further than the current typical range of about 150 miles (240 kilometers). Scrapping quirky designs, Mercedes showed the sleek EQ prototype crossover at the Paris car show in September, part of a new sub-brand that will comprise 10 models by 2022. Volkswagen has said it’s planning to play a leading role in electric cars, targeting 1 million annual deliveries worldwide by 2025.