The Electro-Party Starts in Germany

Dear Shareholders & Friends,

For a long time, the country in which the combustion engine car was invented snoozed on the subject of electromobility. Today, Germany is stepping on the gas. Case-in-point: the purchase grant for pure electric vehicles with a list price of less than 40,000€ ($44,000) will rise from 4,000€ to 6,000€. For drivers, this means that the entry-level version of the new ID.3, Volkswagen's first pure electric motor in the compact class, is cheaper to purchase than almost all Golf diesel models. With electric cars already cheaper to maintain, e-cars are now also achieving “sticker price” parity in Germany. The “sticker shock” is now a thing of the past.

Additionally, the number of charging stations is to be increased from the current 20,000 to 70,000 by 2021. The State wants to provide up to 3.5€ billion for the expansion of this infrastructure. Finance Minister Olaf Scholz even speaks of one million charging points. That many charging stations are probably not necessary to ensure a nationwide charging infrastructure. The Federal Association of Energy and Water Management (“BDEW”) believes that 350,000 public charging points are sufficient to supply ten million e-cars. After all, most vehicles charge at home or in the car park at work. According to BDEW, the 70,000 normal charging points envisaged by the government as a stage goal could supply around one million e-cars if 7,000 fast charging points were added. The explosive nature of the issue of infrastructure for electric vehicles is gradually disappearing in Germany.

Furthermore, the range of electrically powered vehicles is increasing all the time. The basic model of the ID.3 is already able to cover 330 kilometers (around 200 miles) on a single charge. If ID.3 drivers opt for the largest battery option, the range increases to 550 kilometers. If there are more charging points in Germany in the near future, these ranges should be sufficient.

Electric party gets going

Due to the increased subsidies and technical progress, electric mobility will soon play a completely different role in Germany as well. Even before the German government decided on its package of measures to promote electromobility, the party had already started in Germany. In the past 12 months alone, the number of charging points has risen from 7,000 to 20,000 and the number of e-cars on the road has risen from 53,000 to 83,000. In absolute terms, these are still small figures; however, the growth rates are impressive.

Car manufacturers are also now beginning to follow up their announcements with action. VW has already started production of the ID.3, with deliveries slated to commence in just 6 months’ time. To support adoption by employees, VW will install 4,000 charging stations at its German locations alone. Thomas Ulbrich, member of VW’s Board of Management responsible for e-mobility, commented: “In future, our employees will be able to charge their e-autos easily and conveniently during working hours. In this way, we will show how the step-by-step switch to e-mobility can succeed.”

Tesla's recent announcement that it will build a fourth Gigafactory near Berlin was a big hit. This will give electric mobility a completely different status in Germany.

In conclusion, the significance of the three main bottlenecks of electric cars - high purchase prices, too few charging stations and too short a range - continues to decline in Germany with assistance from strong subsidies and investments from the State. Norway has shown how the topic of electromobility can gain momentum as more than every other newly registered car there is equipped with an electric motor.

For our German-speaking audience:

Recently, I visited Aktionar TV for an interview about electric vehicles and their impact on raw material supply chains. Please watch the video below:

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