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The automotive industry in Germany. Development of energy efficiency

Why is Germany as a global leader in the automotive industry not a global leader in the usage of energy efficient automobiles?

by Daniel Bierbrauer (Author) Alexander Schneider (Author)

Seminar Paper 2015 23 Pages

Sociology - Economy and Industry

Excerpt

Content

Content of Tables

Content of Figures

List of Abbreviations

1 Introduction

2 Energy efficiency and current technology of e-mobility
2.1 Energy efficiency on an Global, European and German level
2.2 Electric cars and the today’s powertrain portfolio

3 Different perspectives to look on the German automotive industry
3.1 Economic Perspective6 3.2 Environmental Perspective
3.3 Political Perspective

4 Rolling up the field from behind?
4.1 Comparison with France
4.2 Comparison with USA.

5 Critics and Conclusion

6 Bibliography

Appendix

Content of Tables

Table 1 : Examples of environmental cost of traffic

Table A 1: SWOT analysis for the e-mobility in Germany

Table A 2: Comparison of electric vehicles with other fueled vehicles

Content of Figures

Figure A 1: Energy prices based on consumer groups 1990-2011

Figure A 2: The Today’s powertrain portfolio of vehicles

Figure A 3: PHEV and PEV units sold by month (Netherlands: Sept 2013-Sept 2014)

Figure A 4: Summary of electric vehicle promotion actions across major U.S. cities

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1 Introduction

Over the past 40 years one can observe an evolution of “environmental concern” in several areas. Baker (2003, pp. 767) calls this transition evolution from environmentalism to green. There is a shift from emphasizing environmental problems to the underlying problems with our social, economic, technical or legal system. Further, the geographical focus changes from local problems to global issues. There has been a gradual change in the attitude towards business. From the business as the core of the problem to the business as a part of the solution to problems can be observed as well. So we see a movement towards broadly based, rather than fringes of society, ideologies about the environment.

From a marketing point of view one can observe the emerging importance of green awareness in the media during the late 80s as Peattie et al. (2005, pp. 358) describe it. They argue that a change in consumption behaviour of consumers led to the reaction of the producers. Moreover, they assert, that since the early 1990s, more than 85% of the multinational companies in Europe have adapted themselves to this green movement by changing their way of production for instance. In this connection, not just specific sectors in the European economy have been affected by this adjustment process, but almost every line of businesses.

Kemp et al. (1998, pp. 179) denote technological change as a possible solution to some negative environmental effects. In the same context they add that new technologies also may introduce new environmental issues, such that the strategic management towards sustainability became increasingly important. They also have a minor practical concern about future development of technology and say that different factors (infrastructure, maintenance, production and demand factors, even cultural or psychological factors) not only have an impact on new technologies but they also influence each other which makes a broad analysis quite difficult. The adaption of environmental aspects takes usually place after a certain production efficiency (learning curve) level has been achieved. These environmental aspects, however, are already part in the technology process due to the green evolution just described.

It becomes clear that an enormous change in the thought on a broad public basis has taken place in the past decades. This process is not finished, but is still evolving. As the 70s environmental movement was carried out by only a friction of society, but today it is more or less standard thoughts that environment has a certain importance that cannot be ignored. Therefore this paper will not only focus on the e-mobility and the evolution of electric vehicles, but it will also discuss environmental issues that are closely connected to the green movement. For a better understanding, we fragmented this paper into four different sections, structured as follows: the second chapter will aim to provide a brief overview of the environmental aspects, related to the topic mentioned above. In doing so, it will not simple discuss these aspects on a national level but also on a European and global level. Chapter three subsequently deals with the technology of the e-mobility. Chapter four will focus on exploring which economic, environmental and political aspects are connected with e-mobility and environmental concerns in Germany. To gain an international comparison, this chapter contrasts Germany with France (for a comparison on a European level) and the U.S.A. (for a comparison on a global level). This should enable the reader to know where these countries stand concerning sales of electric vehicles, political action and infrastructure of e-mobility. The paper will be finalised with a conclusion, which also encloses a short summary.

2 Energy efficiency and current technology of e-mobility

As shown by an article called “Energieziel 2050” the German Federal Environmental Agency adapts itself to certain conservation aims that have to be reached by 2050. The main challenge of the German industry and policy will be to lower the CO2 emissions by 95%, followed by minor goals concerning energy savings and production. This rethinking was not least suggested through the so-called Kyoto Protocol, the first international agreement dealing with the consequences of climate change (United Nations 1992). The importance of this agreement can be seen by means of the relative quick implementation into the national jurisdiction in Germany, where the main goals of the Kyoto Protocol were already implemented in 2002 (Bundestag 2002). The aims are in line with the major governments around the world, such as the U.S.A., China, Japan or Europe. All have ambitious targets reducing CO2 emission for cars to less than 100g C02/km by 2020 (ARF&McKinsey 2014, pp. 14).

Looking globally on the market shares of electric and hybrid vehicles compared to total auto sales, an enormous diversity across countries can be observed. Whereas, Germany’s share in 2012 (2013) was 0.1% (0.2%), France had a share of 0.5% (0.8%), the U.S.A. 0.8% (1.3%) and Norway had 3.3% in 2012 and 6.1% in 2013 (Mock und Yang 2014, p. 3; ARF&McKinsey 2014, p. 10). This indicates that nowadays the car manufacturing capacity has little to do with the home market of the vehicles produced. Despite the fact, that Germany is not a leading producer of electric vehicles yet, estimations for 2015 predict a German production of just 50.000 electric vehicles, whereas France (82.000), China (110.000), the U.S.A. (240.000) and Japan (280.000) will produce together approximately 700.000 (Wirtschaftswoche 2010). More recent figures such as published by KPMG (2015, p. 18) point out a global production of 2.6 million EVs in 2014. This is a huge divergence compared to the estimations in 2010 and gives a hint about the vast growth of this sector.

This paper will mainly focus on the electricity drive technology and the associated environmental issues. In this context, we will keep the focus on electric vehicles and compare these with traditional fuelled vehicles when needed. In addition, we will exclude certain energy mixes or other technologies, namely biomass (E10, rapeseed oil). Rapeseed oil and E10 can also only be used as fuel-portfolio additives, but due to resource limitations they are of minor concern (Melaina und Webster 2015, pp. 3866). Hence, we will focus on electro drive technology in three dimensions: economic, political and environmental dimension. Furthermore, we will focus on Germany and will make comparisons on bilateral level and global level to illustrate the current development in Germany.

2.1 Energy efficiency on an Global, European and German level

Nowadays there exist many agreements to reach the global aims of the CO2 reduction due to the political willingness with regards to the reduction of CO2 emission around the world. During the last few years one can recognize an increasing energy consumption in the emerging markets, especially in Asia with the strongly growing economies of China and India (BP 2014, p. 5). With regards to this development the future challenge has to be the reduction of the energy consumption and the CO2 reduction. Therefore, more than 190 countries signed the Kyoto Protocol in 1997. As already touched upon, the protocol deals with climate change. In doing so, the record is based upon the principle of a common but differentiated responsibility regarding the greenhouse effect for the participating countries by economic strength (Bundestag 2002).

It puts the main burden of diminishing current emissions on developed countries based on the principle that they are historically responsible for the current levels of greenhouse gases in the atmosphere. In addition, they have already made the transformation process to developed countries so that developing countries should reduce their emissions later in the future. That’s why the Kyoto Protocol requires primarily the industrialized countries to reduce their emissions of greenhouse gases, most notably CO2 from fossil fuel combustion (Zentrum für Europäische Wirtschaftsforschung 2003, pp. 9). The Kyoto Protocol was the first agreement of its kind and an important step towards global CO2 abatement and the worldwide fight against global warming.

In Europe, there exists a high level of technological and environmental awareness. For this reason a relatively low CO2 emission level can be measured in Europe. With the implementation of the EU Energy Strategy 2020, the EU attempts to ensure sustainability, competitiveness and security of supply in the whole energy sector. The EU wants to reach an efficient use of energy, which leads to energy savings of 20% by 2020 as well as a secure and affordable electricity for citizens and businesses. Furthermore, the Energy Strategy 2020 should support the implementation of a technological change and create a strong international partnership within Europe with regards to the CO2 abatement (European Commission 2010, pp. 8).

The average German CO2 emission of vehicles amounts to 151.2g CO2/km and is significantly higher than the European average CO2 emission with 140.5g CO2/km. Furthermore the national stock of electric vehicles driven underlines the retrogressive global position of Germany (Bauernhansl 2014, pp. 162). The future challenge for Germany is the reduction of the CO2 emission keeping the responsibility for the leading automotive industry in mind. In the last years, the German government concluded some agreements which should improve the energy efficiency in the automotive as well as reduce the CO2 emission. One of the main aims is the increase of the number of electric vehicles (EVs). There should be 1 million EVs until 2020 and 6 million until the year 2030. A further key goal is the reduction of the CO2 emission by 80-95% by the year 2050 (Umweltbundesamt 2010, p. 135).

2.2 Electric cars and the today’s powertrain portfolio

Electric mobility relates to electrification of the automotive powertrain. There are several powertrain alternatives under development, with different electricity storage solutions and different drivetrain possibilities. In the last decade, Europe has gone through the initial adoption phase of electric mobility. After a research-intensive period, it is now possible to express a clearer view on the development of electric mobility. With respect to the enormous research efforts during the last decades, five different electric powertrain types have developed. For this reason, it is important to give a definition of all types of EVs. This includes plug-in hybrid EVs (PHEVs), range-extended EVs (REEVs), battery EVs (BEVs) and fuel cell EVs (FCEVs), but excludes (conventional) hybrid EVs (HEVs) (ARF&McKinsey 2014, p. 7).1

The HEV represents just one of the electric vehicle developments. It is a hybrid electric vehicle, which drives with a combustion engine and an e-motor. The HEV is a classical internal combustion engine with an electric motor (ARF&McKinsey 2014, p. 7). Furthermore the battery can be recharged by recovering braking energy. Hybrid cars will play a significant role in the near future in the transmission process towards electric cars. They will have a major positive impact on the electricity storage technology as their market share will increase rapidly in the next decades (Umweltbundesamt 2010, pp. 33).

The PHEV (Plug-in Hybrid Electric Vehicle) drives with a combustion engine and an emotor plus plugs to recharge the battery. It has an electric motor with rechargeable battery and a combination of classic combustion engine and electric motor, which is used in cars and commercial vehicles. The BEV (Electric Vehicle with Battery only) offers a high potential for CO2 reduction by using renewable resources by driving with e-motor only and storing the energy in a battery. The FCEV (Fuel Cell Hybrid Electric Vehicle) represents Fuel Cell only technology, where the car drives with an e-motor and stores the energy in hydrogen. A disadvantage of the FCEV is that this technology is still very expensive compared to HEV or BEV. Another electric orientated energy efficient powertrain technology is named REEV (Range Extended Electric Vehicle). While with ICEs, PHEVs and FCEVs the engines are used to recharge the batteries and as a powering unit, the REEV is the first method which works by driving with e-motor only. The REEV has two important advantages. First, it offers a range extension with small ICE or Fuel Cell just to recharge the battery and secondly there is a high potential for CO2 reduction by using renewable resources (ARF&McKinsey 2014, p. 7).

The major current restriction for the rapid development of the electronic car industry is the battery technology. This capacity constraint leads to high costs and a low operating range which in turn are important decision variables for the consumer (Umweltbundesamt 2010, pp. 29). The Bundesministerium für Wirtschaft und Technologie (2013, pp. 7) even plans an increase of EVs from 6.600 in 2011 up to 6.000.000 by 2030 as already mentioned. However, to reach this target based on current technology and prices, the government will need to set high incentives which will be part of upcoming paragraphs. From this perspective, the government already demonstrated that such a subvention in a certain industry, namely the photovoltaic industry, stimulates domestic demand in the favoured manner. The EEG-levy stimulated domestic demand and the experience gathered on this topic could be used to construct a subvention tailored for the electric car industry.

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1 For the interested reader there is more material in appendix Figure A 2 and Table A 2: Comparison of electric vehicles with other fueled vehicles where all types of EVs are presented in detail.

Details

Pages
23
Year
2015
ISBN (eBook)
9783668245877
ISBN (Book)
9783668245884
File size
1.5 MB
Language
English
Catalog Number
v334424
Institution / College
University of Trier – Chair of Environmental and Urban Economics
Grade
1,0
Tags
energy efficiency automotive industry e-mobility environment electric vehicles

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Title: The automotive industry in Germany. Development of energy efficiency