BayernLB

E-mobility

It has not yet been decided whether vehicles of the future will be purely electric or whether the automotive industry will have to juggle a combination of several drive technologies in the long term. It is certain, however, that human mobility is fundamentally changing, and companies must adapt their strategies and business models accordingly.

A glimpse into the future: automobile manufacturers like BMW are working vigorously on designing the mobility of the future.

Wanted: climate-friendly mobility

Worldwide, solutions are being sought to curb emissions of pollutants that are harmful to the climate and health. There is also a focus on the transport sector, and in turn the automotive industry, here. This sector is a major contributor to emissions of pollutants (nitrogen oxides, particulates and CO2).

Video: From a rocky start to hot-shot? Dr Jürgen Michels, chief economist at BayernLB, on the present state and future of e-mobility

The ultimate target? The fossil fuel combustion engine

Many (political) actors regard the electric motor as an opportunity to achieve the aim of decarbonising mobility. Against this backdrop, the limits for pollutant emissions are continuously being tightened worldwide. Some countries are even considering banning combustion engines altogether in the long term.

The following countries have already specifically announced such a ban:

  • Norway (for 2025)
  • France (2040)
  • Great Britain (2040)
  • India (2030)

Demand for electric vehicles disappointing

The German automotive industry is now increasingly moving towards e-mobility. At the same time, the sales figures for electric vehicles are below general expectations, despite the rising sales. The everyday performance of electric cars is currently still poorer than that of cars with a combustion engine. The reasons for this are as follows:

  • Low range
  • Long charging time
  • Poor charging infrastructure

In addition, the CO2 footprint of electric vehicles can only be as good as the energy mix used to generate the electricity allows. The automotive industry, one of the key industries in the German economy, therefore finds itself caught between the conflicting priorities of political objectives, customer interests and technical/financial constraints.

A challenge for the automotive industry

The path out of this conflict between political will, customer interests and feasibility constraints entails a significant financial outlay and high risks for the automotive industry:

  • Financial risks: While political decision-makers are pushing for electric mobility, the take-up of electrical vehicles by consumers is still lagging far behind. This means high investments against uncertain market success.
  • Technological risks: It is still hard to predict which e-mobility concept (fuel cell or battery) will prove successful. A further factor making things harder is the fact that China is becoming a global leading market for electric vehicles and setting the standards for the future. Supplier companies must tackle the question of which of their products will lose demand as a result of the transition to electric mobility or even become superfluous. At the same time, it cannot be ruled out that progress in fuels (synthetic fuels) will open up new prospects for the combustion engine.
  • Risk of decline in significance: Electric mobility will primarily be spread through mobility services in metropolitan areas. To compete for its future position in the value-added chain, automotive manufacturers must therefore face innovative companies in the internet and technology sector with large amounts of capital behind them.

One thing is for certain: It could all change

It has not yet been decided whether vehicles of the future will be purely electric or whether the automotive industry will have to juggle a combination of several drive technologies in the long term. It is certain, however, that consumers' exspectations regarding mobility are fundamentally changing, and companies must adapt their strategies and business models accordingly.