Frankfurt show shines electric light on auto futures
September 12, 2017
Automakers at the Frankfurt car show, IAA, have been highlighting their e-auto credentials and distancing themselves from Dieselgate. But how will this impact the European car industry and its 12.6 million employees?
Image: picture-alliance/dpa/A. Arnold
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According to research and analytics firm IHS Markit, battery-only cars made up 0.57 percent of global production in 2016 and will increase to 0.86 percent in 2017. Only in Norway does the figure exceed 1 percent.
But the global carmakers who descended on the southern German city of Frankfurt this week have unveiled the low-emissions vehicles and technology strategies they hope will let them profit from the changes due to hit the auto industry in the coming years.
This against a backdrop of scandal in the auto industry and a changing global political attitude to electric cars.
The world's largest carmaker, Volkswagen's diesel emissions-cheating exposed by US regulators in 2015 set off global outrage and there have been dozens more investigations into test-rigging by the wider industry.
With its BMW i Vision Dynamics, the Munich-based carmaker aims to attack Tesla in the luxury e-car segment. Head of development, Klaus Fröhlich, said the car will make BMW "world leader in e-mobility."Image: Reuters/K. Pfaffenbach
The end of fossil-fueled driving
Britain and France have already pledged to ban fossil fuel motors from 2040, while China is mooting its own ban, although officials have not named a date. Shares in e-car pioneer Tesla jumped almost 6 percent on Monday after a Chinese minister said it was a question of when, not if, Beijing bans fossil-fuel cars. In Frankfurt, German giants VW, BMW and Daimler all announced far-reaching electric vehicle programs.
A year into the scandal, VW said it plans to develop 30 new electric cars and sell 2-3 million annually by 2025. On Monday, it increased the goal to 80 models. VW showed off a revised version of its electric ID Crozz crossover SUV concept vehicle as it announced a long-term electrification campaign.
In for a surprise at IAA Motor Show
The 2017 IAA automotive industry trade fair in Frankfurt is fully booked: 1,000 exhibitors, including 50 carmakers, will showcase their wares. Digital-era high-tech firms are a growing presence.
Image: Getty Images
The chancellor will be there
But what will she say? Not wanting to get prematurely nailed down on decisions, Merkel rarely speaks unambiguously while she almost never gets emotional. Yet, during the recent televised debate with her election challenger, Social Democrat leader Martin Schulz, Ms. Merkel vigorously criticized car company executives. This generated expectations she might have clear policy words to say at the IAA.
Image: picture-alliance/AP Photo/M. Sohn
Dieselgate and illegal cartels
If the chancellor wants to indulge in some plain speaking, there's lots to say: on the massive diesel emissions fraud committed by VW and other carmakers, for example. Also on an illegal price and technology fixing cartel. For years, several German carmakers coordinated business decisions in detail in private, and then pretended to be competitors in public - including at trade fairs like the IAA.
Image: picture-alliance/dpa/ZUMA Wire/J. West
She won't be taking a seat in this car...
Traditionally at the IAA, the German chancellor shows up for a photo opportunity, sitting in a car considered particularly promising and future-oriented. A lot of experts think the most significant car to come on the market this year is the Tesla Model 3, which is meant to make electromobility affordable for the masses. Too bad then that Tesla decided not to exhibit at this year's IAA.
Image: picture-alliance/dpa/A. Sokolow
Nissan isn't coming either
The company that leads global electric car sales is Nissan. The new Nissan Leaf has a maximum range of 400 kilometers. Why aren't electromobility champions Nissan and Tesla attending then? We don't know, but it may be because the IAA has traditionally celebrated internal combustion engine cars and diesel technologies. The new Nissan Leaf is being presented at Chiba, near Tokyo, this week instead.
Image: Reuters/K. Kyung-Hoon
And Volvo isn't coming either
The Swedish carmaker also decided not to come to this year's IAA (or rather Swedish-Chinese, as Volvo was taken over by Chinese carmaker Geely in 2010). Nowadays cars are increasingly sold over the internet and some have decided to avoid the high expense of exhibiting at trade fairs. From 2019, all new Volvo models will be electric-petrol hybrids or fully electric vehicles.
Image: picture-alliance/dpa/H. Schmidt
Thinning ranks
Volvo, Nissan, Mitsubishi, Peugeot, Fiat Chrysler, Alfa Romeo - a long list of established carmakers are not coming to this year's IAA. Whatever their different reasons, the collective no-show does suggest that IAA trade-fair managers had better develop new ideas for drawing exhibitors in the future.
Image: DW/J. Schmeller
IAA is getting ever more digital
With so many carmakers not attending, there's room for new exhibitors from other parts of the automotive business ecosystem. Facebook is among the digital-economy companies exhibiting at IAA this year, with the California-based social network to present its ideas for "Future Transportation.'" Other digital economy firms including Kaspersky Labs, IBM, Siemens and Telekom will also be exhibiting.
Image: picture-alliance/dpa/H. Hollemann
SUVs remain freely available
Electromobility may not be a focus at IAA, but new records in fossil-fueled horsepower will be set and highly expensive vehicles will be displayed. Mercedes, for example, will present a sports car costing 3 million euros ($3.6 million) while SUVs of every variety will be available from those carmakers which are coming this year.
Image: Reuters/A. Song
A new visitor numbers record?
The record for visitor numbers is in excess of 900,000, but it's doubtful whether the previous records will be exceeded this year. On September 24, the day the IAA trade fair ends (which is also the day Germany's federal election takes place), we'll know the number of tickets sold — and whether IAA can still plausibly claim to be the world's leading automotive trade fair.
Image: picture-alliance/dpa/dpaweb
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The company plans to invest 20 billion euros ($24 billion) in upgrading plants, creating two new electric car platforms and training workers. The Wolfsburg-based carmaker said that depending on market developments it could sell 3 million battery-only vehicles a year in 2025.
VW measures the volume of batteries it will need to produce to power its electric fleets in multiples of the output of the "gigafactory" — Tesla's Nevada production facility, after US entrepreneur Elon Musk's Tesla Motors stole the spotlight from slower-moving European competitors this summer.
"Now the big question that everyone is asking is, when will we see [electric cars] in mass volume," VW CEO Matthias Mueller said on Monday.
VW is also seeking new global supplier contracts to source 50 billion euros of electric car content including batteries, which are not yet manufactured competitively in Europe. "A company like VW must lead, not follow," Chief Executive Matthias Mueller told reporters.
Meanwhile, Daimler's Mercedes-Benz premium division has unveiled a compact electric vehicle under its EQ sub-brand and the GLC F-Cell, a battery-fuel cell hybrid that can run on hydrogen and emits only water vapor. Daimler boss Dieter Zetsche said the company has set a target of saving 4 billion euros by 2025 to help fund the cost of its electric cars.
Mergers and job losses
Chinese firms have also bought up a number of parts suppliers and demonstrated an interest in Italian-American group Fiat-Chrysler. Such maneuvering makes Peugeot owner PSA's recent takeover of Germany's Opel appear less ground-breaking, as mergers increasingly appear the best way of meeting the huge research and development costs for electric and self-driving vehicles.
According to consulting firm AlixPartners, electric car batteries require 40 percent less manufacturing labor than mechanical ones. Such a cut would hit 112,000 jobs at European suppliers, even before outsourcing.
A phase-out of combustion engines by 2030 could cost 600,000 jobs in Germany alone, the country's Ifo economic institute has warned.
Not all there
Along with Nissan, Peugeot, Volvo and Fiat, Tesla shunned this year's IAA, months after the first of its keenly-awaited Model 3 cars rolled off the production line.
Other no-shows include Fiat Chrysler's namesake Fiat and its Jeep and Alfa Romeo brands, Peugeot and its DS luxury division, plus Nissan, Infiniti and Volvo. Even Porsche, part of Volkswagen, didn't wait for the show but showed off its new Cayenne SUV on August 29 in Stuttgart.
