Germany's long-established car industry is embarking on a historic transformation to try to shrink its carbon footprint.

As part of its plan to reach climate neutrality by 2045, the government wants to phase out combustion engine vehicles — a major emitter of greenhouse gases — and replace them with lower-emission alternatives, like electric cars. Its goal is to have 7 to 10 million electric battery-powered cars on the road by 2030. That's going to require a twentyfold increase in the number of e-cars around today. 

Electric vehicles make up just 1.2% of the 48.2 million passenger cars registered in Germany. According to the Federal Motor Transport Authority, about two-thirds run on petrol, and around 30% on diesel. 

Berlin-based environmental think tank Agora Verkehrswende said Germany would need to be even more ambitious, with 14 million electric cars on the road by 2030, in order to achieve its climate neutrality goal. 

"This is a huge increase and it also needs a huge increase in charging stations," Kerstin Meyer, head of the think tank's transportation team, told DW. 

What are the main obstacles for car drivers?

The lack of charging infrastructure is just one reason Germans are reluctant to ditch their diesel or petrol car for an electric one.

A YouGov survey conducted among of 2,036 people from February found that 50% named range as the main deterrent, followed by inadequate charging stations (38%) and questionable environmental benefit (35%). Over 54% of respondents were put off by the high price of e-cars. 

Even if the issues with price, range and charging infrastructure were addressed, one-third of respondents still said they would not buy an electric car.

In a separate survey of 10,000 drivers, also published in February and commissioned by Germany's VKU local utilities association, 39% said they would not buy an electric car as their next vehicle under any circumstances. The most important prerequisites for making such a purchase? Improved range (38%), lower prices (36%) and more public charging stations (31.5%).

How much do e-cars cost?

Electric cars are usually more expensive than their diesel or petrol counterparts, with most models currently selling for at least €30,000 ($36,300) in Germany. This is largely due to the costs involved with manufacturing the battery, which can add €5,000 to €10,000 to the overall price tag. But battery prices are falling. They already dropped by 80% between 2010 and 2016 according to the US consultancy agency McKinsey & Company. And a surge in electric cars is expected to make them more affordable. 

The German government is aware of the current price gap and is therefore trying to spur the shift to electromobility by offering €9,000 back in purchase premiums for customers who buy new electric cars by 2025. At the same time, drivers of petrol and diesel models are forced to pay an additional €0.07 to €0.08 at the pumps following the introduction of a CO2 tax in January 2021.

While this mix of incentives and taxes is promoting the fledgling e-car trend, Meyer said the real tipping point could occur when more secondhand e-cars — many of them initially bought as company cars — come onto market at affordable prices.

"When they are sold, it's often private customers who buy these young used cars. And that will probably be a game changer," she said.

Fear of getting stranded without battery power

The German government is also hoping to allay concerns from e-car drivers who want to travel long distances by building a nationwide network of fast-charging stations alongside motorways which will allow drivers to recharge their batteries by 80-100% in 30 minutes.

Of course, how far an electric car can travel on a single charge depends on the model and battery, but most models have a range of between 200 and 500 kilometers (124 to 310 miles).

The range given by carmakers, however, will often be higher than is actually possible under real-life driving conditions, especially in winter when the colder temperatures can impact on the battery resulting in a range loss of up to 30%.

"Range anxiety is obviously one of the key concerns customers have," Ralf Pfitzner, head of sustainability at Germany's biggest carmaker Volkswagen, told DW. 

"But if you take your normal usage patterns or habits, you rarely need the full range of the battery."

Meyer from Agora Verkehrswende said she doubts range will still be a concern in a year or two because of rapid improvements in battery technology. 

Expanding charging infrastructure 

Range anxiety among potential e-car drivers might not be such a problem if places to charge were as ubiquitous as petrol stations.

"The biggest obstacle as of today is setting up the appropriate infrastructure for charging," said Pfitzner. "We are heavily investing in that on our own. It also has to become a prerequisite in government planning that we set up that infrastructure."

There are currently around 42,000 public charging stations across Germany. But there will need to be a lot more to cater to the millions of e-cars in the government's emission-cutting plan. 

"We really need to speed up," said Meyer. "If you are really thinking in the ballpark of 14 million electric vehicles in 2030, you need 10 times or 20 times as many charge points as we have now." 

One reason for the slow progress, she said, is that planning and permit approval for charging infrastructure is a complicated process that often involves different local authorities.

Do e-cars really produce less CO2?

Another concern raised by German drivers is the fact that producing batteries for electric cars is an incredibly energy-intensive process. Manufacturing an e-car produces more CO2 emissions than producing a conventional car. But in Europe, these higher manufacturing emissions are compensated within an average of two years of driving an e-car. And over their entire life cycle, electric cars in Europe generate around three times fewer emissions than diesel or petrol cars. 

"Also in Germany, where we have a relatively coal-intensive electricity mix, [e-cars] are better than combustion engine cars in most cases," said Meyer.

Still, it's worth noting that the climate benefit is smaller in countries where most of the electricity used to charge the batteries comes from fossil fuels rather than renewables. Ensuring that the electrification of the auto sector translates into the intended emissions savings also means Germany will have to ramp up the renewable energy sector. 

E-fuel debate: What about hydrogen-powered cars?

Germany's car industry has stressed that although rolling out more battery-powered cars is a priority, it shouldn't be seen as the only way to bring down emissions. The country's top car lobby, the Association of the Automotive Industry (VDA), argues that synthetic fuels could potentially be used to make combustion engine cars climate-neutral in the future.

"We will not achieve the climate targets if we do not also address the existing fleet and possibly also consider how to replace fossil fuels for new vehicles. And that's why we need a committed strategy for synthetic fuels and hydrogen for the transport sector as a whole," said VDA head Hildegard Müller.

The government plans to phase out fossil fuel combustion engines by 2035, but has emphasized that hydrogen could power these cars in the future.

Critics say producing green hydrogen is too energy intensive and costly, and that it would make more sense to instead use it to decarbonize industries that are difficult to electrify, such as freight transport and aviation. Volkswagen, for its part, has ruled out using synthetics fuels, focusing instead on battery-powered electric cars.

For Kerstin Meyer from Agora Verkehrswende it's clear: "The future regarding cars is very likely to be battery electric."

Why is this such a big deal in Germany?

Germany's car industry is world famous, known for major brands such as Volkswagen, Daimler, BMW and Mercedes. The sector brings in almost $500 billion a year and is a major employer, providing jobs to around 1.8 million people. 

The transition to e-mobility is going to have ramifications for these companies, their employees and the suppliers they work with. 

Although e-cars currently make up a tiny share of the vehicles on the road, the market is growing fast. And it will likely pick up pace as battery costs drop and infrastructure catches up. 

The sector may face additional pressure after Germany's highest court in May ordered the government to improve its climate policy. Faster change could also be on the cards if the Greens — who want to phase out conventional cars by 2030 and raise petrol prices — perform well in Germany's general election in September.