The move to electrified cars over the next decade or two, spelled out more clearly than ever before at this year’s Frankfurt motor show, will have interesting and possibly unimagined side-effects. That’s according to two of Europe’s most influential car company leaders, Daimler’s Dieter Zetsche and PSA chief Carlos Tavares.
Zetsche made it clear that the scale of investment needed to launch a range of electric cars won’t result in much payback in the early years, making life very difficult for those without the deep pockets needed to sustain such a project.
“We believe the contribution to profits made by electric cars in the early years could be up to 50% less than for conventional models,” he told reporters. “For us this is sustainable because these cars have less in-house content than conventional models. And we’ve put aside €4.0 billion [£3.6bn] to cater for the effects of this.
“Most people agree that when battery costs fall to around €100 [£90] per kilowatt, as is predicted around 2025, they will have reached cost parity with today’s conventional cars. At that stage, we estimate the proportion of full electric cars will be 15 to 25% of the total number of cars we make. But there are no guarantees attached to these figures – far from it – so being flexible is the best way to address the problem.”
Tavares, meanwhile, sees potential problems for governments across the globe who have driven the move into low carbon vehicles by dictating its means of propulsion – electrification.
“We have moved from a technology-neutral approach to one where governments have begun to forbid the use of internal combustion engines,” he said. “We are instructed to go electric. It’s no longer my decision, it’s their decision. My job is to transform the business, to retrain people and retrain them.
“That puts the responsibility for consequences – maybe for future energy supply or environmental effects – in the hands of governments. If there’s any problem, the responsibility is in their hands. We’ve moved from a situation where we met as equals to one where they have given the instruction. We’re fine with that – we can make it happen – but the governments must understand they have new responsibilities.”