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.”