More E-mobility is needed to meet the new German climate targets – German automotive industry still relies too heavily on plug-in hybrids

On behalf of the Commission of Experts for Research and Innovation (Expertenkommission Forschung und Innovation EFI), the Fraunhofer Institute for Systems and Innovation Research ISI in Karlsruhe has examined conventional and new drive technologies in passenger cars with regard to their economic efficiency, environmental footprint, and potential to meet the new German climate protection targets. The researchers also surveyed the German automotive industry’s position in an international comparison in relation to the requirements for the turnaround in drive technologies. The two studies show that electric vehicles are the most economical and energy-efficient option for reducing greenhouse gases. Germany has a leading role in patent and trademark applications for sustainable drive technologies. However, the sales figures currently show a strong focus on plug-in hybrids, even though experts believe these should only be a transitional technology.

The new climate protection targets adopted by the German Bundestag in summer 2021 mean that urgent action is needed in the transport sector as well. These targets can mainly be achieved by switching to battery-powered vehicles. For the first time, Fraunhofer ISI has analyzed the impacts of the new German climate targets on alternative drives in more detail.

“Purely electric vehicles are already commercially available on a large scale today, and are the most energy-efficient solution”, explains Prof. Martin Wietschel, Head of the Competence Center Energy Technology and Energy Systems.

According to the calculations, battery-electric vehicles (BEV) already have the lowest greenhouse gas (GHG) emissions using today’s electricity mix. The GHG emissions of an electric car purchased in 2020 are half those of a car running on gasoline. This advantage will amount to almost 60 percent in 2030 with the rising share of renewable energies in the electricity mix. Even if the targets in the electricity sector are only partially achieved, BEVs as well as plug-in hybrids (PHEVs) still perform better than gasoline or diesel vehicles.

PHEVs can contribute to lowering GHG emissions in the short term if a significant proportion of their trips is driven electrically (at least 40 percent). However, in the medium and long term, these would have to run on synthetic fuels in order to meet the climate targets, so they should be viewed more as a bridging technology.

In the medium term, other alternative drive technologies also have the potential to save greenhouse gas emissions during use. These include biofuels from renewable resources, hydrogen fuel cells, or synthetic, electricity-based fuels, provided that exclusively or predominantly renewable energies are used to produce them. ifeu – Institute for Energy and Environmental Research Heidelberg was involved in the environmental assessment of the drive technologies.  

In order to draw conclusions about the future viability of these technologies, however, an economic analysis is necessary in addition to the environmental analysis. 

How economical are the different drive technologies?

In addition to the environmental footprint of the various drive technologies, the experts at Fraunhofer ISI also analyzed their economic efficiency. Following the total cost of ownership approach, they considered all the costs involved in acquiring and using a passenger car from a macroeconomic perspective.

Here once again, BEVs prove to be the cheapest sustainable option in the medium and long term. They are still economically advantageous compared to other alternative drives even if it is assumed that the battery has to be replaced after half its service life.

According to the calculations, synthetic, electricity-based fuels for combustion engines are not economic today nor will they be so in the foreseeable future due to the high fuel costs; moreover, they are completely absent from the market. There are also hardly any fuel cell vehicles available at present. These are very expensive and have only limited potential to save GHG. However, the researchers believe that these could complement battery vehicles in the long term (after 2030) in large and heavy-duty vehicles that have long range requirements.

Biofuels can help to lower the GHG emissions of passenger cars at comparatively low cost, but there are limited quantities of sustainable biomass available. Biofuels are also needed for other applications such as international air traffic. Biofuels for passenger cars should therefore be regarded as more of a transitional solution.

The production processes of all the alternative drive technologies analyzed still have a large ecological rucksack and thus significant GHG reduction potentials. Compared to conventional cars, electric cars, plug-in hybrids and hydrogen-powered cars are particularly critical in terms of resource consumption, e.g., of lithium, cobalt or platinum group metals. This is why substitution and recycling processes are required. 

How well is the German automotive industry prepared for the transformation of the transport sector?

”The field of alternative drive technologies has been marked now for several years by strong growth in patent and trademark applications around the world,” sums up Dr. Luisa Sievers, researcher at Fraunhofer ISI. “Germany’s automotive industry has a leading role here that should be actively sustained”.

Over a period of almost 15 years, Germany was number one in trademark applications at the European Union Intellectual Property Office (EUIPO) in all categories of sustainable drive technologies and digitization. The US had the most patent applications for autonomous driving, but if technologies for assisted driving were included as well, Germany was in first place over the entire period analyzed from 2005 to 2017.

Overall, the traditional automotive nations Japan, Germany and the US lead the technology development. Recently, however, there has been an increasing dynamic in terms of the regions and types of companies involved. Countries like China or South Korea and information and communication technology companies are now taking growing shares.

So far, Germany‘s technology leadership, as suggested by the patent analysis, is not clearly visible when comparing the shares of electric cars in the sales figures of manufacturers. Besides Tesla, the share of BEVs in car sales is very high, especially among Chinese manufacturers. On the other hand, German manufacturers already achieve similarly high global market shares for BEVs as for cars with internal combustion engines. They are the leaders for plug-in hybrids, where the German manufacturers BMW and Daimler play an important role.

Based on the recent strong increase in sales of BEVs and PHEVs in Germany, the researchers at Fraunhofer ISI conclude that the support policy is working and should be continued. However, about half of the electrically-powered vehicles sold in Germany in 2020 were plug-in hybrids. In the short and medium term, support should be shifted to focus on BEVs, the use of PHEVs should be limited to their function as a transitional technology, and incentives should be set that improve the share of electric driving with PHEVs.

Examples of the concrete action options identified by the experts include strengthening the technological competitiveness in batteries as well as establishing local battery cell production.

In order to remain competitive in the long term, companies should be actively involved in all the key value creation stages of alternative drives wherever possible, especially batteries, electric motors and power electronics. In the context of autonomous driving, this is especially true for developing information and communication technologies, connected vehicles, and accompanying business models. Germany has to consolidate and expand its efforts to maintain its leading role as a technology location.

In addition to faster expansion of the charging infrastructure, the researchers also see the need to develop a strategy for an overall concept of autonomous mobility in Germany. This should explicitly consider the sustainability of the mobility system, for example, using sharing schemes.

The Fraunhofer Institute for Systems and Innovation Research ISI analyzes the origins and impacts of innovations. We research the short- and long-term developments of innovation processes and the impacts of new technologies and services on society. On this basis, we are able to provide our clients from industry, politics and science with recommendations for action and perspectives for key decisions. Our expertise is founded on our scientific competence as well as an interdisciplinary and systemic research approach.

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