Mercedes-Benz Tells Us Why The Future Of The Electric Car May Be Far Different Than We Think

This of course leads to range anxiety, since a dead electric car is truly an expensive paperweight, without the recourse of walking to the nearest gas station for a can of fuel. However, discussions like this must be viewed as abstract in relation to the bigger picture of how a growing electric car population would work in different societies across the globe. Or not. The issues are manifold, and fundamentally need to start with serious and detailed discussions on infrastructure. After all if a nation's electrical power grid were already teetering on the brink, plugging in thousands of electric cars would surely take it down.

We have already seen instances of local area grids suffering blackouts when half a dozen Tesla S owners try to recharge their cars at the same time. Suddenly the electric car becomes a national security issue! Smart chargers are a nice idea, but if the power companies simply do not have the spare capacity in areas with concurrently growing populations, then it is a moot point. The bottom line is that investment in infrastructure is expensive, and the power company's shareholders need to see positive returns. The urban environment is undoubtedly where the electric cars zero emissions status is most valuable.

Ironically, these built-up areas are where it is hardest to install charging points. In inner city areas many houses have street parking only and residents have area parking permits. This means you find whatever space is left when you return home in the evening. Unless every space has a charging point this is a big problem. And what do you do in high-rise apartments? While newer blocks have underground parking, many of the older ones do not. Ultimately we wind up once again asking who is going to pay for digging up the streets to install roadside chargers? And even if someone were able to pay for all this, we come back to the issue of grid capacity.

It is all so well for politicians to talk about replacing existing cars with electric ones, but the fact is that many people cannot afford a $60,000 electric car, or even a $35,000 one. This is a social issue, and it is a fact that wealthier people probably do lower mileage for work related trips by car. The fact that only people in the higher income groups can afford cars like the Tesla S puts an elitist label on these machines. They are also used for tax saving reasons in some countries where lower or no taxes are paid on zero emissions vehicles. Once again politics is creating market distortions.

Few people today remember that in fact the electric car is older than the gasoline powered one. Ferdinand Porsche made the first hybrid electric car at the turn of the 20th Century, and by the 1920s there were dozens of electric car manufacturers in America. However, back then, as is still the case today, the batteries were the weak point and thanks to its longer range, and fast refuelling ability, as soon as the gasoline-powered car became reliable enough it overtook electricity to become the norm, as we know it. We recently had the opportunity to speak with Wilko Stark, Daimler's man in charge of CASE (Connected Autonomous, Shared & Service and Electric), which includes its new EQ range of electric vehicles, and put some pointed questions to him:

Q: The situation of E-mobility seems a bit confused at the moment. Where do governments and the auto industry stand on issues like the lack of charging infrastructure?

A: Based on the upcoming CO2 legislation in China, Europe and the US we project that the global sales of electric vehicle will grow to a share of between 15 and 20% by 2025. Plug-in hybrids will attain a similar share and all major OEMs will have electrified their product portfolios. Within the Daimler brands, Mercedes-Benz EQ and smart will roll out 10 electric vehicles between now and 2022, with Plug-in hybrids across the whole product range. Nevertheless as you pointed out, a major challenge is the lack of charging stations at home, at work and in public places.

Q: Will we see a true well-to-wheel emissions evaluation at some point, or will governments continue to blindly insist that EV emissions amount to zero?

A: From a purely technical perspective the upcoming CO2 legislation in China, Europe and the US can only be met if the electric range is calculated with zero CO2 emissions. In order to reduce the CO2 footprint of electric vehicles governments will have to push regenerative energies as well. This is an issue that needs to be addressed by the energy utility companies and not the auto manufacturers.

Q: The media tends to discuss such issues on an idealistic level. In many countries i.e. Southern Europe, where diesel cars are prominent, most people simply cannot afford to buy a new car, and electric cars are new and expensive. These are exactly the people who live in apartments with no charging facilities.

A: For the time being electric cars are indeed more expensive. However, by 2025 we expect to see prices fall to the point where electric cars will enjoy a cost advantage. Currently many countries offer tax advantages for zero emission vehicles, which balances costs to the consumer, but you are correct in saying that this is a politically driven market distortion. The main challenge will be the ramping up of the charging station/point network, which will lead to a mix of EV, hybrid and conventional power for quite some time.

Q: How do you come to the conclusion that the cost of electric cars will be lower than other types by 2025?

A: If you look at an EV with a 500 km range like our EQC, which will be presented this year, there is no question that its battery and drivetrain system is currently more expensive to produce than a comparable combustion engine and gearbox. However, this is likely to be completely different by 2025. What we will see in most markets will be a decreasing battery price on the one hand and an annual increase of approximately 10% in battery energy density, even with existing Li-Ion battery technology. The so-called post-Li-Ion technologies like LI-Sulfur, or even solid batteries might just change the game completely again. Such systems could also solve the challenges of an impending shortage of cobalt and other raw materials within the next 15 years.

Q: Will electricity become as costly as gasoline?

A: As we have seen from other technological improvements over the past 131 years since the debut of the first car, superior technology will always convince through a higher overall efficiency ratio, and therefore a better well-to-wheel equation. We can expect that governments as well as the whole ecosystem will react to a significant improvement once it comes along. An acceptable market price will be evolved in order to guarantee mobility, especially individual mobility.

Q: How can you as a carmaker maintain profitability in such a fluid environment?

A: We clearly strive for good profitability in everything we do, but it is a challenge for the entire industry, especially in the ramp up phase of EVs. Based on CO2 regulations, mobility, especially in the EU, might become more expensive for combustion engines. This will depend mainly in the various tax systems impacted by the new measuring cycle WLTP with stricter rules being implemented over the next few years. But as I said, we will come to a point around 2025 where the costs of battery EVs will be comparable to today's combustion engine cars.

Q: Are battery swaps a viable option?

A: From our perspective battery swaps do not make a lot of sense for one very simple reason. The battery system of an EV is very expensive, and it will continue to be very expensive in the coming years. If you want to set up a battery changing system you will end up with 1.2, 1.3 or 1.5 batteries per car, so costs will go even higher. Having an intelligent electrical grid that knows when a driver will arrive and the kind of charge that is required will be far more advantageous. If you take the daily commuter who drives say 30 to 50 miles per day, then an EV is the perfect answer.

Right now mobility is changing faster than we have ever experienced before, and this is the reason why Mercedes is investing not only in cars but also in the overall eco system that will shape the future of mobility. Things are moving so quickly now that in two to three years you may see quite a different picture emerging.