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New Mobility World @IAA Commercial Vehicles 2018Hanover, September 20-27, 2018

Money Talks – Will Subsidies Lead E-Mobility to its Breakthrough?

By Editorial Team on July 6, 2018

Electric mobility has become symbolic for what the future of mobility might look like. It is vision, saviour, future, present, false hope, placebo, and more all rolled up in one. It would probably be easier to say what the electric powertrain is not, rather than saying what it might be. Certainly, there is no lack of superlatives and descriptions for it.

But what is e-mobility not? It is not yet an integral part of mainstream mobility services, despite having been the centerpiece of many discussions at many events on many panels. At the moment, e-mobility has not yet benefited from the fall from grace that the traditional fossil fuels gas and diesel have been experiencing. Despite the hype, the only player in the mobility game that has truly gained from Dieselgate and hyped up petrol prices is the hybrid drive. The hybrid’s lead may be getting smaller, but the combination of the combustion and an electric engine is still the most popular alternative.

The German state of Berlin has decided to try and give the sales figures of electric vehicles a slight push in the right direction by offering subsidies on the purchases of e-vehicles, which can go up to €4000 for private persons and €8000 for tradesmen (if they buy an electric light commercial vehicle for example). But are subsidies the help e-mobility needs to skyrocket?

It’s Not All About Financial Incentives

It’s doubtful that financial incentives are going to boost the sales of electric vehicles. Hard facts like the price – there are only few electric cars available in the lower price segments after all – certainly need to be improved. But there are more reasons why electric engines are still waiting for their breakthrough. Convenience and comfort for example are other obstacles for the alternative powertrain.

A prominent example for this is the charging infrastructure, or lack thereof. There is an immediate link between the charging infrastructure and the convenience of customers. The amount of charging stations (rapid chargers in particular) in Germany is too low, the charging times take too long and way too many different providers for charging stations offer their own tariff systems – at the expense of the customer. For a golden future of electric vehicles, it’s important that the switchover to electric cars and vans is made as easy as possible, which currently still has too many hurdles in its way. What is needed is more of a nudge, a process which Prof. Dr. Gerhard F. Riegl describes as follows:

“Nudging […] is a method in behavioural economics which tries to impact a person’s decisions in a predictable manner, but without the use of bans, commandments, or economic incentives.”

To summarise: Not many people are going to purchase an electric car, if the car’s reach is too short or they can’t use it when they need to (because the car is either still charging, or can’t be driven because there is no charging station available) even if the price of the vehicle becomes more affordable. A related example is public transportation: An inflexible public transport system with a schedule full of gaps won’t attract many people, even if it were for free.

Electric Mobility Can Only be Boosted as a Package

Issuing economic incentives won’t guide the electric mobility to it’s breakthrough. Subsidies on purchases, tax incentives, or just cheaper electric vehicles might lead to more people considering electric cars and vans, which is a great start: Startups such as Uniti are already pushing into these gaps and franticly working on developing affordable alternatives. But the mentioned problems will still prevent people from actually buying these vehicles. The support for electric mobility will only work if an attractive, all-round package is offered, that includes access and reliability of charging stations, affordability of the product, and more consumers being convinced of its efficiency and benefits for a changing urban landscape.


Hero Image Source: Max Bender on Unsplash

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