The future of energy and transportation is under scrutiny as the EU plans to ban fossil fuel vehicles by 2035, with ongoing debates about electric versus combustion engines. The automotive sector faces challenges, particularly in electric vehicle adoption, while German manufacturers contend with increasing competition from Chinese brands. As demand for electricity rises, the focus shifts to renewable energy for cost-effective generation, though infrastructure and reliability issues remain concerning for a sustainable transition.
Shaping the Future of Energy and Mobility
The future of energy supply and transportation is being shaped by various strategies and critical choices. Key decisions are looming: Should we opt for electric vehicles or stick with combustion engines? Is nuclear power the answer, or should we invest more in renewable energy sources?
The combustion engine, a remarkable invention originally developed in Germany, faces an uncertain future. Starting in 2035, the European Union will prohibit the sale of new vehicles powered by fossil fuels, although an exception may be made for e-fuels, which would allow combustion engines to continue operating.
Challenges and Opportunities in the Automotive Market
The German Association of the Automotive Industry (VDA) opposes this ban, arguing for a focus on solutions rather than prohibitions. Simon Schütz from the VDA emphasizes the need for constructive discussions on meeting climate targets, noting that combustion engines will likely remain in use in various sectors for some time.
Meanwhile, the electric vehicle market in Germany faces challenges, particularly for international brands like Renault and Tesla. It’s important to remember that approximately 75% of automobiles produced in Germany are exported, often to markets that still rely on fossil fuels. German manufacturers have traditionally thrived in markets like China, where they have enjoyed success with high-end combustion engines. However, competition is intensifying as Chinese companies, benefiting from significant government subsidies, are rapidly gaining market share.
In contrast, the acceptance of electric vehicles is advancing more swiftly in other countries. For instance, only 13.4% of newly registered cars in Germany in 2024 were fully electric. In comparison, Austria and France saw about 17%, the Netherlands reported 34.7%, and Norway achieved a remarkable 88.9%. This trend even extends to developing nations like Ethiopia, which has implemented a ban on combustion engine imports to promote electric vehicle use, citing the cost-effectiveness of locally generated green energy.
In Germany, there are calls to expand charging infrastructure to support a transition to electric mobility. Experts like Petra Schäfer from the University of Applied Sciences in Frankfurt advocate for urgency in this transition. She notes that just as German companies led the way in the past, they must now accelerate their efforts in electric mobility to keep pace with global developments.
Simultaneously, there’s a pressing need for affordable and accessible charging solutions to encourage broader adoption of electric vehicles. As Simon Schütz points out, creating a robust charging network will be essential for the success of e-mobility, fostering consumer enthusiasm for electric travel.
As the global demand for electricity rises, particularly for industrial applications and data centers, the question arises: How will we generate the necessary electricity for these electric vehicles while keeping costs low? Advocates for renewable energy argue that sources like wind and solar power are currently the most economical options available.
Professor Volker Quaschning from the University of Applied Sciences in Berlin underscores the importance of renewable energy in achieving lower electricity prices. He explains that fossil fuel power plants, which traditionally set the market price, are the most expensive to operate. In 2021, the cost of renewable energy averaged 9.34 cents per kilowatt-hour, and by last year, it had decreased to 7.8 cents, despite challenges such as calm winds and low sunlight periods.
In contrast, while France’s nuclear power appears cost-effective at 4.2 cents per kilowatt-hour, it is heavily subsidized. As these subsidies become unsustainable, a price increase is expected by 2026. Professor Quaschning advocates for an increased focus on renewable energy so that reliance on fossil fuels diminishes, ultimately leading to lower electricity costs overall.
However, the necessary infrastructure to support a renewable energy transition is not yet fully in place. Christof Bauer from TU Darmstadt highlights the need for better energy storage solutions and grid expansion to manage excess production from wind and solar energy effectively. When factoring in the costs of grid maintenance and additional levies, the actual average price of electricity rises significantly.
While the price of electricity is a critical factor, it is not the only consideration. As Bauer notes, renewable energy sources may face limitations, particularly during extended periods of low sunlight in winter, raising questions about reliability and the future of energy generation.