politikbrief 01/2014 - vda · further steps are needed. federal, state and municipal governments...

Politikbrief 01/2014

N E W S S E R V I C E F O R D EC I S I O N M A K E R S I N P O L I T I C S A N D T H E EC O N O M Y

Closer to Reality: A New Method of Determining Vehicle Fuel 2 Consumption Set to Become a Global Standard Currently, all vehicle manufacturers in Europe determine the fuel consumption and exhaust emissions of their products according to “New European Driving Cycle,” or …

Electric Mobility in Germany: The Time for Market Ramp-Up Has Come 3 We have reached a new milestone: electric mobility is ready for the market. By year’s end, German manufacturers will have released a total of …

Infrastructure: Don’t Use Trucks as a Stopgap Measure 4 The new government is not only committed to increased investment in infrastructure but is also providing an additional 5 billion euros for …

Autonomous Driving – An Illusion or Near Future? 5 Sound familiar? You’ve been stuck in a traffic jam for 20 minutes already. You should already be at the office and preparing for your next …

Invitation to the 65th IAA Commercial Vehicles: Driving the Future 6 The 65th IAA Commercial Vehicles will open its doors in Hanover, Germany from 25 September to 2 October. A key topic of the leading international fair …

Electricity Prices as a Competitive Factor: What’s Important 7 to Industry during the Energy Transition Do we need the turn of the turn? It would certainly be wrong to backtrack entirely, but we need a course correction in the monumental project that is the …

Imprint 8

Contents

News service for decision makers in politics and the economy



2

Currently, all vehicle manufacturers in Europe determine the fuel consumption and exhaust emissions of their products according to the “New European Driving Cycle,” or NEDC for short. This binding and legally mandated standard has for many years served well as the basis for comparing different vehicles. However, the testing method has come under criticism because real-life driving conditions may deviate from the test results. Actual fuel consumption may be above or below the standard value depending on driving behavior and external conditions. The fact that consumption is often higher in practice has led consumer protection groups and environmental organizations to criticize the industry.

Some causes for exceeding the standard consumption include the use of air conditioning, radio and seat heating, as well as road conditions and differing weather conditions – but the indi-vidual‘s driving style is the main factor. For example, those who drive a steady 80 kilometers per hour on the highway will in all likelihood come in below the NEDC value, while stop-and-go-traffic in urban centers typically drives consumption above it. These different factors cannot be naturally represented in the standardized measurement of consumption, since the method was specifically designed to be performed under uniform and unchanging conditions. This is also the only way the values can truly be compared. Experts from around the world are now working under the auspices of the United Nations to prepare a global harmonized test cycle yielding consumption figures that better reflect real-

Closer to Reality: A New Method of Determining Vehicle Fuel Consumption Set to Become a Global Standard

ity. The automotive industry has provided critical support and promotion for this initiative. In addition to Europe and Japan, India and South Korea intend to apply the cycle as well. China will likewise use the cycle as a basis for its standards. The USA is unfortunately not participating in this process.

The new WLTP (Worldwide Harmonized Light Duty Test Proce-dure) cycle draws on driving data collected worldwide and covers a wide range of driving situations, from inner city traffic to highway driving. It aims to better account for changing driv-ing behavior and new vehicle technologies. In contrast to the NEDC, the WLTP cycle includes significantly more acceleration and braking and is much more dynamic. Its overall conditions are defined more clearly than in the NEDC and therefore yield a statistical “over-consumption” figure across all engine types. However, the same rule applies to both the old and new fuel economy test: an experienced “eco-driver” has just as good a chance of falling below the official values as does a pedal-to-the-metal driver of easily exceeding them.

The first phase of WLTP development was concluded in March 2014 and the testing procedure can now be applied to conven-tional cars. Outstanding issues such as the inclusion of electric cars and plug-in hybrids are to be resolved by the end of 2015. Only then can the WLTP be adopted in European legislation.

Source: VDASource: UN/ECE

Speed profile in the future “world cycle” WLTP

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200 400 600 800 1000 1200 1400 1600 1800

Low Middle High Extra-High

Spee

d in

km

/h

Time in s

WLTP NEFZ

Starting temperature Cold Cold

Cycle time 30 min 20 min

Idle time 13 % 25 %

Cycle length 23.25 km 11 km

SpeedMean: 46.6 km/h – Maximum: 131 km/h

Mean: 34 km/h – Maximum: 120 km/h

Drive powerMean: 7 kW –

Maximum: 47 kWMean: 4 kW –

Maximum: 34 kW

Influence of optional equipment and air conditioning

Optional equipment included in weight, aerodynamics and

electric power supply requirements (standby

current). No air conditioning.

Not currently included.

WLTPNEFZ



3

We have reached a new milestone: electric mobility is ready for the market. By year’s end, German manufacturers will have released a total of 16 production electric cars. From city hoppers to sports cars, no other country offers such a variety of electric mobility. Germany is at the forefront internationally, as has also been shown by McKinsey’s latest Electric Vehicle Index (EVI).

The cars are of course eye-catching, but electric mobility is a cross-cutting technology covering our small and medium-sized suppliers and especially the chemicals industry, mechanical engineering firms and the electrical industry. Electric mobility is a new and especially competitive field of technology. Many countries are determined to tap the emerging sources of jobs and prosperity. Production sites compete with each other on a global level.

Also Germany has the goal and opportunity to become a lead-ing international market for electric mobility. However, it is now time to establish the framework for successful market ramp-up. A package of appropriate measures is required. Federal Trans-port Minister Dobrindt’s plan to introduce an electric mobility law later this year is a good first step. Special parking rights or the use of bus lanes may be customer incentives.

Therefore the vehicles that will receive special privileges must be defined. Hybrids, plug-in hybrids and range extend-ers, purely battery-driven cars and fuel cell cars all make an important contribution to making mobility more sustainable. A technology-open and therefore reasonable demarcation criterion would be a minimum electric range of 25 km. Greater ranges would require larger batteries, increasing the price and weight of the car. However, the possible CO2 reduc-tions will be lost if already middle income consumers do not accept these additional costs.

Further steps are needed. Federal, state and municipal governments have to set an example when renewing their vehicle fleets. Costs are of course an important factor in the purchase decision, with battery prices being one of the greatest challenges. However, electric vehicles can already be economically viable today despite their high initial costs. Short and regular routes are best suited for electric driving. The lower fuel and maintenance costs can helpto compen-sate the higher purchase price.

The market ramp-up has to be set in motion by companies’ fleet purchases. At least in the first few years, commercial customers will still require additional political incentives on the purchase of electric cars. The National Electric Mobility Platform has therefore rightly proposed a special depreciation

Electric Mobility in Germany: The Time for Market Ramp-Up Has Come

for company vehicles. This would be a proven market-based instrument for making electric mobility attractive for a wide range of companies. We also urgently need practicable tax rules governing the supply of charging current. An example for a fast market ramp-up lost is if employees cannot charge their private electric cars at work because it would be taxed as a non-cash benefit. Revenue authorities should deal with these issues as pragmatically as they did the private usage of work computers when they became widespread two decades ago.

There is also significant potential for improvement in estab-lishing the requisite charging infrastructure. More charging facilities need to be set up in public areas, parking garages and shopping centers. It is also essential that the European agreement on the Combined Charging System (CSS) be quickly implemented in German law as the standard for normal and fast charging.

In conclusion, we have to note that any attempts to “re-educate” customers would fail. Electric cars will only find acceptance as comfortable vehicles for an everyday use. They have to be affordable, but driving electric also has to be fun. The German automotive industry is sending a clear signal with billions of euros of investment. Manufacturers and suppliers both are determined to do their part to make electric mobility a success in Germany.

Figure: The automotive industry is keeping its word. By year’s end, German manu-

facturers will have released a total of 16 production electric cars. Many other

models will follow in the coming year.



4

The new government is not only committed to increased invest-ment in infrastructure but is also providing an additional 5 billion euros for the transportation budget. Additional funding is to be generated primarily by significantly increasing the burden on road freight traffic, as stated in the coalition agreement.

Report on Road Infrastructure Costs

The level of the truck toll depends on political will as well as the actual costs of operating and maintaining the road infrastruc-ture. According to the new Report on Road Infrastructure Costs, these costs are lower than before due to lower capital costs in light of the current low interest rates. The truck toll rates must therefore be reduced.

Expanding the toll affects small and medium-sized companies and poorly developed regions

Against this background, the government’s intention is to bring in additional revenue. The Federal Ministry of Transport and Digital Infrastructure (BMVI) is planning to increase the cost burden in several areas. For example, the toll for trucks over 7.5 tonnes (currently 12 tonnes) is to be extended to include an additional ~1,000 km of four-lane federal roads. This would most of all affect German small and medium-sized enterprises and local trade, since more than 90 percent of light trucks on federal roads are registered in Germany. In addition to these measures, starting in 2018 trucks will pay tolls not only on highways but also on the ~40,000 kilometers of federal roads. This poses a long-term risk of placing a critical additional burden on the transportation industry, business and consumers. Furthermore, these plans hardly address the role of foreign vehicles in bearing the infrastructure costs. While 40 percent of the mileage subject to highway tolls is driven by foreign trucks, German trucks account for 85 percent of the kilometers traveled on current federal toll highways. The percentage is presumably even higher on two-lane highways in rural regions.

Furthermore, the Report on Road Infrastructure Costs proposes double the toll rate for federal highways as for highways. This would put a real burden on poorer regions far from highways, with all the associated consequences for domestic companies and employees in these regions.

External costs further increasing prices This substantial expansion of tolls will be exacerbated by charges for the external costs of air pollution. This would represent a systemic change away from user fees based on infrastructure and road costs. However, charges for externalities are not necessary for ecological reasons. The proven, burden-

Infrastructure: Don’t Use Trucks as a Stopgap Measure

neutral progression of the toll according to pollutant class already provides the necessary incentives for quickly renew-ing fleets with modern, low-emission vehicles. It is therefore a welcome development that the toll reform is establishing a separate, affordable toll class for Euro 6 trucks. An “air pollution surcharge” on the toll is altogether unnecessary.

Embedding in structural reforms

In expanding the toll, politicians are following recommenda-tions of the Bodewig Commission, but unfortunately only in part. The Commission had proposed incorporating the new fees into a comprehensive reform including the establish-ment of an infrastructure fund for the individual modes of transport. Additional user fees will not enjoy acceptance from business without further development of the financing mechanisms for roads.

Short-term revenue drops should not hide the fact that toll costs for the transportation industry will rise significantly again starting no later than 2017/2018. However, (domestic) trucks cannot be made into a stopgap measure to handle the lack of budgetary resources. Transportation and logistics costs are a critical factor in Germany’s economic attractiveness.

Don’t burden buses

Just in October, the Conference of Ministers of Transport rejected a bus toll so as not to further burden small and medium-sized bus companies. And it should stay that way. As it is, buses cover their infrastructure costs on highways at more than 270 percent (compared with cars at 400 percent).

From budget From truck toll Special programs

Source: Federal Ministry of Transport and Digital Infrastructure (BMVI), VDA

Federal highway investments (in billions of euros)

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5

Autonomous Driving – An Illusion or Near Future?

Sound familiar? You’ve been stuck in a traffic jam for 20 minutes already. You should already be at the office and preparing for your next appointment. Wouldn’t it be ideal if you could push a button to activate a Congestion Assistant that handles braking, starting and keeping distance for you while you go through your documents? The good news: it will soon be technically feasible. The bad news: the legal framework still needs to be adapted.

The development of new technology is part of the automotive industry’s DNA. Modern assistance programs already make driving safer and more convenient. They help us make turns, drive at night or when fatigued. They warn us if the car strays out of the lane or another vehicle approaches in the blind spot. Our companies have built a lot of technology into their cars so that these assistance systems can operate.

The information they gather also allows for automated driving features that let the car handle the actual driving. The first applications such as Congestion Assistants and Highway Assistants will become available in the next few years. Driving around endlessly searching for a free parking space may soon be a thing of the past as well. In the medium term, you will probably be able to get out in front of special parking garages and the car will find a parking space on its own.

Exploiting the technical potential requires that the legal conditions be established in advance. The United Nations is the most important place for clarifying the legal issues, since there ultimately must be a regulation that is applicable worldwide. Germany is being represented in the relevant UN committees by its federal government. The German automo-tive industry is making its expertise available to support the government’s work.

However, one thing is clear: we should not expect cars to be driving everywhere entirely on their own in the next few years. Press reports on research projects suggesting the imminent deployment of these vehicles create false expectations. Such a scenario is not realistic in the near or even medium term – not legally or technologically, nor in terms of our infrastructure.

The tangible future therefore lies more in vehicles networking with one another, their environment and the Internet. Vehicles will communicate with each other via the cellular network or Wi-Fi, notifying us of accidents in real time without us having to turn on the car radio. We will bypass traffic jams better and thereby shorten travel times. We will have our e-mails read aloud in the car. The goal is accident-free driving. Together with the political sphere and IT partners, we are on the path to the new mobility.

Source: Continental AG



6

Invitation to the 65th IAA Commercial Vehicles: Driving the Future

The 65th IAA Commercial Vehicles will open its doors in Hanover, Germany from 25 September to 2 October. A key topic of the leading international fair for mobility and transportation this year is networking vehicles in all aspects. It provides greater safety through intelligent assistance systems and increases efficiency and comfort.

Beyond the most world premieres, the IAA also offers practical demonstrations, such as on the Innovation Stage. The specialist events cover current issues such as traffic safety, alternative fuels, driver shortages and accessibility in long-haul buses. We are once again expecting students and teachers from all over Germany at the “goING” and “workING” workshops on post-secondary and career counseling. We will also hold a “Campaign for School Classes,” which offers both discounted admission and many preparatory materials for the fair visit.

The IAA is the world’s most important mobility trade fair and an important platform for communication about political issues. Numerous federal and state politicians, EU representatives and other international guests are expected to attend. The German Association of the Automotive Industry (VDA) will again offer individual tours for members of parliament and the staff of ministries and government agencies. For infor-mation about these tours, please contact Christine Rother of the VDA organizational team at +49 (0)30 89 78 42 - 401 or [email protected]. Further details about the trade fair and participation in IAA specialist events will be updated continuously at www.iaa.de.

A selection from the 2014 program of IAA specialist events: (as of the beginning of May 2014) Thursday, 25 Sept. – Global truck markets – 2025 and beyond Friday, 26 Sept. – CO2 Heavy duty vehicles – Load safety: practical experience for practical benefit (with demonstration) – IAA-China-Day 2014 Monday, 29 Sept. – Hazardous Goods Day (with demonstration) – LNG – the alternative fuel for commercial vehicles – Commercial vehicles of the future

Tuesday, 30 Sept. – Become a commercial driver! Exciting job, modern work station, stable post – Long-haul buses in Germany – environmentally friendly, attractive and barrier-free (with demonstration) – Together into new markets! Foreign trade promotion and development cooperation – carIT-Congress

Wednesday, 1 Oct. – IAA-India-Day 2014 – Green Logistics

C O M M E R C I A L V E H I C L E S

6 5 T H I N T E R N A T I O N A L M O T O R S H O W

SEPTEMBER 25 – OCTOBER 02, 2014 HANNOVER

www.iaa.de

Driving the Future



7

Do we need the turn of the turn? It would certainly be wrong to backtrack entirely, but we need a course correction in the monumental project that is the German energy transition. This is now obvious, leading the German government to put reform of the German Renewable Energy Act (EEG) at the top of its agenda.

There is no doubt that electricity from renewable sources is becoming increasingly important in the energy mix. However, several flaws in the design of the Act need to be corrected in order to prevent the opportunity from turning into a calamity. First of all, spiraling costs need to be brought under control. Last year, the EEG generated more than 20 billion euros in costs for an amount of electricity not worth even 5 billion euros on the spot market. Germany unfortunately holds the top position in an international comparison of electric-ity prices in major industrial countries. The average price of our electricity is more than twice as high as in the USA, and energy costs in the EU are on average lower by almost half.

The largest electricity consumers in Germany are commerce and industry, which together account for around 60 percent of electricity usage. Almost all companies in the automotive industry pay the full price with all taxes. The high energy costs are becoming increasingly unacceptable not just for many of our small and medium-sized companies. Several large companies are even paying hundreds of millions of euros every year just for the EEG surcharge.

According to calculations by the OECD and the International Energy Agency, the price of electricity has risen by 80 percent since 2000. This ever-increasing burden weighs on our companies, which have to face rivals in global competition. This significant competitive disadvantage bears the risk of causing lasting damage to Germany’s industrial base. Urgent countermeasures are needed. The risk of losing industrial production to competing countries with less ambitious environmental and climate regulations is growing. This would not only harm domestic employment and welfare but also, ultimately, the environment. The first warning signs are clear: companies from various sectors have already announced that they will be making new investments outside of Germany. The German automotive industry has already produced more vehicles abroad than in domestic factories since 2010. The price of electricity is accelerating this trend beyond the “normal” factors. Getting costs under control requires that renewable ener-gies be much more integrated into the market. The federal

Electricity Prices as a Competitive Factor: What’s Important to Industry during the Energy Transition

government is proposing a sliding “market premium” and plans to gradually require direct marketing of renew-able electricity generated from new plants. This will not be sufficient. A percentage-based premium on market profits would be more effective for generating greater competi-tion. The proposed tender would enhance this effect. The direct marketing requirement should be applied earlier than planned and to significantly more plant size classes. (continued on page 8)

Comparison of Industrial Electricity Prices in the EUIF group: 70 GWh < consumption < 150 GWh; as of: 1st half of 2013

Source: Eurostat, German Power Generation Association (VIK)

0 5 10 15 20

CyprusItaly

GermanySlovakia

United KingdomLatvia

Czech RepublicHungary

IrelandDenmarkPortugalAustria

SloveniaEstonia

NetherlandsGreece

SpainPoland

RomaniaFranceCroatia

BelgiumFinlandNorway

BulgariaSweden

MontenegroFYR Macedonia

Ct/kWh, prices including taxes (excluding VAT)



8

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Imprint

Publisher VDA Verband der Automobilindustrie e.V. Behrenstr. 35 10117 Berlin, Germany www.vda.de Phone +49 (0)30 897842 - 0 Fax +49 (0)30 897842 - 600

Responsible for contents Dr. Kay Lindemann Email [email protected]

Editor Tineke Bartsch, Dr. Christoph Muhle Policy Communication Email [email protected], [email protected]

Contributors to this Sandra Courant, Thomas Fabian, Political Report Marko Gustke, Matthias Krähling, Henry Kuhle, Peter Mair, Dr. Michael Niedenthal, Dr. Jakob Seiler, Stefanie Senft, Dr. Stefan Wöhrl

Status Beginning of May 2014

(continued from page 7) Several years ago, politicians wanted companies to increasingly deal with their power supply on their own. They have done this too, with high investment expenditures. In addition to energy-intensive firms, other sectors such as the automotive industry now have their own power plants. This independent production of electricity is highly efficient because the waste heat can be immediately used for production. It contributes to the success of the energy transition, so it is right and proper that, contrary to the initial plans, no EEG surcharge be levied on electricity that companies produce for their own use. The same should continue to apply to newly constructed plants as well. It is also essential that energy-intensive companies remain exempt from the EEG surcharge. The competitiveness of energy-

intensive industry is important for the automotive industry, even though most of our companies are not energy-intensive themselves. We need the entire value chain in Germany. What is branded a preference in Brussels actually compensates for a competitive disadvantage. This encroachment from Europe must be averted so that future technologies can be both devel-oped and manufactured domestically. It is clear that the energy transition is the reform challenge for Germany – hard-fought and doomed to succeed. However, we should not lapse into tunnel vision but rather take a wider view. We see that other countries are pursuing different paths, such as France, which has much lower electricity prices, or Australia, which is giving second thought to coal on the grounds that an energy transi-tion as in Germany is too expensive.

politikbrief 01/2014 - vda · further steps are needed. federal, state and municipal governments...

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