The push toward electric cars has been widespread and well documented since the 2009 Frankfurt Motor Show. Yet, German companies have been either lax or reluctant to adopt the new technology despite the success of visionary pioneers such as Elon Musk with Tesla and Carlos Ghosn with the Nissan Leaf.
In fact, Daimler had investments in Tesla but sold its shares in 2014.
Now, the mad rush is on to cover lost ground. The latest Frankfurt show this year saw dozens of German electric concept cars that will hit the markets over the next five years.
The fact remains that ultimately German companies made too much money from non-electric cars to focus enough on the future.
German car manufacturers are commanding huge profits from premium fossil-fuel brands they produce. The result is that they are reluctant to change a pattern that is very profitable and convenient.
Electric cars are expensive to produce and their profit margins are very slim. The industry has been waiting for costs to come down enough to make a partial shift toward battery power.
China’s move to impose a quota of electric vehicles on car imports and the announcements by some European governments of a 2040 deadline for producing only electric and hybrid cars, however, has caused a scramble by all car companies to make up for lost time.
To prepare for the expected drop in profit margins, German companies have focused on cutting costs — by up to €4 billion in Mercedes-Benz and $2.4 billion in BMW.
In the short term, German companies may enjoy a good run of profitable gasoline-powered vehicles. But in the long run, these companies may have missed a rare opportunity to lead in electric mobility technology. Instead they waited and let others take the lead — and the rewards. The result is that China now dictates the ratio of electric cars it needs and German companies have no choice but to comply.
• Adel Murad is a senior motoring and business journalist, based in London.
Short-term gain puts brakes on German car companies’ electric dreams
Short-term gain puts brakes on German car companies’ electric dreams
Price cuts drive sales of Saudi-owned electric car
- Lucid delivers more vehicles than expected as it prepares to launch luxury new Gravity SUV
RIYADH: The majority Saudi-owned electric car maker Lucid delivered more vehicles than expected in the past three months as price cuts helped boost demand.
The company delivered 2,394 cars from April to June 30, above analysts’ predictions of 1,940.
Lucid produced 3,838 vehicles in the first six months of 2024 and needs to make more than 5,162 cars by end of the year to meet its annual output forecast of 9,000. It made 8,428 cars in 2023.
“I think at this point everything is shaping for them to achieve that,” said Andres Sheppard, senior equity analyst at Cantor Fitzgerald. Lucid will produce and deliver more cars in the second half of the year because of the usual seasonal effects on the industry, he said.
Demand for electric vehicles has grown more slowly than expected pace in the past year, under pressure from high borrowing costs, economic uncertainties and consumer preference for hybrid alternatives.
Lucid and the market leader Tesla have responded by slashing prices and offering incentives such as cheaper financing options. Lucid, which is 60-per-cent owned by the Public Investment Fund, the Kingdom’s sovereign wealth fund, cut the price of its flagship Air model by 10 percent in February.
Its new Gravity SUV model, a rival for Tesla's Model X, goes into production this year and will cost about $80,000.
