As car makers fight for sales around the world, pressure is mounting on them to gamble billions on developing alternatives to greenhouse-gas producing fossil fuels. The choice each makes now will have long-term effects, David Crossland, Foreign Correspondent, reports from Berlin
The world's car manufacturers are being forced into a huge gamble that will turn some into successful visionaries and others into abject losers.
They face a simple quandary - all of them need to develop affordable vehicles that do not use fossil fuels. But none of them can say for sure which green technology will come out on top - pure electric cars, hybrid vehicles, hydrogen-powered cars or ones that run on fuel cells.
Ask different car makers and you will get different answers. BMW, the world's largest premium car maker, is placing its faith in pure electric drive technology and will be launching its first mass-market electric car, the i3 plug-in hatchback, at the end of the year.
Its domestic and global competitor Audi is opting for plug-in hybrid models combining an electric engine with a combustion engine. Another German maker, Daimler, is tenaciously researching fuel-cell technology. Renault, meanwhile, the French manufacturer struggling as sales tumble, has just launched its fourth electric model, the Zoe.
It's a daunting prospect to invest billions of euros in electric vehicles at a time when there are just 12,000 of them on Europe's roads, without nationwide networks of charge points and with engineers constantly coming up with radically different solutions for electric cars - ranging from battery-switching stations to charging on the move through adaptive road surfaces.
But they have no choice. All around the world, governments are tightening up emissions restrictions. At the moment, German premium brands are enjoying record sales growth for their combustion vehicles in emerging markets such as China - but that could change overnight.
"Take the example of Beijing," says Gregor Matthies, an car analyst at the strategy consultancy Bain & Company.
"The streets are constantly congested, the population is suffering from the smog. The same is true of other Chinese conurbations. If such cities suddenly introduce travel limits on combustion cars, and something like that can happen very fast in China, that would be a major blow to the German manufacturers that are very successful there."
At present, many electric vehicles are still prohibitively expensive. A small electric car can cost as much as a premium combustion vehicle. And the range tends to be limited to just 100 or 150km per charge.
Car makers are working to make electric cars more affordable. The Zoe is competitively priced at €21,700 (Dh104,935), on a par with mass-market petrol peers. But state help in boosting demand and setting up an infrastructure for electric cars is likely to prove crucial.
A number of governments have introduced purchase grants. France, for example, subsidises electric-car purchases by as much as €7,000 or up to 30 per cent of a vehicle's price. Germany, surprisingly perhaps given its commitment to green energy, has no such purchase subsidies but may need to change its mind if it wants to meet its ambitious pledge to have one million electric cars on German roads by 2020.
In Britain, the purchase grant is £5,000 (Dh28,159) or up to 25 per cent of the car price. The British government, which has devoted £400 million to promoting demand for so-called ultra-low carbon vehicle technology, offers grants for setting up electric vehicle charge points under a scheme launched in early 2011.
The Plugged in Places project in eight regions of the country has provided some 2,800 charge points so far, 70 per cent of which are publicly accessible along streets and in car parks, according to the UK department of transport. That is in addition to some 5,000 charge points set up by other organisations.
Most electric vehicles are expected to be charged at home or at work. But a dense public infrastructure of charge points is vital to making potential buyers confident they are a viable alternative, say experts.
There are three types of chargers being set up in public areas - rapid systems can recharge a vehicle in about 20 minutes and are installed in busy locations or near strategic road networks where many people can access them in quick succession. Fast chargers, which reload batteries in two to three hours, are suitable for car parks, and standard chargers - up to six hours - are being fitted in long-stay car parks.
The aim of the project has been to gain experience and start to develop infrastructure, the lack of which is a major deterrent to buying an electric car. After all, if the range of your car is just over 100km, you are going to worry about getting stranded unless without places to recharge.
Plugged in Places is an ongoing project. Launched two years ago, the match-funding state grant has now been extended to more regions of Britain. In addition to providing more charge points, it has helped to provide valuable insights into the use of electric cars. Their limited range, it appears, is less of a drawback in practice than one might think, according to research undertaken by Newcastle University in the north-east of England, one of the regions targeted in the Plugged in Places programme.
The university logged the driving and charging patterns of 44 electric vehicles and came to a surprising conclusion. "Journeys taken with electric cars were only just short of the national average for normal cars," says Yvonne Huebner, a senior research associate at Newcastle University. "I think people overestimate how far they drive because nationally in normal private cars, 93 per cent of the time people go under 20km. Even if you go there and back that's less than the range of an electric car. "Some people did push it, there was one journey that was 117km long," she adds.
"You speak to a lot of drivers, and the more they drive the cars, the more confident they get. [Electric cars] accelerate brilliantly.."
Ms Huebner says many people were put off electric cars by "range anxiety" but adds increasing the number of charge points and getting more people to try electric cars would help to ease that.
"What I've seen is that as soon as you get people into the cars and get them to experience them, they're converted," she says.
"It's important to get a critical mass of people who experience driving an electric car. "If that happened, you'd probably get a big push in market demand. But unless you get people into the cars I think it will be very slow progress."
Similar projects are under way around the world. Germany currently has some 2,000 charge points and various cities and regions have launched publicly-assisted schemes to boost that number.
The European Union this year called for the construction of hundreds of thousands of charge points across the EU, with the German-designed Mennekes connector chosen as the norm for Europe.
Lars Thomsen, the founder of the consultancy Future Matters, which researches technology trends, said the next generation of electric cars will have a far greater range of 250 to 300km, which should banish most people's range anxiety. And their prices will fall sharply.
"Technology change usually goes hand in hand with business logic," he says. "At some point the tipping point will be reached: when the new technology is cheaper to buy, drive and maintain while offering the same driving performance, range and speed. With electric cars that will be as soon as 2016-17, based on current developments.
"What's got to come now, and this makes the years 2013 and 2014 so crucial for electromobility, is the products," Mr Thomsen says.
"They've got to be attractive, they've got to be every bit as safe and comfortable as conventional petrol and diesel cars, and they have to be marketed accordingly."