The Frankfurt motor show is big. It’s like if they took Sydney’s international and domestic airports, tripled it in size, took away any form of cohesive internal transport and put lots of cars in it. Even then, I think the Frankfurt show is bigger.
Every two years when I attend the show I always vow that next time, I will actually see things. The problem is, the show is so big, and we have so many executives to interview, that it’s all but impossible to actually see every one of the dozen or so halls that house the show. And each one of these halls is a gigantic display of extravagance as manufacturers try to outdo each other for sheer ‘wow!’ factor.
In saying all that, I did actually get to walk around a bit this year and the one thing that became bloody obvious was that 2017 Frankfurt motor show was all about electric mobility (don’t fall asleep, yet).
BMW did an entire 30-minute presentation to the world’s media as the very first scheduled item of day one, and didn’t even mention its new Z4 concept. Instead, it was all electric this and electric that. Thankfully, no one fainted.
BMW even had people riding around on electric scooters and motorbikes during the presentation. I wouldn’t have been surprised if they were also offering free hugs with Penguins. It was that ridiculous.
This is a brand that makes twin-turbo V8 performance cars that like to go sideways. This is a brand that less than a decade ago built the V10-powered M5, its engine derived from Formula One technology of the time! Who are they kidding? We want the old BMW back, thanks. We know it’s just hiding in the background.
If you take all the hype and shameless self-promotion of electric mobility at face value, you would think that Elon Musk is right – electric cars are killing the internal combustion engine at a rapid rate. But that’s simply not the case, not for a very long while anyway.
You see, while the German and the world’s mainstream media continue to hammer the internal combustion engine (ICE), and more major cities talk about wanting to ban the ICE from a certain date, all the car companies seem paranoid to even mention development work on fossil fuel-powered vehicles. Well, except Mazda. It’s almost as if, the entire talk track is about electric and anything other than that is blasphemy.
It makes great business sense, of course. No one wants to be targeted as the manufacturer that isn’t focusing on ‘future mobility’. It’s not only bad for the company’s share price, but the media backlash is unwarranted and unwanted.
Apart from Tesla (obviously), there is no mainstream car company today, that we can find, which will admit it’s investing more of its research and development budget in electric vehicle development than the continued development of the internal combustion engine and its associated technologies. Think about that for a minute.
So lets look at the facts. In Europe, electric vehicle sales are up around 30 per cent, which seems huge, but on the whole they account for just under two per cent of the market. That’s it. In Australia, pure electric vehicle sales are up year to date by more than 50 per cent, almost entirely thanks to Tesla and its Model S and Model X vehicles. Yet, with just around 750 sales from January to August this year, Tesla makes up a tiny 0.01 percent of the new car market! Yes, the end is nigh for ICE! Run for the hills, children.
Everyone from Mercedes, to BMW, Audi and even Porsche talked nothing but electrification. There were Greenpeace protesters at the Frankfurt show that held up signs indicating their displeasure at the likes of Volkswagen for not doing more to rid the world of the awfulness that is the ICE and particularly, its diesel engines.
So herein lies the crux of the problem. Dieselgate. It was Elon Musk’s wet dream. If you actually track the share price of Tesla since Dieselgate hit the media (which happened two years ago this month), it is up more than 65 per cent. Volkswagen’s share price nearly halved when Dieselgate broke, but it has recovered by around 48 per cent since. It is still down by nearly half since its peak highs in April 2015.
Volkswagen, or any of its brands, is not going to talk about pouring cash into the internal combustion engine. That would be seen as a big no-no by everyone involved. Can you imagine the headlines?
At the motorshow, the boss of Volkswagen Group – Matthias Mueller – talked loud and proud about investing 20 billion euros ($30 billion) in zero-emission vehicles by 2030.
Sounds impressive. If you break that up into the next 12 years, that’s roughly $1.67 billion euros ($2.5 billion) each year invested into electric mobility. But, do you want to know what Volkswagen group’s financials show for total R&D budget in fiscal year 2016? How about 11.5 billion euros ($17.5 billion). Yep!
Assuming the budget remains relatively unchanged going forward, only around 15 per cent of the brand’s R&D budget is being spent on electric mobility. That makes sense, because most brands believe electric cars will only make up about 15-25 per cent of their model lineup by 2025-2030. So why the hell wouldn’t they invest heavily into the other 75 or so per cent of their vehicles?
Is Volkswagen working on a new generation of diesel engines? Of course, it would be absolutely mad not to. But is VW going to talk about it? Not on your life.
BMW will, though. The boss of Mini was honest and proud enough to admit that diesel still has a very bright future at the BMW group and that the brand looks forward to selling plenty of them in the coming years. He even went on to say the current talk around diesel engines is not rational, but driven by political agendas, and he is dead right.
Am I saying we shouldn’t embrace electric cars? Far from it. I love Tesla and what it has done for the industry, but it comes at the car from a different approach. Tesla doesn’t make electric cars, Tesla makes a technology statement riding on four wheels. For that we love Tesla, dearly.
Let’s be realistic about the uptake of EVs, however. They are not going to be the mainstream form of personal propulsion for many more decades. I would predict it would be more than likely that it will take at least until 2050 for the world’s total vehicle sales to switch for the first time in favour of electric vehicles over those those using an ICE. This doesn’t mean that some markets like California and parts of Europe don’t get there far quicker. But globally, we are some time away.
So, while the marketing and PR departments of mainstream car companies are doing their very best to electrify us with their messaging, the reality is far different. There are tens of thousands of engineers around the world, at this very instant, who are working flat-out on the next-generation of internal combustion engine technologies, both petrol and diesel. There are more engineers doing that, than there are working on electric mobility. Believe it, because it’s true.
Ignoring all the environmental issues of sourcing, making and recycling batteries, the electric mobility future we have all dreamed of is still coming. It’s going to be good and we will save lots of penguins in the process, but it’s not coming for a while.