Government necessary for EV uptake: Benz

MERCEDES-BENZ Australia/Pacific says it is essential for governments to play a part in incentivising the adoption of electric vehicles (EVs) and hybrids, despite the managing director of compatriot brand Volkswagen Australia stating otherwise.

According to Mercedes-Benz Australia/Pacific public relations, product and corporate communications senior manager David McCarthy, the global markets where EVs have been widely adopted have had government help.

“It’s not just a matter of the government giving you a cheque, it can either be foregoing revenue, it can be … working with the different tiers of government to install a charging station, it can be working with the power companies,” he said.

“I believe that yes, government has to be part of the negotiation and the discussion – it can’t happen without them.

“You want to mirror what’s working in the rest of the world, and what’s working in the rest of the world is when governments engage with industry, you get an outcome that works.”

Earlier this month, Volkswagen Australia managing director Michael Bartsch told journalists that he believed government incentives were “fundamentally wrong” and that subsidising EVs was not a sustainable business model.

“At some point, the government will say, ‘we’ve done this long enough’,” he said.

“I’ve seen it in the US with the (Toyota) Prius and the Nissan Leaf. At a state level, the government gave US$3000 subsidies on these cars. Sales went through the roof. Then they got taxpayer fatigue, they pull it off, and all of a sudden, the whole thing crashes.

“You really want to avoid that here.”

However, Mr McCarthy said he believed a holistic approach needed to be taken in pushing EV acceptance, with governing bodies involved at every stage.

“It’s a lot of moving parts and when you don’t have the government … being part of the discussion, you run the risk of, you proceed on a base and then the government goes ‘oh actually, we think you should do it this way’,” he said“The downside of that sometimes is regulation, but if you proceed on a basis with no guidelines: one, you can make the wrong choice, but two, you run the risk of government coming in and saying ‘hang on, we think you should do it this way’, and ultimately governments win.

“So you’ve got to engage them, but they’ve got to engage too.”

Mr McCarthy said conversations were taking place with the government at an OEM level, as well as through the Federal Chamber of Automotive Industries (FCAI) and the recently-formed EV Council, as well as with other manufacturers on a co-operative charging solution that would be scalable to deliver 350kW fast-charging in future.

“If we just develop a charging station network and BMW do it and Audi do it and everyone else, what’s the point?” he said.

“We’re going to standardise the plug, I think its end of 2018, so every plug-in or electric car in Australia will have the same plug … that’s the first step.

“But you can’t develop a charging network on your own – I mean one brand has, good on them –but if you share the costs and share the development, ultimately you’re going to have more of them … it really needs to spread.”

Mercedes’ first full electric vehicle – a mid-size SUV previewed by the Generation EQ concept at last year’s Paris motor show – is due in 2019 and is expected to be followed up with a small hatchback foreshadowed by this year’s EQA Frankfurt show car.

The premium German brand also offers its C-Class mid-sizer, GLE large SUV and flagship S-Class sedan with plug-in hybrid powertrains, each capable of around 30km of pure electric driving range.

Mr McCarthy said the next iteration of its plug-in hybrid line-up will feature more range for reduced range anxiety, while its full-electric offerings will sport more than 400km of driving distance.

“Range anxiety is the biggest issue people have with an electric car. Their perception is there, the reality is something different,” he said.

“I think when most of the plug-ins move to a 50km range – which they will over the next year or two because that’s the standard in China to get the tax concessions – 50km for most people is going to quite achievable, something they could use every day.

“Our pure electric vehicles will have a 400km-plus range, that’s what it needs to have for people to feel comfortable using it.”

In terms of cost for its electrified offerings, Mr McCarthy said the incoming all-new EV is primed to take advantage of its development from the ground up and its popular market segment.

“The closer you can make the price to whatever else you’re offering (the more attractive it is as an option), and the secret to that is, if you are building an electric car on a specific platform, it’s designed for that, you’re not re-engineering it,” he said.

“So having a new platform allows you to bring the cost down, and as the battery technology changes as you are able to produce the batteries quicker, you can reduce the cost – but there’s still a big gap.

“(The new crossover EV is in a) segment of the market … that is growing the most, that’s the one that we believe will be the highest uptake of and because that platform is scalable and it’s an electric platform, you’re not having the issues – one of the problems with plug-ins is how much space can you allocate for the battery, how much boot space do you lose, how much luggage capacity do you lose.

“With an electric platform, you don’t have that issue, so you don’t have to accommodate all the other stuff.”