Commissioner sings “Volar-e” but the European driver no “Cantar-e”

Antonio Tajani, Sebastián Salvadó, President of the RACC, and Carles Grasas, CEO of Applus+ IDIADA, posing in front of Volar-e (from left to right)
(EC Audiovisual Services)

It was the last day of February when the European Commission decided to organize a pompous event to test the “amazing” performance of a new electric race car in the Formula 1 Circuit de Catalunya in Barcelona. Its name is Volar-e and I am sure Antonio Tajani, the Commissioner responsible for Industry and Entrepreneurship that was present in this pointless event, picked the name of this model in order to Cantar-e that it is his own Italian ingenuity that brought to life this “groundbreaking” masterpiece of modern engineering.

This hybrid supercar, the development of which was half funded by the Spanish company Applus Idiada and half by the European taxpayer, was heavily advertised as a miraculous accomplishment. Particularly, according to the European Commission, “this event is not all about showing a powerful and futuristic car: one of the main objectives that the European Commission is targeting with the construction of the Volar-e is to address worries that hold consumers back from considering the possibility of purchasing an electric car, such as limited driving range and long charging time”. Let’s see now what kind of worries this event is actually addressing  to the European consumer.  Is the European taxpayer’s money used to fund events and projects that are meaningful to the European society?

The Commission did not invent the wheel in Rambla

Did the Commission invent the electric wheel in Barcelona? Definitely not! The automotive industry did not wait for the Commission to show them how to make fast electric cars. There are several electric models produced by various companies, some of them are remembered about their performances even by the most demanding race driver, years before Mr. Tajani baptized a car in 2013 eating paella in Barceloneta. The examples are many: the fastest being Audi R8 etron and Tesla roadster followed by Chevrolet Volt, Toyota Prius,  Renault Fluence, Nissan Leaf etc.

The European Commission, though, in its press memo on the event does not omit to refer to glossy technical details like the 1.000 horsepower, the top speed of 300 km/h and the 0-100 km/h in only 3.4 seconds. That is amazing! The consumers of Europe can get out in the streets now to celebrate! No need to worry anymore about buying a boring electric car that goes slowly. These people have really made it this time. You can now break the speed limits with Volar-e and then you can go home and plug it in your garage! Doesn’t this relieve all your worries and second thoughts you used to have about buying an electric car?

It seems that those bureaucrats at the EC have lost contact with reality. How is it possible to think that it is the low speed and the limited horsepower the obstacles that keep the European consumer from buying electric cars? First of all, this assumption is not logical at all. The market segment of the consumers that are buyers or potential buyers of hybrid cars does not care so much about these performances of the car but rather they are driven by their contribution to the betterment of the environment with their purchase. What is more, the big issue with electric cars is nothing but their cost.

With the exception of the small and impractical Renault Twizy, one needs at least 20.000 euros to buy an electric car. In times of crisis and even in prosperity, this price is too high for the average European consumer to afford, not to mention the big cost to maintain the vehicle. The real worry and issue of the consumer, Mr. Tajani, is the price and not how fast an electric formula 1 car can go. The big question is what the Commission is doing for the real issue with electric cars rather than spending mindlessly our money in order to capture the attention of the media about their green work. This is pure hypocrisy. What have you done to lower the cost of electric cars in Europe Mr. Tajani?

The answer is not much. Perhaps the son of a Commissioner would afford to buy an Audi R8 etron super car which is a pure engineering miracle, whose price reaches the astronomic amount of 100.000 euros, but certainly the average European does not. And the poor Audi R8 etron has only 313 PS horsepower. Imagine how much the super car Volar-e costs that has 1.000 PS horsepower. Certainly there would be no Cantar-e after you find out.

Coming down to the European e-Reality

Forbes in their story on the electrical cars in Europe in 2012 quote the Detroit news that reported on the issue: “2011 was to have been the Year of the Electric car in Europe, but sales were so slow as to be barely measurable. The combination of severe economic downturn and less than compelling prices and performance means that you can discount a sales surge in 2012. European newsletter Automotive Industry Data (AID) said that despite meaty government subsidies, electric cars managed a market share of 0.09 per cent in Western Europe last year, with France leading the way with 2,630, Germany a close second with 2,154 and socialist Norway third with 2,038. Britain managed four-figure sales with just over 1,000, while Greece in last place failed to trouble the scorers with zero.”This gives us a good taste of what is the situation with the electric car market in Europe and also we can all understand how extremely vain can be the Volar-e event in Barcelona last week.

Moreover, in the same story Forbe’s writer Jim Motavalli cites the statement of Sergio Monteiro, Portugal’s Secretary of State for Public Works, Transport and Communications: “The average cost [of an EV] is around [$45,000 USD] in Portugal, and we have a reduction of [more than $6,200 USD] subsidized by the state. We only managed to sell 200 vehicles [in 2011].” Mind you that out of those, 60 were sold to government officials. Despite the numerous charging points (1.300) in the whole country and the significant tax incentives that the country is giving to the Portuguese consumer, EV (Electric Vehicles) are not selling at all in Portugal. Is it because they do not make 0-100 km/h in 3.4 seconds, Mr. Tajani? I don’t think so.

Besides, looking at the industry’s perspective on the issue, Mitsuhiko Yamashita, Nissan’s Vice President referred to the terrible sales performance of the company’s promising electric car Nissan Leaf in Europe since early 2011 in comparison to other markets in the world: “We already sold more than 27,000 vehicles worldwide as of the beginning of April,” “Thirteen thousand in Japan, 11,000 in the U.S…We just started sales in Europe but we’ve sold 3,000.” Mr.Yamashita further explains concerning the estimated dro p of the price of electric cars in Europe that: “it takes maybe five to ten years, ten years on average. But during that time frame, I’d like to expect some type of support from the government.”

However, it is not only the price of EV that stops European consumers from buying. It is also the maintenance cost as well that is considered to be overall bigger than a gas engine car. According to Mike Rutherford from the Telegraph, “cars with internal combustion engines are, all things considered, generally less expensive to buy, own and run than those with rechargeable battery packs. The pros of electric vehicle (EV) ownership are still outweighed by the cons”. In addition, Pat O’ Dohery, CEO of Ireland’s Electricity Supply Board expressed his skepticism on the future of EV in Europe, since there is not yet any solid and unilateral infrastructure across the member states, in order for someone to be able to charge his EV traveling from one country to the other.

Is there a solution to the e-issue in Europe?

Various recipes have been used to contemplate with the problematic performance of electronic cars in Europe. On the one hand, the neo-Keynesians, supporting that demand drives economic growth, have tried to subsidize purchases of electronic vehicles to make the demand bigger. Having said that, I mean mainly governments’ tax incentives. It seems that the European Automobile Manufacturers Association (ACEA) supports the neo-Keynesian doctrine. On the contrary, according to the neoclassical economic solution, the government should act as an intermediate to secure the equilibrium at the market. In the case of EV, according to that doctrine, consumers should bear the weight of the gas consumption that is environmental impact. An example of the application of this theory is the existence of carbon taxes and emission schemes that have increased significantly the price of gasoline compared to the cheap gasoline in the USA.

Apparently, neither of the two approaches has managed to release the market of electric cars in Europe. It seems that the European Commission should look at the issue now from a different perspective rather than spending tons of money for events under Sagrada Familia. First, the EU must give incentives directly to the car industry to encourage the car companies to invest more in EV research, but not only as a long shot project used only for branding. It is true that many of those companies possess in their pipeline a good number of electric models to show every year at the International Motor Show in Paris or Geneva to catch the attention of their customers and media. But this is not the point here. The EU needs to make clear to these companies that they should not just focus on making project cars or production cars that are bound to have negligible sales. Instead, the EU needs to sit down with ACEA to find a way how to make the EV technology cheaper in Europe. I think if the European Commission had the strong will to make this technology affordable to the European consumer, they could accomplish that if it was working hands on with the car manufacturers to give them incentives to make the EV research cheaper fast or to compensate them for investing significantly in EV research. The bottom line in all these actions is to bring the price of EV down so that they do not have places only in movies but also in the European roads.

Second, it is well known that one of the reasons the customers would not want to buy an EV is the cost of maintenance. The batteries for EV are quite expensive and on the top of that the mileage they cover is very small. The European Commission instead of trying in vain to compete with a Bugatti Veyron by driving an electric car in Barcelona, should allocate funds in the research of EV batteries. This research would find ways to enhance the battery performance like the autonomy, the energy they need for a full charge and also their price. Moreover, one needs to take into account the cost of recharging them that is not negligible at all if one thinks how often he has to plug his car in his garage. Then, a second thing one would expect from the Commission would be to discuss with the electricity power industry to have better prices for owners of EV.

But then what about the people that do not have a garage with a plug? Is there any infrastructure on the streets to park and charge EV? I am afraid not! This tends to be a marketing joke. You can see some park and charge spots only outside big malls in metropolitan areas or in universities or in the Place du Luxembourg in Brussels where of course the European Parliament is located. It seems that everybody wants to look green for marketing and communications purposes but no one is willing to take the extra step.

The real reason why the EV project fails

If the European Commission takes this challenge, to build solid park and charge infrastructure for EV, then the big lobbying groups of the Oil and Gas Multinational companies would pull the ear of the Commissioner and the peer.  And this is exactly the heart of the issue. Companies like BP, Shell or Exxon Mobil would lose billions if the EV technology gets cheap, widespread and affordable for people together with the maintenance and infrastructure needed to operate an electric car. And the million euro question now is: how willing is the Commission to perform its role, which is to take the challenge for the common good of Europe and stand against those big conglomerate oil interests by acting independently and impartially to truly make Europe a Greener place.

To the Europeans’ disappointment, the answer to this question is: Not much!