Germany launches EV initiative

German Chancellor Angela Merkel met in Berlin with 400 officials from politics, science as well as automobile and energy industry to streamline the country's electric mobility efforts.

Merkel said Germans were the first to build cars and excelled in doing so in the 20th century. It's therefore important, she added, "that in the 21st century we are again the nation that is able to build the most intelligent and environmentally friendly cars."

Under a national strategy electric mobility, all sides pledged to have 1 million electric cars cruise German highways by 2020.

While the carmakers vowed to invest $26 billion per year in developing electric cars, Berlin said it will decide on the concrete volume of funding after task forces formed at the summit have tabled first proposals.

The government is already funding electric mobility test projects with $700 million, including programs to develop the charging station infrastructure and boost battery technology, an area of expertise that is dominated by companies from Japan, Korea and China.

The sustainable-mobility market is set to grow significantly, boosted by ambitious national and European emissions reduction targets and an eagerness to reduce dependency on imported oil.

Germany's carmakers are a tad late to the green game, however, with the first German electric car expected to enter the market in 2012.

Daimler is banking on hybrid cars and electric mobility - but also on the development of the hydrogen fuel cell. The Stuttgart company hopes to have a fuel cell car ready within five years and hopes to launch an EV in 2012.

Volkswagen and BMW are lagging, with the VW E-Up and the BMW Megacity set for a 2013 launch. Volkswagen, which also owns Audi, is banking on highly efficient diesel and gasoline cars to bridge the transition period to full EVs.

Competitors from Asia are far ahead. Mitsubishi will introduce an electric vehicle this year, as will Nissan - and that's why Berlin has decided to fund research instead of subsidizing electric mobility purchases.

Ferdinand Dudenhoeffer, a senior automobile expert, said this was the right strategy.

"The main suppliers of electric cars today are the Japanese," he told Deutsche Welle. "Why support the sale of Japanese cars? Germany needs to invest in research and development if it wants to be powerful global competitor in this sector."

Yet even neighboring France is ahead of Germany.

Renault will introduce two electric cars this year. The French car giant has teamed with Better Place, the company founded by Israeli entrepreneur Shai Agassi, to snatch first-mover advantage when it comes to electric vehicles.

Their concept is aimed at extending the limited range of electric cars with a network of battery swap stations to be built by Better Place in several countries.

In Europe, the Better Place battery-swap model will be first tested in Denmark, a small country with a well-connected road system and a lot of green idealism.