Mercedes-Benz, the Untertürkheim plant near Stuttgart. A special access card is needed to reach the test course. The vehicles that are driven there, along bumpy roads filled with potholes, provide a glimpse into the future — one that outsiders are usually denied.
But on a cold winter day, Mercedes engineers are showing us one of their proudest achievements: a 26-ton truck that drives almost noiselessly and emits no exhaust gases. Its rear axle is driven electrically with power from lithium-ion batteries, providing a range of up to 200 kilometers (124 miles).
The carmaker has already received inquiries from supermarket chains, which could use the electric truck to deliver goods from warehouses to individual stores in urban areas. Wolfgang Bernhard, the head of Daimler’s truck division, confesses: “One or two years ago, I would have said: This will never work.” Now he plans to launch the electric truck in 2020.
BMW, Eching near Munich: Engineer Maik Schoeneich is working in one of the automaker’s testing facilities here. He previously worked overseas for BMW in Shenyang, a large city in northeastern China, where he had his first enlightening experience.
Whenever Schoeneich left his hotel, he had trouble breathing, felt the need to cough and could hardly see more than 50 meters (164 feet) in front of him, all because of the exhaust fumes from hundreds of thousands of cars. Back at BMW headquarters in Munich, Schoeneich began thinking about the future of cars, as well as his own career.
As an acoustics expert, he was working on minimizing the noise from internal combustion engines. It didn’t feel like a future-oriented job, though. “I still have 20 years of my career ahead of me,” says the engineer, “so it makes sense to do something new.”
Schoeneich decided to join a new world — that of silent, zero-emissions electric powertrains. He earned a master’s degree in electric mobility and vehicle electrification at the Technical University of Munich, which helped advance his career in the company. Now Schoeneich tests electric cars for BMW.
Volkswagen, a brick building in Wolfsburg: A badminton field, a slot car race track and a foosball table are set up in the former foundry. When Johann Jungwirth comes to work on this particular morning, he hears the popping sound of people playing table tennis. “Great,” he says. “After seven years in Silicon Valley, this feels like home.”
Jungwirth worked at Apple in the development of driverless cars. Now the 43-year-old chief digital officer’s job is to drive the VW Group into the future. Jungwirth shows up to work in a blue sweater. He doesn’t have his own office, but a desk in a large room, together with his staff of 50 employees. The founders of Google and Apple, Larry Page and Steve Jobs, often visit the office — virtually, of course. Jungwirth quotes them constantly, especially Jobs, who famously said: “The people who are crazy enough to think they can change the world are the ones who do.”
Jungwirth is doing his best. He loves the idea of transforming cities into more livable environments, because self-driving cars will not require parking spaces in downtown areas. Freeing up all of this space, he says, will provide more room for “parks and playgrounds.”
In Wolfsburg, a former Silicon Valley executive is developing scenarios for tomorrow’s mobility. In Munich, auto engineers are preparing for the age of the electric motor. And in Stuttgart, a Daimler executive is raving about an electric truck.
Uncertainty and Existential Fears
On the one hand, this much optimism has rarely been on display in the German auto industry. On the other hand, the industry has probably never been so filled with uncertainty and even existential fears.
The public verdict is in: Daimler, BMW and Volkswagen will have great difficulty preventing their decline — at best they can delay it. German automakers are producing air polluters with gasoline and diesel engines. They are being overtaken by companies from Silicon Valley and will soon be bested by Chinese manufacturers. Both offer electric cars and will soon be selling self-driving vehicles. Hundreds of thousands of jobs are at stake in Germany. And this doesn’t even account for U.S. President Donald Trump’s threat to impose tariffs on German cars built in Mexico.
The truth is that German automakers have jeopardized their own future. With the arrogance of manufacturers who have been operating a business successfully for more than a century, they did not recognize the challenges at first, and then they downplayed them. They insisted that the market would not be ready for electric cars for a long time to come. Instead, they continued to invest in diesel technology, as if it were part of the future.
Upstaged By a Silicon Valley Start-Up
But then came Tesla, a startup that had never built a car before, and upstaged the German manufacturers with its Model S electric car. Then Google began testing its self-driving cars in San Francisco. And finally, Apple began developing the technology.
At some point the established carmakers realized that everything was at stake. It was about the future of mobility and the “second invention of the automobile,” as Daimler CEO Dieter Zetsche puts it. And the survival of established automakers.
The internal combustion engine, the heart of the automobile until now and a large part of the German auto industry, will have to be replaced with a new motor in the foreseeable future: the electric engine.
In the automobile industry, a way of operating that has been the norm has disappeared. Things once considered crucial will soon become redundant. Electric vehicles require no valves, pistons, air filters and throttles, no fuel injection systems, alternators, oil filters and starters, no turbochargers, fuel pumps, catalytic converters and exhaust systems, no tanks and many other elements.
The capabilities that Daimler, VW, General Motors, Ford, Toyota and all the other automobile manufacturers possess in these areas will no longer be needed in the future. New competitors can suddenly become technology leaders if they are particular effective at bringing together batteries, control software and electric engines.
Tesla has led the way. Chinese manufacturers, which are not yet up to current standards when it comes to the internal combustion engine, are also preparing for the great leap. And the Chinese government is supporting them, in the hope that electric cars will enable its domestic industry to finally conquer the world.
An Inevitable Switch
Paradoxically, the internal combustion engine is on its way out precisely because it is so successful. There are too many cars, and with their exhaust gases they are harming the climate and human health. That’s why governments in many countries and cities are eager to bring about technological change, partly through regulations and laws, and partly with subsidies for electric cars and penalties for vehicles with gasoline and diesel engines.
China wants to impose a quota for electric vehicles. Large cities in Asia and Europe are weighing bans on vehicles with internal combustion engines. Beginning in 2020, European manufacturers could face billions in fines if they fail to comply with the applicable limits on CO2 emissions, which is hardly possible without electric vehicles. All of this points to the inevitability of the switch to electric mobility. The only question is how quickly it happens and how the old technology will continue to exist in parallel.
One in seven jobs in Germany depends directly or indirectly automobile manufacturers and their suppliers, companies like Bosch, Continental, Mahle, ZF Friedrichshafen, Schaeffler, Getrag and others. The degree to which these jobs will be saved or replaced with new ones in electric mobility depends on how effectively the companies cope with the transition — if they are even able to do so, or whether the auto industry faces the same fate as steel manufacturers and energy suppliers: gradual decline.
The old and new automobile worlds are in close proximity to one another at the BMW plant in Landshut, near Munich. It smells of lubricating oil in the hall on the ground floor. Mechanics in boiler suits are screwing together engines, so-called special engines, which are only built in small numbers. They have coveted jobs. The work is challenging and interesting, and yet it probably doesn’t have much of a future.
Anyone seeking a job with future prospects tries to get reassigned to the plant’s second floor, where BMW produces electric engines. “We are doing pioneering work here,” says one employee who has made it to the second floor.
BMW has invested €3 billion ($3.2 billion) in the development of its i3 and i8 electric cars. The company has risked a lot, more than VW or Daimler. It led the way technologically, and yet this still hasn’t done the company much good. By November 2016, BMW had sold only 100,000 of its i3 and i8 models, compared to 2 million models with internal combustion engines last year alone.
Electric cars are still more expensive and don’t perform as well as vehicles with a conventional powertrain. Customers are holding back. There are very few pioneering workers to be seen in the Landshut factory, where BMW makes its electric engines. One of the reasons for that, however, is that production of electric engines, with their relatively simple design, is highly automated.
Most of the work is done by robotic arms, which look like giant dentists’ drills as they move behind glass walls, and automatic coiling machines that roll up copper wire. Even if there is a sharp increase in the production of electric engines, it will never create as many jobs as the production of gasoline and diesel engines.
Thousands of Jobs at Risk
At BMW, about 4,000 jobs depend on the internal combustion engine. This is an extremely small number compared to Daimler and Volkswagen, which develop and produce more parts, such as transmissions, which BMW buys from suppliers. According to estimates by the IG Metall metalworkers’ union, of the 250,000 jobs in Germany that depend on the internal combustion engine, some 65,000 are in jeopardy.
If people around the world started buying nothing but electric cars within a year, the consequences would be dramatic. But the transition to electric mobility will take a long time. Horst Lischka, who represents IG Metall on the BMW supervisory board, says: “Those who are flexible and willing to take on new responsibilities will still be working at BMW in 10 to 15 years.”
Engineer Maik Schoeneich is probably one of them. He is currently involved in testing to see how electric cars react to heat and cold in southern France and northern Sweden. Now that he has his graduate degree in electric mobility, his job is secure for the time being.
But Schoeneich is part of a small minority. So far, only 51 engineers have completed the advanced degree program in electric mobility. There are limits to retraining. Not every assembly line worker can become an IT expert. “We can’t turn a test bench driver into a high-tech professional,” says a senior BMW executive.