FRANKFURT/DUESSELDORF, Nov 17 (Reuters) – Volkswagen (VOWG_p.DE) plans to double staff numbers at its charging and energy division, roll out new payment technology next year and strike more alliances to take on Tesla (TSLA.O) in a key electric vehicle (EV) battleground: power infrastructure.
By ensuring there are enough fast-charging plugs – and enough power – for the EVs it wants to sell, Europe’s biggest carmaker hopes to convince drivers worried about battery ranges that they can ditch their fossil fuel cars for good.
Underlining its electric ambition, Volkswagen has drafted in power industry veteran Elke Temme, who spent nearly two decades at German energy companies RWE (RWEG.DE) and Innogy, to help the carmaker get in better shape to take on Tesla.
In the job since January, Temme, 53, has been tasked with bundling the carmaker’s various power activities such as procuring energy, enabling customers to charge their cars at home, and on the road, and selling the electricity required.
Getting this done will require a bigger workforce and Temme plans to double the staff at Volkswagen’s European charging and energy division, known as Elli, to about 300 in 2022, having already tripled it this year, she told Reuters in an interview.
“We’re investing in huge growth areas that don’t always have to be profitable right away. We always see these investments in the overall context of our group strategy,” she said. “That’s why building up a comprehensive infrastructure is key.”
Temme declined to specify the budget she has been given but said Volkswagen, led by Tesla admirer Herbert Diess, has approved the investment requests for the division, which also sells home battery storage systems similar to Tesla’s Powerwall.
Volkswagen leads the pack worldwide by far with its investment plans for EVs and batteries through 2030, according to a Reuters analysis, and it is planning to spend 35 billion euros on battery EVs by 2025.
PLAYING CATCH UP
But when it comes to the networks of fast-chargers that many analysts believe are crucial for bringing EVs into the mainstream, VW has some catching up to do.
Tesla has been rolling out high-performance Superchargers for years and has a global network of about 30,000 fast-chargers that it says can give a 200 km (125 mile) boost in 15 minutes.
The company said in October that its own network has doubled in the past 18 months – and will triple over the next two years.
Volkswagen, meanwhile expects its network of fast-chargers to nearly quadruple to about 45,000 by 2025 – when it aims to overhaul Tesla as the global EV market leader – with 18,000 EV pumps in Europe, 17,000 in China and 10,000 in North America.
Volkswagen in March said it plans to spend 400 million euros on expanding its fast-charging network on the continent by then.
But that’s a drop in the ocean compared with the 5 billion euros the European Union reckons is needed every year until 2040 to expand charging infrastructure on the continent, and it is raising the pressure on utilities and governments to step up.
In Europe, the Volkswagen group is a shareholder in the EU’s fast-charging venture Ionity, along with rival carmakers BMW (BMWG.DE), Daimler’s (DAIGn.DE) Mercedes-Benz, Ford (F.N) and Hyundai (005380.KS).
It has also teamed up with energy firms such as Italy’s Enel (ENEI.MI), Britain’s BP (BP.L) and Spain’s Iberdrola (IBE.MC) to plug geographical gaps and form the blueprint for how funding for EV infrastructure can be split across industries.
“Various models are conceivable, from product partnerships and joint ventures to M&A,” said Temme.
CARS AND POWER
Tesla has already shown that when it comes to EVs, just selling cars no longer cuts it. It has adopted a model that offers customers everything from cars to battery storage to solar panels as well as electricity in some U.S. states.
Volkswagen is now selling power to retail clients that drive an EV or plug-in hybrids. One of its tariffs – which is available to customers who don’t own a VW – has attracted more than 10,000 clients since its launch in July, Temme said.
She said VW was planning to make its fast-chargers available for all EV drivers, unlike Tesla which has so far kept its supercharging network just for Tesla drivers – with the exception of a pilot programme in the Netherlands. read more
“We are pursuing a different approach than Tesla when it comes to charging infrastructure roll-out,” said Temme.
“We want an open, non-discriminatory charging network and will develop our services to make our offer more comfortable, simpler, more attractive.”
Volkswagen says its open-for-all approach means buyers of its EVs can charge at more than 250,000 existing public charging points across Europe – from various providers with various charging speeds.
The problem is that charging protocols and payment methods can vary across vendors, potentially turning the act of refueling an EV into a time-consuming and messy undertaking.
From the first quarter of 2022, Volkswagen plans to offer “Plug & Charge” technology in Europe to make the process smoother.
The car will store the owner’s payment details and make a contactless payment when the charging plug is attached to the EV at refuelling stations set up for the service.
While these are new challenges for established carmakers, Temme, who witnessed first-hand the abrupt shift of Germany’s utilities away from nuclear power in the wake of the Fukushima disaster, believes they can be mastered.
“Utilities must reinvent themselves and transition from nuclear and coal to renewables. In the automotive industry, including at Volkswagen, the question is currently how to consistently shift the focus from conventional vehicles to sustainable mobility,” she said.
“These challenges are of similar magnitude.”
($1 = 0.8738 euros)
Reporting by Christoph Steitz, Vera Eckert and Tom Kaeckenhoff; Editing by David Clarke
Our Standards: The Thomson Reuters Trust Principles.
Car cannibalism: What it is and 3 tips to avoid it
Mark Barclay, My Motor World
Car cannibalism has been on the rise now for several years — but what exactly is it, and what are the risks? More importantly, how can you ensure that your vehicles are protected? The good news is that there are ways to protect your car from thieves, and here My Motor World share a few of the best.
What is car cannibalism?
Car cannibalism refers to the crime of stripping a car for its parts without stealing the whole vehicle (though it may also be stolen in some cases). A lot of the time, the parts that are stolen are those most commonly needed to repair a car after a minor crash, such as bumpers, grills, lights, and fenders, or any other high-demand parts that thieves can sell to make a profit. Other times, thieves may steal to order, meaning they target vehicles with specific desirable parts or expensive add-ons with resale value. Because of this, every kind of car from pricey vehicles to those popular with young drivers are at risk.
How to avoid car cannibalism
The best way to protect your car from thieves is to keep it out of sight. But even if you have been targeted, there are still ways you can deter a theft in progress or potentially recover your stolen parts afterwards.
Park in a safe area
Always park your car in a safe area, even when parking for short durations. For long stays, private car parks and garages are the safest as they are usually locked and have CCTV or other security measures in place. However, if you don’t have access to one of these, then a well-lit area with lots of footfall may be enough of a deterrent. Since many of the parts being stolen are from the front of the vehicle, it could be useful to park facing a wall where possible to make the theft more difficult. Always ensure that your vehicle is locked and take your keys with you — not only is this safer, but many car insurance premiums won’t pay out if you haven’t properly secured your car.
Mark your parts
It’s unlikely you’ll ever recover your parts if they are stolen but marking them can make it easier for the police to identify, which means you potentially could get your stolen parts back. In some cases, marked parts can be a deterrent if the thief notices the marking, as they’ll be more reluctant to steal a part that can be traced. People buying the parts may also realise they have been stolen if they’re marked, and if so, they may be more likely to contact the police.
It’s worth putting a camera in your vehicle such as a dashcam if you haven’t already, and a tracker can help you locate your car in the event that it is stolen. If you park in a driveway or just outside your home, a video camera on your property may catch the thieves in the act and prove useful to the police investigation. A security light that goes on when it senses movement can even be enough of a deterrent, and both of these options may be cheaper than replacing the stolen parts.
Is misinformation putting the brakes on the used EV market?
Jordan Brompton, co-founder and CMO of myenergi, explores the latest second-hand EV sales data and discusses whether dated views and misconceptions are holding back the transition to electrification.
According to insight from the Society of Motor Manufacturers and Traders (SMMT), more than 30,500 second-hand battery electric vehicles (BEVs) changed hands in the second quarter of 2023, an 81.8% rise on the same period last year. Used plug-in hybrids (PHEVs) also grew in popularity, with sales up 11%.
In terms of availability, a quick search on Autotrader brings up more than 16,500 results for used BEVs and nearly 11,000 results for used PHEVs, spanning 47 manufacturers and hundreds of models – from hatchbacks and hybrids to coupes and convertibles. The choice is truly vast, and availability is immediate.
While you can’t miss the mix of top-end nearly new models pushing upwards of £100k, there’s also a huge choice of cars for far less than £17,920 – the average UK spend on a second-hand vehicle. You might have to compromise a little when it comes to colour, features or mileage, but the listings are packed with brilliant buys!
The used EV market should be thriving – and such impressive growth figures suggest that progress is building fast. However, when you dig beneath the surface, the reality is a little different. Indeed, as a percentage of total used car sales, plug-in vehicles comprise less than 2% of transactions. There seems a dichotomy between the growing opportunity and lacking consumer confidence.
But why? Well, even though the choice is there, many motorists are still put off by misinformation. From battery systems failing and range figures plummeting, to planned obsolescence after an initial three-year finance deal is up, we’ve all heard the rumours.
But what’s the truth? How long can you really keep an EV? When will you need a new battery? Does the range start to drop quickly after purchase? What’s more, with energy market volatility seeing electricity prices rocket, do the risks really outweigh the benefits of EV over ICE?
Are used EVs a ticking time bomb?
In short, no. While perceived battery life is still a concern for some motorists, experts suggest that the average electric vehicle battery (EVB) can last almost 20 years, or 200,000 miles – a significantly longer lifespan than the typical internal combustion engine and far longer than today’s average length of vehicle ownership. What’s more, while battery efficiency will eventually start to drop, the average EV will lose just 2% of accessible range per year – an arguably minor decline.
It might sound obvious, but the latest models have been designed to far outperform their petrol and diesel predecessors. Significant investment has been made by manufacturers into designing ever-more capable vehicles to suit the needs of tomorrow’s drivers and it really shows. The EVs of today, which include those on our list, have excellent ranges, impressive durability and are cheap to maintain thanks to fewer moving parts.
The anti-EV movement will tell you otherwise, but electric vehicles aren’t designed to fall apart after a few years. They’re not programmed to break, to slow down, to lose efficiency or to rack up costly servicing bills. Vehicle manufacturers are pioneering the future with cars that really are here to stay.
So, while scaremongering is commonplace, switching to electric really is the sensible option for motorists. Need a nippy run-around for your trips into town? There’s countless hatchbacks that’ll suit you down to the ground. Need something a little bigger for motorway journeys? You can pick up an SUV, saloon or estate that’ll keep on going for another decade.
But what about the elephant in the room? The volatile energy market and high electricity bills. Will your used EV quickly become a drain on your finances? Will the price cap rise far above falling petrol prices, leaving me between a rock and a hard place? All important questions but, again, motorists shouldn’t be concerned.
While the environmental benefits of EVs are widely publicised, the financial benefits are equally as impressive. At current prices, a small hatchback would cost less than £650 per annum for the average driver to run if they charge at home. Even though these prices will increase when the energy price cap changes, EVs will still be the most cost-efficient option by far – especially with fuel prices pushing £1.50 per litre (for diesel) and an average tank (55 litres) costing upwards of £80.
The real cheat is if you have a solar array and an eco-smart home EV charger, like the myenergi zappi. In this instance, you can effectively charge for free by self-consuming your self-generated renewable energy – zero fossil fuels, zero reliance on the grid, zero emissions travel. Of course, it requires an up-front investment, but the ability to take total control of your home energy use is an attractive one.
So, should you look to the used market for your next EV? Well absolutely – there really is something for everyone. What’s more, with a huge selection and less than average demand, you’ll likely grab a steal!
As we move ever-closer towards 2030, however, the used EV market must become a key part of the UK’s transition to electrification. The laggards and self-professed petrolheads will continue to spread misinformation, but the reality is really quite different from the current driver perception. Let’s not allow rumours to slow the transition to electrification.
Tapping into the connected car ecosystem could unlock new opportunities for payment providers
Car manufacturers continue to develop connected consumer experiences, opening up precious new revenue streams and opportunities to improve the customer experience of their marques and foster deeper brand loyalty. Olivier Bessi, Head of Fintech solutions at Star, looks at the opportunities for fintechs in the connected car ecosystem.
The value of in-car payments could reach $86 billion by 2025, up from $543 million in 2020, according to Juniper Research. Car makers are keen to seize the opportunity to drive revenue growth and foster long-term business sustainability, thus becoming active players in the digital economy. How can payment specialists get involved despite not being experts in the automotive space?
Providing drivers with the ability to make payments – for anything from parking, tolls, fuel and food on the go to roadside assistance – directly from the vehicle dashboard, provides a speed and convenience turbo boost that could significantly increase brand loyalty for car manufacturers.
Further opportunities to customers are also available. For example, if a customer has a flat tire and needs roadside assistance but can’t afford to pay for one upfront, providing buy now, pay later (BNPL) solutions as a roadside payments solution could boost subscription-related services and further foster customer loyalty. This innovative approach not only offers immediate financial relief to customers in unexpected situations but also presents an additional untapped revenue stream for car manufacturers, diversifying their service offerings.
Navigating go to market complexity
With no heritage of payment solutions, the payment ecosystem is a complex one to navigate for car manufacturers.
Finding the right financial ecosystem partners will be critical for them as they develop hybrid or capsule solutions for car users; pinpointing use cases that truly enhance the customer experience – beyond the obvious, like paying for tolls and gas.
For example, paying for quick service food, groceries and scheduling and paying car maintenance are all potential applications. Data and AI technology baked into in-car systems could suggest relevant goods and services, anticipate drivers’ needs, and shed light on desires they didn’t even know they had, providing a true open road experience.
Manufacturers may want to build their own in-car systems to empower dealerships and more directly manage the impact the experience has on customer loyalty but building an operating system from scratch, the approach being adopted by Mercedes for example, is an enormous investment.
There is a huge opportunity for fintechs to work together to help manufacturers overcome the multiple hurdles such as compliance with payment regulations and the security of sensitive customer information.
Fintech’s innate understanding of consumers’ payment needs will help manufacturers shape their offerings accordingly and create sensible subscription models that lead them to their endgame.
Where are the opportunities?
Payment providers and fintechs can help car manufacturers with several nuanced, technical aspects beyond building or outsourcing. Keeping the customer as the focal point and devising a holistic approach to payments that enables access to a strong network of partners is crucial.
When it comes to the secure and seamless protection, storage and analysis of customer transaction data for example, they can short circuit the journey to full connectivity and overcome technical and regulatory hurdles such as data encryption and privacy laws, breach prevention measures, adherence to industry-specific regulations like the Payment Card Industry Data Security Standard (PCI DSS), or access to major card schemes as a principal member.
The future customer journey is the endgame to keep in mind for car manufacturers and fintechs alike. Partnering will get you there quicker and deliver a consistent digital payment experience across brands and vehicles, increasing adoption, decreasing confusion and making it easier to onboard new merchants as the retail ecosystem expands.