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Saxony reinventing itself as home of electro-mobility

On January 29, 1886, Karl Benz set the foundations for the automotive industry in Saxony – and the rest of the world – when he patented his “vehicle powered by gas engine”. Now, 130 years later, the state is reinventing the automobile.

Automotive Industries (AI) asked Winfried Kretschmann, President of Baden Württemburg, what the state is doing to help reinvent its auto industry.

Kretschmann: Our vision is to a leading global automobile and mobility center, acting as a pioneer of climate-friendly mobility and offering people future-oriented jobs. The production of conventional engines has enabled our companies to grow. Now the focus is on a parallel strategy through which we detach ourselves from the combustion engine and focus more on alternative propulsion systems. New competitors, such as Tesla, which only rely on one technology, have made it easier for themselves. This is why we have launched “Strategiedialog Automobilwirtschaft BW” (strategic dialog on the automotive industry in Baden-Wuerttemberg). With this initiative the state government wishes to promote the transformation process in the automobile industry to retain our economic prosperity.

AI: Which companies have made your region home and which ones are likely to invest in the near future?

Kretschmann: The automobile was invented 130 years ago in Baden-Wuerttemberg. Today we are home to many renowned automobile manufacturers – Audi in Neckarsulm, Daimler and Porsche in Stuttgart – and suppliers such as Bosch, ZF, Mahle, ElringKlinger among many other renowned companies – as well as our outstanding specialists and scientists. We want to secure this top spot and improve on it further. Our domestic companies are investing heavily in the electro-mobile future, such as Daimler with its EQ and Porsche with its Mission E. And of course, we are always happy when new competitors, such as TESLA, are interested in settling in Baden-Wuerttemberg.

AI: What are some of the investments made by the government in the infrastructure of Baden Wuerttemberg to help popularize hybrid and EVs?

Kretschmann: We have the Electro-mobility I – III state initiatives, which are valued at a total of €122 million. The goal is to make Baden-Wuerttemberg the center of development and production in Germany, as well as the leading market in e-mobility. Currently, we have a program to construct 2,000 charging stations with the aim of mitigating range anxiety. We want to make sure there is at least one charging station every 10 kilometers.

In addition, the MOM SME offensive should help our small and medium-sized companies apply their expertise in e-mobility and conquer new business areas. By promoting the development of large fleets with electric drives or car sharing organizations, we not only want to popularize electro-mobility in the region, but also reduce the pollutant emissions of these vehicles, which are constantly in use.

Furthermore, approximately €18 million has been invested in the digitization of mobility for traffic control and data transmission. We also have promotional programs for our universities and colleges, where a total of €30 million has been set aside for research and transfer funding over the past years. The state is also promoting a package of measures towards networked and autonomous driving in the Karlsruhe/Bruchsal/Heilbronn region.

Saxony as investment destination

AI asked Peter Nothnagel, CEO, Invest in Saxony, what makes the State an attractive destination for investments in hybrid, electric, connected and autonomous vehicles.

Nothnagel: Saxony’s competitive advantage is the fact that “Autoland Saxony” is also known as “Silicon Saxony”, Europe’s largest microelectronics / ICT cluster. The success of “Autoland Saxony” was also made possible by the regional research landscape. More than 50 very diverse university and non-university educational and research facilities focus on automobiles in Saxony. Furthermore, the Daimler group through its subsidiary Deutsche ACCUmotive, is continuing to expand its production capacities for lithium-ion batteries. Systems for the hybrid models and the fully electric vehicles of the automobile group are produced at the Saxonproduction site. For an investment of about €500 million, ACCUmotive is already building its second factory for lithium-ion batteries.

AI: What investment in new technology has been attracted?

Nothnagel: Saxony is in “pole position” for the second automobile revolution, which is electromobility. Major OEMs such as Volkswagen, Porsche and BMW continue to invest in their Saxon production sites. The production of the BMW i3 and i8, the Volkswagen I.D. (> 2019) and the Porsche Panamera Hybrid are all located in Saxony.

From 2020, the VW Group’s first newly designed electric vehicle (the I.D.) will be seen on the streets of the world. It will be manufactured completely in the Zwickau plant, in which VW is investing another €300 million.

In June 2017 Bosch announced the biggest investment in its history. It will be building a fabrication plant in Dresden to supply 12-inch wafers. Construction of the high-tech plant is to be completed by the end of 2019. Total investment in the location will come to roughly one billion euros.

In July 2017 BMW announced an investment of further €200 million in its Leipzig plant. The building work will begin in early 2018 and includes an extension of the paint shop and alternations in the bodyshop and assembly areas. The work is scheduled to finish in 2020, and will ensure Plant Leipzig is prepared for the production of future BMW model generations.

AI: How do the region’s education centers help the automotive manufacturers in pursuing new, environment friendly technologies?

Nothnagel: Three of the major Saxon universities (Technical University of Dresden, Technical University of Chemnitz, Freiberg University of Mining and Technology) and the Zwickau University of Applied Sciences, focus on automotive-related fields such as automotive technology, automotive electronics, traffic system engineering, automotive assembly, electromobility, automotive informatics and automotive engineering.

A subsidiary of Volkswagen Sachsen, the Volkswagen Bildungsinstitut educational institution – with locations in Zwickau and Chemnitz – has been providing vocational training, continued education, and human resource development services to the VW parent

company, other corporate units as well as to suppliers and other companies in Saxony since

  1. The competence center conducts initial professional education and vocational training, offers branch-specific continued education programs, and assists companies in human resource development. Together with the Zwickau University of Applied Sciences, it provides cooperative studies for prospective engineers. It permits its graduates to get their skilled worker certification parallel to a university degree.

AI: Has Saxony’s infrastructure been upgraded for hybrid and EVs?

Nothnagel: A Technical University of Dresden study identifying the future demand for charging stations serves as a basis for the development of the charging infrastructure. Concepts for charging infrastructure are being developed and tested in different rural and urban areas. By the way, the Saxony Economic Development Corporation provides four charging stations and has two electric cars within its fleet.

Opportunities for electro-mobility

AI asked Stefan Di Bitonto of Germany Trade & Invest to share electro-mobility investment opportunities in Germany.

Di Bitonto: Due to the shift towards electromobility, demand for Li-Ion batteries is increasing rapidly. This means there are great investment opportunities for companies producing Li-Ion cells in Europe’s automotive heartland – Germany. Along the value chain, products such as separator material as well as anode and cathode materials are also needed.

AI: How likely is it that Germany will meet the 1 million electric car target by 2020?

Di Bitonto: New e-vehicle car registrations are steadily increasing in Germany. However, the goal of 1 million vehicles has been revised. The projections are now between 500 000 and a million.

AI: Why the change?

Di Bitonto: More than one factor is to be taken in account: Firstly, the supporting infrastructure for electric vehicles is still strongly inferior to that for internal combustion engine-powered vehicles. Secondly, the price per megawatt for Li-Ion batteries is still quite high, which raises vehicles prices. Thirdly, there is still range anxiety. 

AI: What is being done to overcome these challenges?

Di Bitonto: Prices for e-vehicles will need to be reduced to make them more attractive for the customers, and the range of an electric vehicle needs to be significantly increased – even when driving less economically.


Automotive Industries asked Thomas Benz, Solution Director Automotive, PTV Planung Transport Verkehr, how the PTV Group and IPG Automotive are combining technologies to offer simulation in a virtual environment.

Benz: The co-simulation of IPG’s CarMaker and PTV’s Vissim allows for the first time the combination of a detailed vehicle dynamics simulation and a realistic traffic flow simulation. By the combination of the two tools, a vehicle with all its components like sensors, controllers and tires can be tested in a real-world environment provided by PTV Vissim. Instead of artificial scenarios with pre-defined movements of some surrounding vehicles, Vissim produces a life-like environment including cars, trucks, bicycles and pedestrians.

AI: How does it impact hybrid and electric vehicles?

Benz: The optimal operation of hybrid and electric vehicles depends much more on traffic conditions than conventional vehicles. Questions which need to be answered include such when to start the electric engine of and what is the realistic range of an electric vehicle at constant speed with realistically moving vehicles around it.

AI: What are the advantages of testing in a virtual environment?

Benz: Very simple. Ever tried a winter test in Nevada in August? Seriously, simulation in a virtual environment allows for any driving conditions at any time at any place – plus it is done way faster than real-time. Running many simulations in parallel allows for almost indefinite test miles overnight. This can never be achieved with expensive, hand-made prototypes. In fact simulation gives insights where real-world experiments provide the greatest benefit: carry out only those real-world tests that make the most sense.

Side bar

“At least one electrified alternative in every model series”

Since the beginning of 2017 Ola Källenius has been responsible for Group Research at Daimler AG and Mercedes-Benz Cars Development. Automotive Industries (AI) spoke to him about the company’s drive strategy.

AI: With the electrically driven studies Mercedes-Benz EQA and smart vision EQ, Mercedes-Benz Cars is sending clear signals on purely electric mobility. Is this the trend?

Källenius: Pure electric power is a crucial milestone on the road, but not the only one. Please let’s not forget our plug-in hybrids. Both the new S 560 e, the GLC F-CELL with a fuel cell drive system and the performance hybrid study Mercedes-AMG Project ONE use electricity from the power socket, but not exclusively. We call it EQ Power. In future we shall continue to extend our plug-in hybrid portfolio systematically. In addition, with the launch of the 48-volt on-board electrical system in combination with starter generators we are now launching electrical drive system components on a broad front, and in this way continually enhancing the efficiency of our combustion engines.

AI: So it is still the case that the drive system strategy is based on several platforms?

Källenius: Yes, on the road to emission-free driving we are continuing to pursue a three-lane drive system strategy: we are focusing on highly efficient high-tech combustion engines; systematic hybridization; and battery-electric or fuel cell drive.

AI: What does this mean for combustion engine technology?

Källenius: I’m sure that the combustion engines will still be around for a long time to come. In the year 2025 we are looking at a market share of up to 25% for the purely battery-electric cars. This means that at least 75% will still have a combustion engine on board – combined with electric, naturally.

AI: So the combustion engines also benefit from electrification?

Källenius: Precisely, our new S-Class is a case in point. Here we have just launched a six-cylinder in-line engine with an integrated starter generator. Through this we have made a huge leap where driveability, performance and consumption are concerned. Incidentally, we are the only car manufacturer currently offering this type of integrated starter generator with 48-volt technology as standard. We are gradually introducing the 48-volt technology to the entire portfolio – the next step will be in the four-cylinder with our E-Class later this year.

AI: Will diesel engines be discontinued?

Källenius: Definitely not. We still need the diesel and in future we shall continue to advance its further development. It has an advantage regarding CO2 emissions, and this source of power is still relevant in goods transport, as well as in numerous markets – above all, in Europe. With our newly developed premium diesel family we have proven that diesel can be clean.

AI: smart is planning to convert its model range entirely to electric drive by 2020 in Europe and the USA. When will the corresponding battery-electric models from Mercedes-Benz follow?

Källenius: With our new product and technology brand EQ we are not only starting a purely electric model initiative; we are also gradually establishing an electro-mobile ecosystem which includes the necessary charging infrastructure. We are investing more than €10 billion in the expansion of our EQ vehicle portfolio alone.

AI: When will the market see the first EQ model?

Källenius: The first half of 2019 will see the launch of the EQ SUV, which we will be calling the EQC. By 2022 we will have launched a more than 10 purely electrically driven vehicles. Over and above this we shall electrify the entire Mercedes-Benz portfolio and thus offer our customers at least one electrified alternative in every Mercedes-Benz model series, over 50 in all.

AI: On which platform will the EQ vehicles be based?

Källenius: Our modular system is the basis for our electrification strategy. This enables us to create a cross-model electric vehicle architecture for our EQ vehicle family, which is scalable and can be used flexibly. Incidentally, this does not just apply to the passenger car models. In the electrification of the Sprinter and Vito our colleagues from Mercedes-Benz Vans are also using the Mercedes-Benz Cars modular system.

AI: What about the batteries?

Källenius: Everything is pointing to growth here. Daimler is investing more than €1 billion in establishing a coordinated global battery production network. In total we are aiming for a production capacity of one million batteries per annum.

AI: And technology?

Källenius: Initially we will stay with the lithium-ion technology. In the coming years there will be further evolutionary increases in performance. But if a 10, 20 or even 30% increase in performance could be achieved, this would be quite something. Bigger leaps still are possible with the launch of post-lithium-ion technology, for example lithium-sulfur or solid-state batteries, but from today’s perspective not within the next five years.

AI: Where does the fuel cell fit in?

Källenius: The fuel cell is and remains an interesting technology on the road to zero emissions. The GLC F-CELL is an integral part of our electric initiative. With the world premiere of the pre-series vehicles we have just recently taken a major step. Market launch is planned for next year. The high range thanks to the combination of the fuel cell and battery, short charging times and the everyday suitability of an SUV will make it the ideal companion. A real Mercedes – purely electric!

AI: What about charging, without the appropriate infrastructure, electric mobility will hardly be able to achieve a breakthrough…

Källenius: We are thinking in terms of intelligently networked charging solutions right from the outset. We want to make our customer a holistic premium offer in the field of electric mobility. Whether that’s for charging at home, at work, or ultra-fast on the road. We are taking a close look at all scenarios and positioning ourselves on a broad basis with selected partnerships and co-operations. We are working together with BMW, Ford and the Volkswagen Group in a joint venture on setting up the most powerful charging network at major European transport axes.


Investment incentives

Saxony offers a wide range of funding instruments for investment projects. These include primarily direct subsidies and subordinated loans. In addition, it is possible to combine the investment support with labor market and technology funding instruments.

If new employees are to be optimally qualified or long-term employees of a company are to be prepared for new tasks and duties, then the Federal State of Saxony and the Federal Employment Agency (BA) provide diverse funding options – for example, when it comes to the employment of unemployed persons or the recruitment of R&D staff.

To support technology development Saxony provides R&D project funding, technology transfer funding, a “InnoPramie” innovation grant, as well as the support of “Innovation and Transfer Assistants,” “InnoManagers,” “InnoExperts,” and “InnoTeams.

The market is being stimulated through a federal exemption of electric vehicles from road taxes for the first 10 years. A purchase bonus for electric vehicles was introduced in 2016. Purchases receive a rebate of €4,000 for a purely battery-driven electric vehicle or a fuel-cell vehicle – half of which is financed by the federal government and the other half by the manufacturer. A €3,000 rebate is offered for an externally rechargeable hybrid-electric vehicle.

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Thu. March 23rd, 2023

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