The manufacturer of Europe's cheapest electric car is harnessing 5G to create an efficient EV production line and it looks promising for New Zealand.
Previously, the Leafs were almost exclusively second-hand imports from Japan, selling for $12,000 - $35,000 based on their age, condition and the ‘state of health’ of their lithium-ion battery, the single most expensive component of the vehicle.
Enthusiasm for the new 40kWh (kilowatt-hour) Leaf’s debut here was tempered only by its eye-watering price tag – $60,000. That makes it more expensive than the $47,000 Hyundai Ioniq but cheaper than the $70,000 Kia Niro SUV.
Even with the Government’s plan to introduce subsidies on low-emissions vehicles in 2021, which could see buyers of new models of the cars mentioned above eligible for an $8,000 rebate, the current crop of electric vehicles remains outside the budget of most New Zealand families.
Electric cars are cheaper to own than petrol or diesel cars over the long run, but the higher upfront cost is still hugely off-putting. Estimates for when average prices of electric cars drop below combustion engine cars range from 2022 to 2030. The availability of subsidies and the rate at which battery prices drop are the two critical factors.
While Tesla is credited with opening up the market for electric cars internationally, the traditional car giants have been slow to transition away from the combustion engine that has served them and us so well – if not the planet.
The electric challengers
Now, a handful of fledgeling electric car makers from Germany to China are trying to produce vehicles at a price that could finally spur the move away from petrol and diesel we need to significantly reduce carbon emissions from transport.
In the German industrial city of Aachen, near the Dutch and Belgian borders, one such company, e.Go Mobile AG, has recently started producing its e.Go Life compact plug-in electric cars, which sell from 15,900 - 19,900 euros in Germany depending on battery size. The e.Go Life is also eligible for a German government subsidy of up 4,000 euros, bringing the cost of its cheapest version down to less than 12,000 euros ($21,000).
Currently only one type of car is sold by the company, though it also has plans for an electric shuttle bus. The e.Go Life car won’t appeal to those emotionally tied to their roomy sedan or SUV. Format-wise, it’s the type of pint-sized car Daimler made popular with its petrol-power Smart car over twenty years ago. You can squeeze four people into the two-door e.Go Life but at just 3.35 metres in length, it doesn’t leave much leg room.
With a range of 100 to 145 kilometres depending on the battery size, it is however ideal for the work commute and short hops around town, which in European cities could see it hit a sweet spot for car owners.
What is remarkable about the e.Go is the philosophy behind its development. The car’s design is unashamedly dictated by the production techniques and materials that allow it to be produced cheaply.
Off the shelf parts
The e.Go’s chassis is made from a modular aluminium frame and its body panels from a type of flexible thermoplastic that is moulded in one of five colours so that they don’t have to be painted. It means that the e.Go production line, which NOTED visited this week, doesn’t require a steel press or a paint shop, expensive features of conventional auto plants that would add at least 100 million euros to capital costs. Instead, around 35 million has been invested in the 16,000 square metre plant, which at full capacity could produce 20,000 cars a year.
Rather than develop its own parts, e.Go buys off the shelf components where possible. German engineering firm Bosch supplies the electric drivetrain, the headlamps are standard-issue from Hella, a major auto parts maker which like e.Go is based in the North Rhine-Westphalia region.
The brainchild of engineer Professor Günther Schuh, e.Go emerged as a spin-off company from RWTH Aachen University. Schuh was responsible for StreetScooter, a previous company that made prototypes of compact electric cars. It was bought in 2014 by Deutsche Post, which developed the cars as electric mail delivery vehicles. Schuh used the sale proceeds and raised additional investment funds to start e.Go, convinced that the major barrier to electric car take-up was their high price.
The e.Go production line isn’t what you’d expect of an automotive plant. It is high-tech, clean and quiet. Indeed, an approach borrowed from software development underpins e.Go’s ‘Agile’ approach to development, where a minimum viable product has been produced and new iterations quickly created, complete with version names like 9.4.5, as though referring to an operating system update.
Rather than a slow-rolling supply line, the chassis of the e.Go Life car sits on an automated guided vehicle (AGV) which drives itself from one stage of production to the other independently. The Plant 1 factory is decked out with 36 mobile radio antennas installed by Ericsson and Vodafone.
Operating over a 5G mobile network, the transport vehicles, machines and tools on the production line all talk to each other over the network and each car part has an RFID tag attached to it to track its status.
The low latency of the wireless network means the AGVs are incredibly responsive to real-time information being fed to them. A new feature of 5G networks employing ‘edge’ computing, means that mini data centres on the e.Go factory site process the company’s data on the production line rather than it being sent over the internet, saving time and ensuring the company’s intellectual property stays secure.
The use of sensors, wireless connectivity and data-driven production make’s e.Go’s plant a leading example of so-called ‘Industry 4.0’ manufacturing, where physical and digital techniques merge to create more productive and innovative factory processes.
Functional but cheap
The streamlined process means that e.Go needs to employ very few specialists on the production line making it easier to recruit staff – around 500 workers are now employed at the plant.
Its attractive price point has seen around 3,300 pre-orders for the e.Go Life, which after a number of delays, began shipping to customers in May. There were dozens of blue and white e.Go cars sitting on the factory floor awaiting their batteries before being delivered to their new owners when I walked around the plant.
A deal with Bosch will see service station agents supply after-sales support for those e.Go Life owners and even there, efficiency is front of mind. Mechanics, who are likely to be unfamiliar with the e.Go Life until they appear in larger numbers around Germany, will be equipped with tablets with an augmented reality feature. Hold the tablet up over parts of the vehicle and instructions will appear on the screen relating to how to maintain and replace each vehicle component.
Ultimately, the car is fairly functional both inside and out with a high-quality if unglamorous build. It doesn’t feature fast charging, so a full battery charge will take 5 - 9 hours, depending on the battery size. But it can accelerate from 0 to 50 km/h in 3.4 seconds and has a maximum speed of 142 km/h, so has enough grunt to take off from the lights and handle quick trips on the motorway. The battery represents 30 - 40 per cent of the e.Go Life’s overall cost and has an expected lifespan of 8 - 10 years.
Most importantly, the e.Go Life is the cheapest electric car now on the market in Europe.
The petrol-powered Smart Forfour, the closest equivalent to it, costs 11,800 euros and most similar electric cars from the big European automakers are priced at over 20,000 euros.
The question now is whether e.Go can ramp up production and convince enough European drivers to go electric. A company representative told NOTED that China and Mexico were already being considered as locations for expanding production and e.Go was planning to license its technology, so a plant could conceivably set up in New Zealand churning out cheap electric cars for the local market.
That could ultimately accelerate EV uptake, which is growing quickly in New Zealand but off a very low base. The government has made little progress towards its original goal of making its 15,000-strong fleet of vehicles emissions-free by 2025. Only 78 of those vehicles are electric and the coalition government now wants all new cars bought after 2025 to be emissions-free.
If e.Go represents German ambition to challenge the status quo in auto manufacturing, numerous start-ups in China are doing the same. From BYD to Nio, a number of manufacturers are producing cars, inspired by Tesla and able to leverage China’s strong manufacturing base.
New Zealand is still far down the chain in priority when it comes to electric cars and we will continue to pay a premium for the majority of them. But with nimble new players chipping away at the market for cheap, small emissions-free cars, the prospect of a $20,000 electric car for urban drivers is starting to look more realistic.
Peter Griffin visited eGo’s Aachen car factory as a guest of Vodafone.