Tag: Batteries

Posted on by

The Age of Electric Cars Is Dawning Ahead of Schedule

FRANKFURT — An electric Volkswagen ID.3 for the same price as a Golf. A Tesla Model 3 that costs as much as a BMW 3 Series. A Renault Zoe electric subcompact whose monthly lease payment might equal a nice dinner for two in Paris.

As car sales collapsed in Europe because of the pandemic, one category grew rapidly: electric vehicles. One reason is that purchase prices in Europe are coming tantalizingly close to the prices for cars with gasoline or diesel engines.

At the moment this near parity is possible only with government subsidies that, depending on the country, can cut more than $10,000 from the final price. Carmakers are offering deals on electric cars to meet stricter European Union regulations on carbon dioxide emissions. In Germany, an electric Renault Zoe can be leased for 139 euros a month, or $164.

Electric vehicles are not yet as popular in the United States, largely because government incentives are less generous. Battery-powered cars account for about 2 percent of new car sales in America, while in Europe the market share is approaching 5 percent. Including hybrids, the share rises to nearly 9 percent in Europe, according to Matthias Schmidt, an independent analyst in Berlin.

As electric cars become more mainstream, the automobile industry is rapidly approaching the tipping point when, even without subsidies, it will be as cheap, and maybe cheaper, to own a plug-in vehicle than one that burns fossil fuels. The carmaker that reaches price parity first may be positioned to dominate the segment.

Image
Credit…Philip Cheung for The New York Times

A few years ago, industry experts expected 2025 would be the turning point. But technology is advancing faster than expected, and could be poised for a quantum leap. Elon Musk is expected to announce a breakthrough at Tesla’s “Battery Day” event on Tuesday that would allow electric cars to travel significantly farther without adding weight.

The balance of power in the auto industry may depend on which carmaker, electronics company or start-up succeeds in squeezing the most power per pound into a battery, what’s known as energy density. A battery with high energy density is inherently cheaper because it requires fewer raw materials and less weight to deliver the same range.

“We’re seeing energy density increase faster than ever before,” said Milan Thakore, a senior research analyst at Wood Mackenzie, an energy consultant which recently pushed its prediction of the tipping point ahead by a year, to 2024.

Some industry experts are even more bullish. Hui Zhang, managing director in Germany of NIO, a Chinese electric carmaker with global ambitions, said he thought parity could be achieved in 2023.

Venkat Viswanathan, an associate professor at Carnegie Mellon University who closely follows the industry, is more cautious. But he said: “We are already on a very accelerated timeline. If you asked anyone in 2010 whether we would have price parity by 2025, they would have said that was impossible.”

This transition will probably arrive at different times for different segments of the market. High-end electric vehicles are pretty close to parity already. The Tesla Model 3 and the gas-powered BMW 3 Series both sell for about $41,000 in the United States.

A Tesla may even be cheaper to own than a BMW because it never needs oil changes or new spark plugs and electricity is cheaper, per mile, than gasoline. Which car a customer chooses is more a matter of preference, particularly whether an owner is willing to trade the convenience of gas stations for charging points that take more time. (On the other hand, owners can also charge their Teslas at home.)

Consumers tend to focus on sticker prices, and it will take longer before unsubsidized electric cars cost as little to drive off a dealer’s lot as an economy car.

Image

Credit…Samuel Zeller for The New York Times

The holy grail in the electric vehicle industry has been to push the cost of battery packs — the rechargeable system that stores energy — below $100 per kilowatt-hour, the standard measure of battery power. That is the point, more or less, at which propelling a vehicle with electricity will be as cheap as it is with gasoline.

Current battery packs cost around $150 to $200 per kilowatt-hour, depending on the technology. That means a battery pack costs around $20,000. But the price has dropped 80 percent since 2008, according to the United States Department of Energy.

All electric cars use lithium-ion batteries, but there are many variations on that basic chemistry, and intense competition to find the combination of materials that stores the most power for the least weight.

For traditional car companies, this is all very scary. Internal combustion engines have not changed fundamentally for decades, but battery technology is still wide open. There are even geopolitical implications. China is pouring resources into battery research, seeing the shift to electric power as a chance for companies like NIO to break into the European and someday, American, markets. In less than a decade, the Chinese battery maker CATL has become one of the world’s biggest manufacturers.

Image

Credit…Felix Schmitt for The New York Times

The California company has been selling electric cars since 2008 and can draw on years of data to calculate how far it can safely push a battery’s performance without causing overheating or excessive wear. That knowledge allows Tesla to offer better range than competitors who have to be more careful. Tesla’s four models are the only widely available electric cars that can go more than 300 miles on a charge, according to Kelley Blue Book.

On Tuesday, Mr. Musk could unveil a technology offering 50 percent more storage per pound at lower cost, according to analysts at the Swiss bank UBS. If so, competitors could recede even further in the rearview mirror.

“The traditional car industry is still behind,” said Peter Carlsson, who ran Tesla’s supplier network in the company’s early days and is now chief executive of Northvolt, a new Swedish company that has contracts to manufacture batteries for Volkswagen and BMW.

“But,” Mr. Carlsson said, “there is a massive amount of resources going into the race to beat Tesla. A number, not all, of the big carmakers are going to catch up.”

Image

Credit…Felix Odell for The New York Times

The traditional carmakers’ best hope to avoid oblivion will be to exploit their expertise in supply chains and mass production to churn out economical electrical cars by the millions.

A key test of the traditional automakers’ ability to survive will be Volkswagen’s new battery-powered ID.3, which will start at under €30,000, or $35,000, after subsidies and is arriving at European dealerships now. By using its global manufacturing and sales network, Volkswagen hopes to sell electric vehicles by the millions within a few years. It plans to begin selling the ID.4, an electric sport utility vehicle, in the United States next year. (ID stands for “intelligent design.”)

But there is a steep learning curve.

“We have been mass-producing internal combustion vehicles since Henry Ford. We don’t have that for battery vehicles. It’s a very new technology,” said Jürgen Fleischer, a professor at the Karlsruhe Institute of Technology in southwestern Germany whose research focuses on battery manufacturing. “The question will be how fast can we can get through this learning curve?”

Peter Rawlinson, who led design of the Tesla Model S and is now chief executive of the electric car start-up Lucid, likes to wow audiences by showing up at events dragging a rolling carry-on bag containing the company’s supercompact drive unit. Electric motor, transmission and differential in one, the unit saves space and, along with hundreds of other weight-saving tweaks, will allow the company’s Lucid Air luxury car — which the company unveiled on Sept. 9 — to travel more than 400 miles on a charge, Mr. Rawlinson said.

His point is that designers should focus on things like aerodynamic drag and weight to avoid the need for big, expensive batteries in the first place. “There is kind of a myopia,” Mr. Rawlinson said. “Everyone is talking about batteries. It’s the whole system.”

Image

Credit…Felix Schmitt for The New York Times

When Jana Höffner bought an electric Renault Zoe in 2013, driving anywhere outside her home in Stuttgart was an adventure. Charging stations were rare, and didn’t always work. Ms. Höffner drove her Zoe to places like Norway or Sicily just to see if she could make it without having to call for a tow.

Ms. Höffner, who works in online communication for the state of Baden-Württemberg, has since traded up to a Tesla Model 3 equipped with software that guides her to the company’s own network of chargers, which can fill the battery to 80 percent capacity in about half an hour. She sounds almost nostalgic when she remembers how hard it was to recharge back in the electric-vehicle stone age.

“Now, it’s boring,” Ms. Höffner said. “You say where you want to go and the car takes care of the rest.”

The European Union has nearly 200,000 chargers, far short of the three million that will be needed when electric cars become ubiquitous, according to Transport & Environment, an advocacy group. The United States remains far behind, with less than half as many as Europe.

But the European network is already dense enough that owning and charging an electric car is “no problem,” said Ms. Höffner, who can’t charge at home and depends on public infrastructure.

Price and infrastructure are closely connected. At least in theory, people won’t need big, expensive batteries if there is a place nearby to quickly recharge. (Charging times are also dropping fast.)

Lucid’s first vehicle is a luxury car, but Mr. Rawlinson said his dream was to build an electric car attainable by the middle class. In his view, that would mean a lightweight vehicle capable of traveling 150 miles between charges.

“I want to make a $25,000 car,” Mr. Rawlinson said. “That’s what is going to change the world.”

Posted on by

Its Electric Grid Under Strain, California Turns to Batteries

Last month as a heat wave slammed California, state regulators sent an email to a group of energy executives pleading for help. “Please consider this an urgent inquiry on behalf of the state,” the message said.

The manager of the state’s grid was struggling to increase the supply of electricity because power plants had unexpectedly shut down and demand was surging. The imbalance was forcing officials to order rolling blackouts across the state for the first time in nearly two decades.

What was unusual about the emails was who they were sent to: people who managed thousands of batteries installed at utilities, businesses, government facilities and even homes. California officials were seeking the energy stored in those machines to help bail out a poorly managed grid and reduce the need for blackouts.

Many energy experts have predicted that batteries could turn homes and businesses into mini-power plants that are able to play a critical role in the electricity system. They could soak up excess power from solar panels and wind turbines and provide electricity in the evenings when the sun went down or after wildfires and hurricanes, which have grown more devastating because of climate change. Over the next decade, the argument went, large rows of batteries owned by utilities could start replacing power plants fueled by natural gas.

But that day appears to be closer at hand than earlier thought, at least in California, which leads the country in energy storage. During the state’s recent electricity crisis, more than 30,000 batteries supplied as much power as a midsize natural gas plant. And experts say the machines, which range in size from large wall-mounted televisions to as big as shipping containers, will become even more important because utilities, businesses and homeowners are investing billions of dollars in such devices.

Image
Credit…Philip Cheung for The New York Times

“People are starting to realize energy storage isn’t just a project or two here or there, it’s a whole new approach to managing power,” said John Zahurancik, chief operating officer at Fluence, which makes large energy storage systems bought by utilities and large businesses. That’s a big difference from a few years ago, he said, when electricity storage was seen as a holy grail — “perfect, but unattainable.”

On Friday, Aug. 14, the first day California ordered rolling blackouts, Stem, an energy company based in the San Francisco Bay Area, delivered 50 megawatts — enough to power 20,000 homes — from batteries it had installed at businesses, local governments and other customers. Some of those devices were at the Orange County Sanitation District, which installed the batteries to reduce emissions by making it less reliant on natural gas when energy use peaks.

John Carrington, Stem’s chief executive, said his company would have provided even more electricity to the grid had it not been for state regulations that, among other things, prevent businesses from selling power from their batteries directly to other companies.

“We could have done two or three times more,” he said.

The California Independent System Operator, which manages about 80 percent of the state’s grid, has blamed the rolling blackouts on a confluence of unfortunate events: a gas plant abruptly went offline, a lack of wind stilled thousands of turbines and power plants in other states couldn’t export enough electricity. (On Thursday, the grid manager urged Californians to reduce electricity use over Labor Day weekend because temperatures are expected to be 10 to 20 degrees above normal.)

But in recent weeks it has become clear that California’s grid managers also made mistakes last month that were reminiscent of an energy crisis in 2000 and 2001 when millions of homes went dark and wholesale electricity prices soared.

Grid managers did not contact Gov. Gavin Newsom’s office until moments before it ordered a blackout on Aug. 14. Had it acted sooner, the governor could have called on homeowners and businesses to reduce electricity use, something he did two days later. He could have also called on the state Department of Water Resources to provide electricity from its hydroelectric plants.

Image

Credit…Philip Cheung for The New York Times

Weather forecasters had warned about the heat wave for days. The agency could have developed a plan to harness the electricity in numerous batteries across the state that largely sat idle while grid managers and large utilities such as Pacific Gas & Electric scrounged around for more electricity.

That search culminated in frantic last-minute pleas from the California Public Utilities Commission to the California Solar and Storage Association. The commission asked the group to get its members to discharge batteries they managed for customers like the sanitation department into the grid. (Businesses and homeowners typically buy batteries with solar panels from companies like Stem or Sunrun, which manage the systems for their customers.)

“They were texting and emailing and calling us: ‘We need all of your battery customers giving us power,’” said Bernadette Del Chiaro, executive director of the solar and storage association. “It was in a very last-minute, herky-jerky way.”

At the time of blackouts on Aug. 14, battery power to the electric grid climbed to a peak of about 147 megawatts, according to data from California I.S.O. After officials asked for more power the next day, that supply shot up to as much as 310 megawatts.

Had grid managers and regulators done a better job coordinating with battery managers, the devices could have supplied as much as 530 megawatts, Ms. Del Chiaro said. That supply would have exceeded the amount of electricity the grid lost when the natural gas plant, which grid managers have refused to identify, went offline.

Officials at California I.S.O. and the public utilities commission said they were working to determine the “root causes” of the crisis after the governor requested an investigation.

Grid managers and state officials have previously endorsed the use of batteries. The utilities commission last week approved a proposal by Southern California Edison, which serves five million customers, to add 770 megawatts of energy storage in the second half of 2021, more than doubling its battery capacity.

And Mr. Zahurancik’s company, Fluence, is building a 400 megawatt-hour battery system at the site of an older natural gas power plant at the Alamitos Energy Center in Long Beach. Regulators this week also approved a plan to extend the life of the power plant, which was scheduled to close at the end of the year, to support the grid.

But regulations have been slow to catch up with the rapidly developing battery technology.

Regulators and utilities have not answered many of the legal and logistical questions that have limited how batteries owned by homeowners and businesses are used. How should battery owners be compensated for the electricity they provide to the grid? Can grid managers or utilities force batteries to discharge even if a homeowner or business wants to keep it charged up for their own use during blackouts?

During the recent blackouts, Ms. Del Chiaro said, commercial and industrial battery owners like Stem’s customers were compensated at the rates similar to those that are paid to businesses to not use power during periods of high electricity demand. But residential customers were not paid and acted “altruistically,” she said.

Image

Credit…Philip Cheung for The New York Times

Of course, many energy companies and some conservative lawmakers are skeptical about batteries. They argue that it would be far better to build and maintain natural gas power plants because utilities have decades of experience with them and gas is abundant and relatively cheap. Batteries, they argue, are expensive and can only provide electricity for short stretches — typically four or five hours.

Dominion Energy, one of the nation’s largest utilities, for example, is investing in batteries but has also argued that natural gas power plants are critical to ensuring a reliable grid. “Our view is that it cannot be an either-or decision,” Katharine Bond, a Dominion vice president, said in a recent interview.

But both proponents and critics of batteries agree that such devices, along with renewable energy, pose a fundamental challenge to an electricity system that has long worked in a top-down way. Historically, utilities built power plants and strung lines to deliver electricity to homes and businesses. That model was stable for decades and it earned utilities a guaranteed rate of return on their investments, typically 10.5 percent.

But homes and businesses are increasingly not just users of electricity. As the cost of solar panels and batteries has plunged in recent years, people can generate their own power and become suppliers, too.

Sunrun, the nation’s largest residential solar company, said about 20 percent of the solar power systems it installs include batteries, up from 10 percent just a year ago. In the Bay Area, 60 percent of installations include batteries.

Lynn Jurich, Sunrun’s chief executive, asserts that the batteries her company installs — it has about 5,000 across California — should be treated like a virtual power plant that can be turned on and off much faster than a plant fueled by fossil fuels. And Sunrun’s virtual power plant can just as easily absorb power when there is too much supply.

“People don’t appreciate the ability of the distributive batteries to respond,” Ms. Jurich said. “Not only can it be done cheaper but they can be turned on instantaneously.”

Posted on by

The Next Energy Battle: Renewables vs. Natural Gas

Dominion Energy, one of the nation’s largest utilities, in late June erected wind turbines off the Virginia coast — only the second such installation in the United States — as part of a big bet on renewable energy.

The company is also planning to build new power plants that burn natural gas.

Utilities around the country are promoting their growing use of renewable energy like hydroelectric dams, wind turbines and solar panels, which collectively provided more power than coal-fired power plants for the first time last year. But even as they add more green sources of power, the industry remains deeply dependent on natural gas, a fossil fuel that emits greenhouse gases and is likely to remain a cornerstone of the electric grid for years or even decades.

Utilities maintain that they need to keep using natural gas because the wind and the sun are too unreliable. They are also reluctant to invest in energy storage, arguing that it would cost too much to buy batteries that can power the grid when there isn’t enough sunlight or wind.

“We’ve got to have a resource that has an ‘on’ and ‘off’ switch,” said Katharine Bond, vice president for public policy and state affairs at Dominion.

For years, environmental activists and liberal policymakers fought to force utilities to reduce coal use to curb emissions and climate change. As the use of coal fades, the battle lines are rapidly shifting, with the proponents of a carbon-free grid facing off against those who champion natural gas, an abundant fuel that produces about half the greenhouse gas emissions that burning coal does.

Coal plants supply less than 20 percent of the country’s electricity, down from about half a decade ago. Over that same time, the share from natural gas has doubled to about 40 percent. Renewable energy has also more than doubled to about 20 percent, and nuclear plants have been relatively steady at around 20 percent.

Image
Credit…Ting Shen for The New York Times

Experts argue that the surge in wind and solar energy, while impressive, is not reducing emissions quickly enough to avert the worst effects of climate change, including more intense heat waves and storms. They argue that utilities urgently need to reduce the use of natural gas, too.

“Replacing coal with gas doesn’t solve our public health problem,” said Mary Anne Hitt, national director of campaigns at the Sierra Club.

Proponents of renewable energy note that solar panels are increasingly the cheapest source of electricity. Solar panels can deliver power to 650 homes for one hour — one megawatt-hour in industry jargon — at $31 to $111 a megawatt-hour, according to Lazard, the investment firm. By comparison, natural gas peaking plants, which utilities can turn on and off quickly to meet surging demand, deliver power at $122 to $162 a megawatt-hour.

A report in June by the University of California, Berkeley, concluded that by 2035, the U.S. electric grid could get 90 percent of its power without greenhouse gas emissions while lowering electricity rates. To do that, the country would have to increase its use of renewables, energy storage and transmission lines while closing all coal plants and slashing natural gas use by 70 percent.

Some lawmakers argue that utilities are wasting billions of dollars by investing in natural gas plants that will have to be shut down before their useful lives end.

“The urgent need to address the climate crisis means we can’t make reckless investments now that will have to be paid off for decades,” said Senator Edward J. Markey, a Massachusetts Democrat and one of the authors of the legislation known as the Green New Deal. “We have to consider clean options, which, fortunately for consumers, are also cost-effective.”

Some experts say they hope that the country can move away from fossil fuels in part because the use of renewables has grown even as the Trump administration has repealed environmental regulations and pulled the United States out of the Paris climate agreement.

“Fighting the transition is not going to stop the transition,” Dennis Wamsted, an analyst for the Institute for Energy Economics and Financial Analysis, said. “Economically, it will happen inevitably.”

Utility executives acknowledge that renewable energy will continue to grow. But many dismiss the idea that wind turbines, solar panels and batteries can replace natural gas plants.

Great River Energy, a Minnesota utility owned by its customers, recently gained national attention when it said it would phase out coal use. The cooperative plans to shut down a 40-year-old plant in Underwood, N.D., called Coal Creek after failing to sell it.

“The situation that led to our decision was based purely on the economics,” said David Saggau, president and chief executive of Great River Energy. “It has been tougher and tougher for some of our legacy facilities to compete in the marketplace.”

Image

Credit…Dan Koeck for The New York Times

The Underwood plant and a nearby coal mine that supplies it employ about 660 people, many of whom will probably have to leave the area to find new jobs, said Underwood’s mayor, Leon Weisenburger Jr. “It’s going to hurt those communities severely,” he said. “Some won’t survive.”

But while Great River plans to increase its reliance on wind turbines, it is not giving up fossil fuels and will convert its other coal-fired power plant to natural gas.

Another large utility, the Alabama Power Company, won approval in June to replace some of its coal-fired plants with the equivalent of two large natural gas facilities, even as its parent, the Southern Company, has proposed to make its entire system carbon neutral by 2050. The utility and regulators gave little consideration to renewables and batteries.

Even where elected leaders have committed to eliminating emissions, utilities have found it difficult to rid themselves of fossil fuels.

Mayor Eric Garcetti, for example, wants Los Angeles to have an all-renewable electric grid by 2045. But the city-owned utility, the Department of Water and Power, still gets about 18 percent of its electricity from a coal-fired plant in Utah and about 30 percent from natural gas plants.

Image

Credit…Dan Koeck for The New York Times

It will take five years for the city to end its reliance on coal and much longer to wean it from natural gas. Officials said they would like to move more quickly, but Los Angeles owns some power plants with neighboring municipal utilities and has had to resolve labor contracts, plan the use of transmission lines and line up other energy sources.

Dominion Energy, with more than seven million customers and operations in 20 states, said it had high expectations for offshore wind farms, which have been widely used in Europe for years. The company is erecting two wind turbines off Virginia Beach this year — with blades as high as 620 feet above sea level — as a test for the installation of nearly 200 turbines over the next six years.

While environmental groups have long criticized Dominion’s record, executives say they are committed to a greener grid and are planning to shut two coal-fired plants in Virginia in 2024 before either turns 30. Last year, the company closed six coal plants and converted five to natural gas, a fuel it views as complementary to renewables.

Investors, customers and lawmakers are demanding electricity from cleaner sources. In April, Gov. Ralph Northam of Virginia signed a bill requiring almost all coal-fired power plants to close by 2024 and the state to become a carbon-free electricity producer by 2050.

On Sunday, Dominion and Duke Energy announced that they had canceled the Atlantic Coast Pipeline, which would have crossed the Appalachian Trail, after legal challenges drove up the project’s cost to $8 billion from about $4.5 billion. The two utilities said they had proposed the project “in response to a lack of energy supply and delivery diversification for millions of families, businesses, schools, and national defense installations across North Carolina and Virginia.”

At the same time, Dominion announced a separate deal to sell all of its gas transmission and storage to an affiliate of Warren E. Buffett’s Berkshire Hathaway Energy.

From Dominion’s perspective, its growing focus on clean energy should not have surprised anyone because the utility said it was a pioneer in the use of technologies like energy storage. In the 1980s, it built a power plant near Lexington, Va., that can use excess electricity to pump water to a reservoir at a higher elevation. When power is needed, the company can release water to a lower reservoir. The company said the six-turbine facility was the largest of its kind, able to power up to 750,000 homes and less expensive to operate than a bank of lithium-ion batteries.

Executives said such plants could be built only in certain areas, so Dominion is also investing in batteries. But the company said it had concluded that the current generation of batteries was still too expensive and could generally store only up to five hours of power for the grid.

“Natural gas remains the only resource that allows us to ratchet up and down,” said Ms. Bond, the Dominion policy executive. “We’re absolutely committed to investments in renewable energy — gigawatts’ worth of wind, gigawatts’ worth of solar. We’re also committed to keeping the lights on for our customers.”

Image

Credit…Dan Koeck for The New York Times
Posted on by

G.M. Lays Out Ambitions for Electric-Vehicle Lineup

WARREN, Mich. — General Motors on Wednesday laid out a comprehensive plan to produce affordable electric vehicles, including several new models expected to arrive in the next two years.

A roomier and improved version of the company’s Chevrolet Bolt EV is due late this year. It will be followed by an electric Hummer sport utility vehicle and the Cadillac Lyriq, another S.U.V., which are both expected to arrive in showrooms by 2022.

They were among the 10 models that G.M. presented to reporters and investors at its technical center in Warren, north of Detroit, on Wednesday. The automaker intends to introduce more than 20 by 2023.

The company is hoping that sales of its electric vehicles in the United States and China will exceed one million a year by 2025, said Mary T. Barra, the chief executive of G.M.

“We want to get as many EVs on the road as possible,” Ms. Barra said. “We believe climate change is real and we have the ability and responsibility to create a cleaner, healthier planet.”

Tesla has dominated sales of electric cars so far in the United States and abroad, but G.M. is betting it can catch and possibly surpass its rival by lowering costs and attracting mainstream buyers.

G.M.’s push is underpinned by a newly developed set of batteries, electric motors, electronics and vehicle architectures that can be used for any type of model from a compact car to a full-size pickup truck, company executives said.

This is a developing story. Check back for updates.

Posted on by

Electric Cars Threaten the Heart of Germany’s Economy

ÖHRINGEN, Germany — Öhringen lies deep in automaking country, homeland of Germany’s biggest industry and a source of national pride. And by most appearances, life is pretty good.

The unemployment rate in Öhringen is a mere 2.3 percent. Restaurants, nursing homes and kindergartens are begging for workers. The city government is using bulging tax receipts to build a new secondary school and a hospital.

But just outside Öhringen’s tidy old quarter, dominated by the steeple of a 15th-century stone church, there are signs that the economic upswing that has nourished this idyll is beginning to falter.

A factory that makes air filters is closing, putting 240 people out of work. The plant, owned by Mahle, an auto parts manufacturer based in nearby Stuttgart, is a victim of forces that are reshaping the auto industry and threatening the foundation of the German economy.

Image
Credit…Felix Schmitt for The New York Times

Global car sales are declining at the same time that companies are pouring billions of dollars into new technologies like autonomous driving and electric cars, which are easier to assemble and require fewer workers and fewer parts.

Carmakers, including Daimler and Volkswagen’s Audi division, as well as suppliers like Continental and Bosch, have announced tens of thousands of job cuts in recent weeks. German auto production will be at a 22-year low in 2019 and 2020, according to calculations by Ferdinand Dudenhöffer, a professor at the University of Duisburg-Essen.

Workers are feeling the brunt, and not just in Germany. The upheaval in auto technology was an undercurrent in the United Automobile Workers’ recent strike against General Motors, with G.M. aiming for flexibility in staffing levels as it devotes more resources to electric vehicles.

“For Mahle — and for the industry as a whole — the technological transformation is a monumental task,” said Jörg Stratmann, the company’s chief executive. It means, he said in a statement, “cutting our costs and making tough decisions.”

There is a gnawing feeling that something more fundamental is going on in Germany’s powerful auto industry, which employs 835,000 people, than just another economic cycle.

The growing popularity of electric vehicles could force a shift in the balance of power in the global car business that would have long-term consequences for Germany.

So far, sales of electric cars make up a small share of the overall auto market, but they are growing fast. In October, battery-powered cars and hybrids accounted for almost 10 percent of new car registrations in Europe, according to JATO, a market research firm; figures from another firm, LMC Automotive, put the share at less than 4 percent in the United States. Sales of those cars in Europe were up 40 percent from a year earlier in an otherwise stagnant market.

If the trend continues, it spells trouble for the hundreds of suppliers that make parts for internal combustion engines. The Mahle factory in Öhringen makes equipment that controls the flow of air in diesel and gasoline motors.

“There is a transition toward more electric vehicles that have far fewer components and are easier to manufacture,” Bernhard Mattes, the president of the German Association of the Automotive Industry, said in an interview in Berlin. “Therefore, we can expect less employment.”

Mr. Mattes, former head of Ford’s operations in Germany, quoted studies estimating that a shift to electric cars could cost 70,000 jobs in Germany by 2030. Some estimates are higher.

The effect of those cuts may be felt most acutely in communities like Öhringen, where the local economy revolves around small and midsize manufacturers, often serving the auto industry. Audi, Porsche and Daimler all have factories within a 40-mile radius.

Faced with flat or declining sales in their major markets, the big automakers are expected to pass much of the pain on to suppliers. The carmakers will demand lower prices and begin taking over work that they would have previously delegated to contractors.

Thilo Michler, the mayor of Öhringen, said the local economy was diverse enough to survive the closing of the Mahle plant. The city, with about 25,000 residents, is also the home of other midsize companies such as Huber Packaging, the world’s largest manufacturer of five-liter beer kegs.

“Mahle is painful, but it’s manageable,” Mr. Michler said.

Unemployment is so low that most Mahle workers will probably find new jobs by the time the plant ceases operations by the end of 2020. But they will have trouble finding work that pays as well, and may have to accept temporary contracts that offer little job security, said Rüdiger Bresien, an official of the IG Metall union who represents workers in the area.

Mr. Bresien said job losses from upheaval in the car industry were bigger than they seemed, with companies quietly letting go of workers on temporary contracts.

“In a lot of firms, we see that temp work is going down a lot,” Mr. Bresien said. “But you don’t hear so much about that.”

He said he worried that frustrated workers would be drawn to the far-right, anti-immigrant Alternative for Germany party. In elections for the European Parliament in May, the populist party scored 10 percent of the vote in the state of Baden-Württemberg, which includes Öhringen.

“There is always a risk that people ask, ‘Who’s at fault?’ and ‘Who’s going to help me?’” Mr. Bresien said.

The gently rolling countryside around Öhringen is dotted with factories carrying the logos of companies that may not be household names but often dominate their niche markets. Such companies are a big reason for Germany’s economic success.

Just down the autobahn, for example, is Ziehl-Abegg, a maker of industrial fans that has more than 4,000 employees worldwide.

Owned by a grandson of the inventor who founded the company in 1910, Ziehl-Abegg has achieved soaring sales over the last decade. But this year, sales were flat, reflecting a broader decline in German industrial production.

Germany narrowly avoided recession this year, but German factory output has been declining since the beginning of 2018. The trade war has hit even companies like Ziehl-Abegg that are not dependent solely on the auto industry. More than three-quarters of Ziehl-Abegg’s products are exported.

Ziehl-Abegg is among companies trying to adjust to the shift in automotive technology by using its expertise in electric motors. The company sells a propulsion unit for buses that embeds the electric drive inside the wheel. Ziehl-Abegg says the so-called axle-drive module saves energy because there is no need for a gearbox, which reduces friction.

But the axle drive also illustrates the danger that electric technology presents to the German auto industry. More than a century of expertise in internal combustion engines and transmissions could become irrelevant. German car companies typically build their own motors, but almost all of Europe’s battery cells, which account for a large share of an electric car’s cost, are imported from Asia.

The risk for the established German carmakers is that they will cling too long to old technologies and be overrun by new companies that focus exclusively on electric vehicles. Those include Tesla, which has announced plans to build a factory in Berlin, and Eurabus, a company in Berlin that makes battery-powered buses.

Ziehl-Abegg’s axle-drive module is being used by companies that make sightseeing buses, airport shuttles and other specialized vehicles. But Ralf Arnold, managing director of Ziehl-Abegg’s automotive division, said it had been difficult to win over major bus makers like Daimler or MAN, a unit of Volkswagen.

“What’s still missing is one of the big players,” Mr. Arnold said at Ziehl-Abegg’s headquarters in Kupferzell, about 12 miles east of Öhringen. “They are very cautious. They live in their own world.”