Volkswagen is emphasizing on e-fuel as a complement to electric vehicles

UClimateless e-fuel vehicles have been the subject of heated debate for years. Many car managers see it as an opportunity to be able to sell combustion models even if road traffic is supposed to be pollution-free. Environmental groups such as Greenpeace, on the other hand, denounce the technology as ineffective. Volkswagen boss Oliver Blume, who has always been an advocate of synthetic fuels produced for renewable energy, is now stepping into the debate. E-fuels must be understood “as a viable technology that makes sense,” he said Thursday evening at the Hamburg Business Press Club. In Europe in particular, many things have been “talked about” recently – “also due to the lack of professional knowledge”.

Blume believes that it is “easily possible” to reduce the price of e-fuel to less than two dollars per liter in the next two to three years. “Then it will be interesting,” he said. One of the problems at the moment is that investors are reluctant to build factories to produce synthetic fuels, also because of the “controversial debates” surrounding the technology. If countries like Germany decide to give tax incentives to e-fuels and thus promote their use, that will change quickly.

The project for VW subsidiary Porsche, which Blume runs alongside his post in Wolfsburg, shows that the production technology is ready for mass production. The electronic fuel plant in Chile is expected to increase its output quickly; from the current 130,000 liters per year to 55 million liters in 2025 and 550 million liters in 2026.

Blume: The future basically belongs to electric drives

According to the current situation, cars in the EU should not emit any CO from 2035₂ emit more, which is equivalent to banning combustion engines. E-fuel is produced from water and carbon dioxide using electrical energy. Their use should be moderate. But there is still no agreement in the EU to allow cars with combustion engines to continue beyond 2035 if they use only electric power. Blume calls for a “clear legal situation to be established”. It is not only about the sale of new cars, but above all about the number of combustion engines on the road. This could also become more climate friendly more quickly if biofuels were mixed with fossil fuels, as is the case in aviation today.

Basically, the future belongs to electric drives, emphasizes Blume. E-fuels are a “supplement” that helps accelerate decarbonization, and not only on the road. “It’s about ships, it’s about planes, where we have no other solution.” At the same time, the sports car manufacturer from Stuttgart is expanding the range of electric vehicles, for example with the electric version of the Macan SUV.

Comparing with gas station network structure

Electric cars are currently not selling as expected, because the charging network is not close enough. In cities like Berlin, there are too few charging stations, criticizes Blume. However, problems with the infrastructure are not a reason to doubt the electric car per se. “This is a development that was similar to the combustion engine,” he says – and then draws a historical line in the initial phase of the car. At that time, gasoline was sold by pharmacies. “And then the gas station network was created for a very long time, the same situation will happen with the electronic payment network, just because there is a big incentive for the gas station operators to invest in the technology. On average, their sales are twice higher than a regular petrol pump.

At the same time, electric cars should be cheaper. VW wants to bring models to market for 25,000 euros and is also working on a small car for 20,000 euros. According to rumours, the Wolfsburg-based company is also exploring a partnership with Renault. Blume just wants to say this: “We are exploring different approaches, and a partner solution may also be an option,” because cost and higher volumes are important, especially in the low-end segment. Buying incentives are also important, namely subsidies for car buyers, which the federal government has just canceled. Blume advocates restoring it to some cars.