Volkswagen, First Hydrogen, Lufthansa – Future Technologies for Transport in Focus

Despite the crisis: Volkswagen bets on hybrid production in Poland – is this the solution?

Declining sales of electric vehicles and high investment costs for their development are weighing on Volkswagen and Germany as a business location. This crisis not only affects German companies but also strongly impacts the Austrian automotive supplier industry. The situation is leading to job cuts and impending insolvencies.

A virtual auto summit this week is supposed to extinguish the existing fires by bringing all stakeholders together at a round table. The IG Metall trade union emphasizes the key role of the automotive industry for Germany and calls for new funding measures for e-mobility to secure jobs. Economics Minister Habeck wants to continue the talks but already sees incentives for e-vehicles through tax breaks and lower operating costs without considering the necessary additional funding.

The summit participants are slowly realizing that Germany needs a widely developed charging network to even get more electric vehicles to the people. The devil is in the infrastructure details. This urgently needs to be addressed to give the electric vehicle even a remote chance in the medium to long term.

The German Association of the Automotive Industry VDA is pushing for a realignment of political priorities in Berlin and Brussels. According to the VDA, the focus must be on competitiveness and attractiveness as a business location. The association's key demands are the aforementioned expansion of the charging infrastructure, financial incentives for e-mobility, and a positive communication strategy to promote electric vehicles.

Meanwhile, the Wolfsburg-based carmaker prefers to produce in neighboring Poland. The new VW Caddy eHybrid has a total output of 110 kW, which is composed of a combustion engine and an electric motor. The model is popular with tradespeople and other service providers. Thanks to the spacious loading area, the vehicle is versatile. With a usable battery capacity of 19.7 kWh, the Caddy achieves a range of up to 122 km on a single charge. Who would seriously want to buy that?

First Hydrogen scores with 630 km range for hydrogen van, and expands to Germany

The Canadian company First Hydrogen, with locations in Vancouver, Montreal, and London, specializes in zero-emission vehicles and the production and distribution of green hydrogen.

The zero-emission vehicles (FCEV) are powered by hydrogen fuel cells. Initial tests in the UK under real-world conditions have achieved a range of more than 630 km with a single refuel after 6,000 km of test driving. The tested models are designed for vans to specifically address fleet operators in logistics. Now the Company is opening an office in Germany to bring its expertise directly to major carmakers such as Mercedes, Audi, VW, and Porsche.

Germany adopted a national hydrogen strategy in 2020 and committed to the sustainable production of green hydrogen. In addition, a new hydrogen law was drafted at the end of 2023 that provides for the construction of a 9,700-kilometer "hydrogen highway" using existing natural gas infrastructure. In addition, 17 hydrogen hubs ("hydrogen valleys") are in operation, under construction, or in the planning stage. The aim is to promote the use of clean hydrogen as an energy carrier and support the transformation to a climate-friendly economy. The goal of First Hydrogen is clear: to enter the German hydrogen ecosystem with the hydrogen-powered commercial vehicle (FCEV).

The German Minister for Economic Affairs, Robert Habeck proposes to suspend the EU targets for green hydrogen until 2035. These rules stipulate that green hydrogen can only be produced with additional renewable energy sources and at the same time as electricity production in order to receive funding. The aim is to avoid slowing down the expansion of renewable energies and to prevent double subsidies. If that succeeds, First Hydrogen is set to accelerate rapidly.**

Lufthansa Cargo introduces surcharge for sustainable fuel, passenger business on cost-cutting course

Lufthansa Cargo has announced that it will introduce a surcharge for cargo customers from January 1, 2025, to cover the costs of the mandatory use of sustainable aviation fuel (SAF). The surcharge will be levied for cargo handling from EU countries and is in response to new EU regulations that require airlines to add 2% SAF to conventional kerosene. This rate is set to increase to 6% by 2030 and 20% by 2035. By 2050, an increase to 70% is even planned.

Swiss International Airlines, an affiliate of Lufthansa, is also planning to introduce a mandatory SAF surcharge for its cargo division from the beginning of next year. Both companies will integrate the SAF surcharge into their existing surcharge structure, which already covers additional costs such as fuel prices above certain thresholds and airport security fees.

Cost-cutting measures are also being implemented in the passenger business. According to a report by Spiegel, Lufthansa Group CEO Carsten Spohr has internally hinted at the possible suspension of the daily flight route between Frankfurt and Beijing. Shorter flight times and lower fuel costs enable Chinese airlines to offer cheaper tickets. This is putting pressure on European airlines like Lufthansa to lower their prices despite longer flight times in order to remain competitive.** Since the beginning of the year, Lufthansa's share price has been on a downward trajectory, losing 16% to date. It currently stands at EUR 6.53.

Volkswagen is struggling with declining sales of electric vehicles and high investment costs. The Company is relocating production of the Caddy eHybrid to Poland to reduce costs. The measures, along with a focus on hybrid models, could stabilize profitability in the short term, but the successful transformation to electric mobility remains crucial in the long term - if customers even desire it. A prerequisite for this is the appropriate infrastructure, which typically lies in the hands of federal and state governments, rarely in the private sector. First Hydrogen is expanding into Germany and the promising test results of FCEVs offer growth potential. However, the hydrogen market is still in the development phase. Given the economic challenges facing industrialized nations, however, energy supply is essential. Lufthansa Cargo introduces SAF surcharges to compensate for rising costs. In addition, Lufthansa AG is considering discontinuing unprofitable routes such as Frankfurt-Beijing to counter competitive pressure. Adjusting the route network in the passenger business aims to increase efficiency.