E-Fuel Debate: Combustion Engine Vehicles Could Rapidly Lose Value

In the debate about phasing out the combustion engine and the role of e-fuels in this context, analysts expect a faster depreciation of residual values of conventional models and a sharp increase in maintenance costs. Recently, the new Federal Transport Minister Volker Wissing (FDP) advised against buying combustion engines and granted the use of e-fuels in cars at most a more theoretical sideline. The FDP minister apparently also counts the ecologically controversial plug-in hybrid vehicles among the targeted 15 million e-cars by 2030, thus deviating from the wording of the coalition agreement.

But even their application would become massively more expensive, since they mostly run with gasoline engines on longer routes and generally have higher consumption due to high weight and dual drive, mostly with Otto engines, than conventional diesel or even (bio) natural gas vehicles, which play practically no role in the public discussion as a practical and available bridging technology. According to Prongos Institute, the price of gasoline will rise to 2.50 euros by 2030, while the prices for green electricity will fall due to the targeted expansion of renewable energies.

According to analyses from the US bank Morgan Stanley, which are available to Spiegel Online, a combustion engine "will be so expensive to purchase and maintain in the not-too-distant future" that its continued "role in the mobility ecosystem" cannot be justified.

It would become even more expensive with the so-called e-fuels, which have to be laboriously produced from renewable sources. In a pilot plant built by the climate compensation specialist Atmosfair in Emsland, e-fuel is produced, whose price per liter of crude oil is around five euros. The plant produces enough e-kerosene daily to fuel an Airbus A350 for twelve minutes, summarizes Spiegel Online. Sales through gas stations make no sense, said Atmosfair CEO Dietrich Brockhagen, dashing hopes.

"There is a consensus across all studies that the passenger car segment will be dominated by battery-electric vehicles. It is unlikely that e-fuels in a passenger car can make an effective contribution to climate protection," also explained Falko Ueckerdt from the Potsdam Institute for Climate Impact Research to the online medium.

He calculates that an e-car can reduce CO2 emissions five times more effectively with the same amount of green electricity than a vehicle powered by e-fuel. The energy yield is indeed lousy: While an e-car can travel 100 kilometers with about 18 kWh, an e-fuel-powered combustion engine needs 115 kWh for the same distance. So, with 18 kWh, you can only cover 16 kilometers in an e-fuel car, while it would be 33 kilometers in a fuel-cell model. Apart from the special case of Porsche, whose durable vehicles can continue to be operated climate-neutrally with e-fuel from their own plant in Chile, the outlook for the application is grim. And: Porsche also plans to offer over 80 percent of its new vehicles electrically by 2030.

Residual Values: E-Cars No Longer Exotic - Combustion Engine Risk

At the same time, the residual value risk for electric cars is becoming more calculable. They are no longer exotic, which increases the demand even among those who cannot afford a new car, explained Ernst&Young consultant Peter Fuß last fall. He sees the future risk with the combustion engine (ICE, Internal Combustion Engine) and predicts that the resale value of many models could drop faster "than we can imagine today." The question is less whether, but rather when the point will be reached from which the prices for combustion engines will only fall, said Fuß.

"The combustion engine carries a high risk for its current buyers of becoming a worthless phase-out model," said the much-consulted automotive expert Ferdinand Dudenhöffer recently.

His recommendation: Either buy an electric vehicle right away or lease a combustion engine and pass the risk on to the leasing company.