Germany Outlaws the Internal Combustion Engine... Now What?

It’s the biggest carmaker in Europe and the third-biggest globally… and just a few days ago, it told the world that it will no longer be producing vehicles powered by gasoline or diesel.

The news couldn’t be much worse for the future of the internal combustion engine — on any and every level.

140 years ago, it was three Germans — Nikolaus Otto, Gottlieb Daimler (one of the two men behind Mercedes-Benz), and Wilhelm Maybach — who patented the four-stroke engine… the very configuration that drives just about every modern internal combustion-powered vehicle.

Three years after that, Karl Benz, the other half of the Mercedes-Benz brand, patented the two-stroke engine.

And 13 years later, it was Rudolf Diesel, also a German, who invented the compression-ignition engine that carries his name to this day.

All in all, Germany’s engineers contributed more to the science and industry of internal combustion than any other nationality, a heritage that is still evident today.

Cars are Germany’s biggest industry. Period.

Germany’s Big Three automakers, Mercedes, BMW, and Audi, make it the third-largest auto manufacturer in the world, after the U.S. and Japan.

Their history of innovation and driver experience–oriented engineering makes those brands the most sought-after by well-heeled consumers and a universal hallmark of success and status.

One would think that given this history, this success, and this reliance on the automobile, Germany would protect the status quo with a passion.

The End of Gas and Diesel… Brought By Those Who Created Both

And yet earlier this week, the Bundesrat — the federal council of the 16 German states — voted to ban both gas- and diesel-powered vehicles by the year 2030.

The resolution was passed by both sides of the German political spectrum, making it one of those rare moments when both liberal and conservative lawmakers agreed on something.

Moreover, the resolution calls on the executive arm of the European Union — the European Commission — to “evaluate the recent tax and contribution practices of Member States on their effectiveness in promoting zero-emission mobility.”

Translation: they are trying to end lower tax rates on diesel-powered fuel, which has long been seen as a viable alternative to gasoline, across the continent.

In short, it’s a declaration of all-out war on the internal combustion engine in all of its forms, and it’s been made by one of the industry’s biggest supporters and biggest benefactors.

As far as dominoes go, Germany is the biggest one in Europe, and it has been for a while, in all respects.

Politically, economically, and socially, the Federal Republic of Germany is the most important, meaning that any sweeping initiatives succeeding there are likely to go on and succeed elsewhere in the European Union.

And it’s not like the argument will be hard to make to the other states, either, as carbon dioxide emissions control and curbing have long been priorities in Western Europe.

It’s No Longer Just a Sign. It’s Happening.

So where Germany goes, there too will follow the rest of its partner states.

Which means that in the next decade and a half (and trust me, this pains me to say as much as it will pain many of you to hear), we’ll be saying goodbye to things like gas-powered Porsches and Lamborghinis (the brand is owned by Audi), gas-powered Ferraris, not to mention internal combustion–powered products from the rest of the continent’s most famous brands.

Japan, which has long been a pioneer in the EV market, is already taking steps to make similar changes.

Diesel vehicles have already been banned in the nation’s capital city of Tokyo, and from the look of things, that’s just the beginning.

Since 2012, Japan has boasted the highest ratio of charging stations to vehicles of any in the world, and its cumulative electric vehicle fleet is now on pace to overtake Europe and the U.S. on a per-capita basis.

The conclusion to be drawn from all this is that no matter how you look at it, the death knell for gas and diesel is being tolled around the world.

And no amount of crying or screaming from the contracting gearhead population is going to reverse that trend.

In the U.S. and across the Western world, the obvious pick to lead this charge towards electric-powered vehicles has been, for at least the last five years or so, Tesla Motors (NASDAQ: TSLA).

It builds the most popular, most recognizable, and fastest electric-powered vehicles on four wheels, bar none.

Its entire corporate identity was founded on the premise that electric doesn’t have to be boring or nerdy. It can, as the company has proven with its Roadster and S models, be both fast and sexy.

The Future of Performance? Maybe Not

So for the gearheads among us who will be holding onto our carbon dioxide–belching cars and trucks until the last second, the prospect of a performance-oriented replacement definitely offers a bit of hope, if not inspiration.

As somebody who’s owned a succession of vehicles built for speed and power at the cost of (or total indifference to) efficiency, the idea that I will be able to go from 0 to 60 in less than four seconds sounds pretty good.

However, there is a problem, and it’s a big one.

From the look of things, Tesla may be about to fumble the ball, and fumble it big time.

The problem isn’t with its cars, however, but with something more fundamentally important to the company: the batteries powering its cars.

With more than $5 billion invested in the world’s biggest lithium-ion production facility, and with a target production capacity aiming to account for roughly half of global production, it’s a problem that threatens the company’s very existence.

Few people outside of the industry know anything about this, but Tesla’s own partners — including one of the major German carmakers I mentioned earlier — are already starting to abandon the lithium giant for better options.

It could spell the end of one of the 21st century’s greatest technological success stories.

Get the details right now by clicking here.

Fortune favors the bold,

Alex Koyfman

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