To Regulate Or Not To Regulate?

Template titled "To Regulate Or Not To Regulate?" featuring an image of a fast driving car in nigh time.

At the end of last year, our CEO Gunnar Froh spoke with Laurin Hahn, founder of Sono Motors, on the Wunder Mobility Podcast. They discussed the development of a solar-powered electric car. What does it take, how does it work, what successes have there been and where do the difficulties lie? In this article, created in collaboration with the Bernstein Group, we dive deeper to look at what conclusions can be drawn from this form of innovation for political decision-makers.

One important aspect is the timing, which is currently a crucial turning point. According to Laurin Hahn, “after 100 years, the industry is just now going through a time of upheaval. […] All of a sudden everything is changing. Everyone is at ground zero. And in this phase, in these two to three or two to five years, you have the chance to go through this open window, this ‘window of opportunity’, and position yourself in the market. And that’s the phase we’re in right now. I would say 2019 was the year where electric cars first became cool.” So the development of electric mobility, and perhaps its innovation, is at its peak.

The Age of Electromobility

More and more car manufacturers are offering e-cars, and consumers are also placing increasing value on sustainable mobility. Sono Motors is going one step further and even integrating power generation into their vehicles through integrated solar modules.

Do political decision-makers have a role to play in such innovation? Can and should they shape, even promote, these developments and the current window of opportunity? Is it their task to take on these innovations and create the political and legal framework for them?

Probably yes. But how?

Germany as a Start-up Country

“It’s incredibly difficult to start a company in the hardware sector in Germany. First of all, Germany doesn’t have that kind of startup culture, and secondly, the financing culture here is massively different than in Silicon Valley or China.”

Counteracting this state of affairs can be the task of politicians, among others. It’s up to them to create a framework that allows Germany to become a startup country. A framework that promotes innovation and creates scope for new ideas. Opinions differ in both politics and business on the question of whether politics should also provide funding. While some would at least see this as an important sign, others would rather call for changes to award and funding guidelines to allow young companies to participate in the multitude of public contracts.

The Political Responsibility of Openness

The example of Sono Motors shows how important political support and funding is for the development of new companies in Germany. But it also shows how important political openness is at the same time for the emergence of new ideas. Overly strict regulation that is very limited to existing ideas and concepts from the outset and merely provides a detailed legal framework in the interests of these prevents new ideas from emerging.

A company as new as Sono Motors can only be founded if the idea is not blocked from the outset by regulation that is too specific. It is therefore necessary, on the one hand, to create a general regulatory framework for planning security in the field of electromobility and, at the same time, not to impose too many restrictions. Innovation means developing an idea that did not exist before and therefore could not be taken into account in regulatory terms. Promoting innovation can therefore mean leaving laws as open as possible to keep the path clear for new ideas.

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