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FULL ARTICLE | EDITORIAL 
Is it thumbs up for Germany’s autoindustry lobby?
Peter Schmidt | Editor

Published: Fri, 04th March 2016 13:54:45 GMT
 

Electric cars on charge in Berlin Germany AID Newsletter


Open quote signThe operation of the Prussians upon the enemy’s flank was a most decisive one”.  Reminiscent of Wellington’s own account of the French defeat at Waterloo, will Germany’s rumoured decision to pay an electric car subsidy from midyear turn the autoindustry’s hitherto losing European electric car sales battle to victory? That is the question taxing some industry minds at present.

History shows that consumers’ appetite for electric cars and plug-in hybrids, developed at great expense by the carmakers, will tempt a steady flow of early adopters. 

But only if supported by large financial handouts, a reasonable electric car infrastructure and a tempting assortment of sweetheart operating conditions. 

But then again, the moment these handouts are stopped or scaled back, demand for these cars disappears as quickly as the nutritional substance of a plateful of cornflakes. 

Increasingly, these subsidies have come under fire. 

As one wit has put it, albeit for the American market, and evidently talking about Tesla’s oh-so-trendy Model S: Cars built by a US billionaire and bought chiefly by California’s millionaires with subsidies coming mainly from Joe Public’s taxes. 

Germany’s current coalition government appear all too aware of that. 

Broad brush, but why should taxpayers subsidise automotive toys for the rich. 

No surprise then that Germany’s ruling government is reluctant to follow today’s electric car subsidy culture in say France or the UK. 

A subsidy package along today’s Norwegian lines has been dismissed outright as pie in the sky. 

Late last year, Denmark’s government for one decided that enough is enough. 

Since January this year these incentives were scaled back a great deal. 

Almost the same goes for the Netherlands, albeit for PHEVs. No surprise, prior to the deadline – end of December last year – sales of such vehicles went through the roof, slowing to a mere trickle this January. 

While Germany’s government sat on the fence, the country’s powerful and hugely influential autoindustry federation continued to lobby parliamentarians. 

Germany’s government, hard-pressed by mounting political pressure on today’s incendiary refuge crisis, finally appears to have thrown in the towel. 

But there is a fly in the ointment. 

Shock, horror. 

AID has learned that Germany’s government insists that two-thirds of the subsidy, say €3,500 of a conceivable €5,000 subsidy must come out of the carmakers’ own bulging pockets. 

Good decision. 

It is crystal clear that carmakers would be the ultimate beneficiaries of such a move. 

Why? 

Electric cars and PHEVs, sold in reasonable numbers in Europe, act as an autoindustry lifeline to meet the EU’s stringent 2021 CO2 95g/km fleet average levels.

Now, IF it is confirmed, what will it do to Germany’s hitherto lifeless electric car market? 

Judged from recent developments in a number of European countries, one thing seems certain, it would be wildly optimistic to expect a Norwegian type electric car sales bonanza. 

To do that far bigger guns on the incentive front are needed. 

Realistically, given similar subsidies in the UK and France’s €10,000 superbonus, the best that can be expected is an initial straw fire response from German consumers and companies. 

This inevitable initial sales flurry is likely to revert back to the trickle of monthly sales seen today in subsidised France and the UK for instance. 

Now, if things really turn out that way, say a monthly electric car sales penetration in the region of 1 per cent, does Germany’s reluctant late decision to move forces into Europe’s electric car battle turn the tide of a losing battle to ultimate victory?
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