Germany rebuffs gasoline auto lobby with radical electric plan

Daniel Fowler
June 6, 2020

This move, according to Reuters, could provide a "significant boost" to EV demand in the country-which is doubling its stimulus payment (upwards of $10,000) for folks buying electric vehicles.

French President Emmanuel Macron last week announced a similar $9 billion rescue plan, including grants of up to $7,900 to encourage electric vehicle sales and $3,400 bonuses for people upgrading to "a less polluting auto", the BBC said.

Germany unveiled sweeping incentives for cheap electric cars, providing a boost to Volkswagen's VOWG_p.DE electric push while penalising heavy sports utility vehicles (SUVs) with new staggered taxes for polluting combustion-engined cars.

A number of carmakers, particularly those in Germany, have noted that electric cars will be a key part of their strategies moving forward.

Berlin's 130 billion euros ($147.41 billion) coronavirus stimulus plan follows French President Emmanuel Macron's pledge to make France the top producer of clean vehicles in Europe. But EV advocates quickly praised the move as a boost to electric-car adoption. In accordance to the newest survey from Germany's Ifo Institute, vehicle firms in the nation evaluate their current small business predicament as worse than through the global economic crisis in 2009. A similar improvement in fuel efficiency of gasoline powered cars has led to a reduction in the number of petrol stations.

"The lowering of VAT will hardly provide an impetus", said Peter Fuss, a partner at EY, adding that electric cars are still too much of a niche product to lift the overall market. When combined with previously announced expenditures and fiscal savings, the total amount of emergency stimulus in Germany has now reached the cumulative 14% of GDP. From January 2021, cars with emissions higher than 95 grams of Carbon dioxide per kilometre will face increased levies. Due to the popularity of SUVs, average emissions of new cars rose to 154.8 grams per kilometre in May.

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' It's a very clear commitment to battery-powered vehicles and establishes electric mobility as a technology of the future.

Germany said it will oblige all petrol stations to offer electric auto charging to help remove refuelling concerns and boost consumer demand for the vehicles as part of its 130 billion euro ($146 billion) economic recovery plan.

Germany plans to spend Euro 2.5 billion on battery cell production and charging infrastructure, which is an attractive field for oil majors, utilities and carmakers, with some vying dominance including Shell, Engie and Tesla.

One of the biggest reasons behind the low sales of electric cars is the range anxiety among the customers. The percentage is improving, though, because in 2019 only 1.8 percent of new cars sold in Germany were electric.

The German government will double existing subsidies to 6,000 euros ($ 6,720) for electric vehicles costing up to 40,000 euros ($ 44,800), Chancellor Angela Merkel's Christian Democratic Union party reported.

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