Electric car: the new German government reassures Volkswagen, Mercedes and BMW

Posted on December 3, 2021 at 8:38 amUpdated on December 6, 2021 at 18:02

“I hear the champagne corks popping from here on the side of the auto federation. For car specialist Matthias Schmidt, the announced appointment of a liberal from the FDP, Volker Wissing, as head of the Ministry of Transport is good news for Volkswagen, Mercedes and BMW. The arbitrations found in the coalition contract of the future head of government Olaf Scholz, with the Greens and the Liberals, delighted the country’s large manufacturers, launched into a policy of electrifying their sales.

“I see at least three numbers I like,” says Daimler boss Ola Källenius: “15 million electric cars, 1 million charging stations and 80% renewable energy” by 2030, he lists. Mercedes parent company already plans to secure 50% of its sales with all-electric vehicles from 2025 to meet the challenge that comes with the European Commission’s climate plan and the ban on heat engines in 2035.

One in two electric cars by 2022

The effort, however, is robust for Rudolf Diesel’s country. To reach 15 million electric vehicles by 2030, “one in two newly registered cars will have to be purely electric from 2022 onwards”, sums up Hildegard Müller, president of the auto federation, the VDA.

Currently, there are about 517 billion vehicles out of the 48.5 million in circulation. But its market share reached 17% in October and that of plug-in hybrids 13.3%.

The end of bonuses in 2025

The instruments used to carry out this tour de force are still unclear. The new government’s contract provides that the current bonus for the purchase of electric vehicles “will no longer be necessary” after 2025. The status of hybrid vehicles is not specified, due to a lack of agreement on the issue between the Greens, the SPD and the liberals.

The current bonus, which supports 100% electric and plug-in hybrid cars, will be extended until December 2022, in particular given the current delivery difficulties from manufacturers linked to shortages of electronic components. This aid is to be gradually reformed to subsidize only vehicles with “minimum” electric range, i.e. 80 kilometers, from the summer of 2023 instead of 2025 as initially planned by the Merkel government.

A special statute for biofuels

A sensitive point, the coalition does not take a clear position on the future Euro 7 emissions standards, currently under negotiation, limiting itself to calling for an “ambitious” but “achievable” anti-pollution standard, which takes into account “the creation of and jobs.” Ambiguity also in the timing of release of diesel bonuses and the maintenance of alternative fuels during a transition period. Another explosive topic.

Maintaining expensive synthetic fuels will be essential for trucks, but also for some models, like the Porsche, expensive to top the liberals’ list. It is also a key issue for the auto federation, which has many internal combustion engine-dependent subcontractors among its 650 members.

“Some things still need to be concretized and formulated” in this sense in the coalition contract, summarizes Hildegard Müller. To prepare for a lobbying that promises to be intense, the political leadership of the VDA will be led from February by Andreas Rade, the former chief of staff of a prominent green lawmaker. His appointment already marks an era change in a federation hitherto dominated by Angela Merkel’s CDU.

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