BERLIN: Chancellor Angela Merkel’s government and Germany’s carmakers agreed to increase cash incentives for electric cars as they attempt to accelerate the transition away from the combustion engine and reduce harmful emissions.
A so-called “Environment Bonus” will be raised by half to as much as €6,000 (US$6,680) per electric vehicle and the auto industry will continue to cover half the cost, Merkel’s chief spokesman, Steffen Seibert, said in a statement in Berlin. The changes will take effect this month and run through 2025, according to Bernhard Mattes, president of Germany’s VDA auto lobby.
“It will therefore be possible to provide support for 650,000 to 700,000 more electric vehicles, ” Seibert said. The measures were agreed at Monday evening’s meeting in Berlin between Merkel and officials from automakers, parts suppliers and labour unions, including the chief executives of Volkswagen AG (VW), BMW AG and Daimler AG.
The accord came a day after Merkel visited a revamped VW electric-car plant in Zwickau, eastern Germany. The chancellor has come under fire for failing to make more progress in curbing greenhouse-gas emissions, while VW – the world’s biggest carmaker – is attempting to manage the costly shift to electric vehicles without running itself into the ground.
Merkel called the challenges facing the industry “a paradigm shift in mobility that has never been realised in automotive history.” It remains unclear, however, how many German customers will switch to electric cars in a country with a rich automotive heritage centered on combustion engines.
Because of higher costs for development and batteries, the price of an electric car remains well above the level for a comparable combustion-powered model. VW’s ID.3, for example, will start at around €30,000, while their new Golf with a traditional engine will start at less than €20,000.
The government’s push to promote electric cars includes boosting the number of public charging stations to 50,000 within two years, Seibert said. Automakers will help fund 15,000 of the stations by 2022.
Merkel said in a podcast Sunday that the government’s focus is on promoting electric vehicles, but that it’s also open to hydrogen technology. It wants one million charging stations to be in place by 2030. — Bloomberg
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