E-car models with managers in the back seat will probably not be driving up to the Federal Ministry of Economics on Monday. The discussion between Robert Habeck (Greens) and representatives of Germany’s most important industry, marketed as an “auto summit”, will only take place virtually. Neither a combustion engine nor an electric car is required to dial into the video link.
The IG Metall union called for a “quick, new funding package to boost the sale of electric cars,” quoted the Picture on Sunday the union. Similar wishes come from the Social Democrats. The SPD parliamentary group wants to offer a “scrappage bonus 2.0” for combustion engines, said Sebastian Roloff, member of the SPD parliamentary group’s economic working group, dem starAnyone who buys an electric car should therefore receive up to 6,000 euros if they shut down a combustion engine in return.
The scrappage premium 1.0 was introduced after the financial crisis in 2009. It was part of the economic stimulus package with which the then black-red federal government wanted to support the German economy. Car buyers received 2,500 euros if they had their old vehicle scrapped. The subsidy cost taxpayers five billion euros. Economists have called for a similar program detected in the USAthat the scrappage bonus there did not lead to more vehicles being bought overall. People simply brought forward their visit to the car dealer to the months in which they could collect the bonus.
The coalition partner FDP rejected the SPD proposal. “A scrappage premium distorts the market, favours an industry that is already being supported and burdens the state budget,” tweeted Reinhard Houben, the economic policy spokesman for the FDP parliamentary group. Instead, the Liberals want to implement economic reforms that would benefit all companies.
The German car industry has been weakening for years. It now produces around 20 percent less than in 2017. Since then, the industry has suffered from the self-inflicted diesel scandal, the Corona crisis, trade conflicts and supply bottlenecks. The three major German car manufacturers Volkswagen, Mercedes and BMW are all currently under pressure. After Mercedes announced that it expected significantly lower profits, the group’s share price fell by 6.8 percent on Friday.