Be done with false incentives
It is a blow to the car country Germany. Just three days after announcing austerity measures in the federal budget following a verdict by the Federal Constitutional Court, the governing coalition cancelled the subsidy for the purchase of battery-powered electric vehicles (BEVs) ahead of schedule.
The outrage at the abrupt end of the state environmental bonus is understandable. Reliability seems to be a foreign concept for some leading politicians in this area. At first glance, the measure is counterproductive for electromobility, which has been praised as environmentally friendly. Following the end of subsidies for hybrid cars and electric company cars, there are signs of a renewed slump in new registrations.
The federal government's electrical strategy has failed. Berlin's goal of bringing around 15 million BEVs onto Germany's roads by 2030 is unrealistic. Experts recently assumed, at best, 8 to 9 million. Even that might be a misassessment. The largest EU economy currently has 1.3 million. BEVs only make up 3% of the car population.
Norway as a role model
Germany's development is lagging behind other countries. Norway is considered a great role model. While BEVs recently accounted for 84% of new car registrations there, in Germany, it was a meagre 18%. The comparison shows that purchase bonuses in Germany created false incentives right from the start. A massive tax on the purchase of cars with conventional combustion engines, as is the case in Norway, would probably have provided the decisive impetus to accelerate change in Germany as well. Given the strong car lobby in this country, politicians shied away from this. The government coalition does not have a plan B.
Affordability is the decisive keyword. Because the purchase of electric cars is unaffordable for small to medium incomes. The predominantly large models are too expensive. Against this background, the criticism is understandable that it is primarily the well-heeled who benefit from the purchase premiums financed with tax money.
Since Berlin no longer provides any funds, the hope remains that market forces will bring a breakthrough. Ultimately, the pricing mechanism through more competition is a better alternative to driving electromobility than government intervention in the wrong place. The push by Chinese carmakers and the introduction of more minor, affordable BEV models are paving the way.
