Across-the-board car buyer premium is “sweet poison” for industry – think tanks

An economic stimulus for the car industry must contribute to fighting climate change by stimulating the demand and supply of electric mobility, argue clean mobility think tank Agora Verkehrswende* and its energy transition counterpart Agora Energiewende*. "The economic stimulus package should be used to accelerate the change of course in industry towards electric mobility, which was initiated with massive investments," a paper outlining a green stimulus proposal by the organisations says. A relaxation of emission limits or an across-the-board buyers' premium for all types of cars, as favoured by car industry lobby group VDA, "would be sweet poison for manufacturers: it would delay development and undermine the international competitiveness of companies", the think tanks add.

To increase demand for low-emission vehicles, they call for increasing the buyers' premium for pure electric cars. Buyers of plug-in hybrids should only get additional support if they drive mainly in electric mode. A vehicle tax reform should make emission-heavy cars more expensive to run and low-emission alternatives cheaper. They also favour extending existing support programmes for electric light-duty vehicles and for cargo bikes, and ramping up support for the installation of up to 200,000 charging points in private homes and workplaces. To increase the supply of clean mobility solutions, the think tanks call for additional support for battery cell production and an investment fund for new mobility start-ups. Furthermore, large-scale pilot projects on the country's Autobahns should test the three prime candidates for cleaning up heavy duty road transport – lorries equipped with catenary systems, fuel cell trucks and battery-electric models.

The paper warns that "the serious restrictions on public life in Germany and the risk of infection, which is likely to continue for some time to come, endanger the role of public transport as the backbone of the mobility transition". To give urban public transport a boost, the think tanks call for the establishment of "premium bus services" on dedicated road lanes to increase capacities, and a digitalisation push to integrate conventional public transport and new mobility services such as bike and car sharing, ride-pooling and micro-mobility. "This can steadily increase the attractiveness of public transport after the corona crisis. "

*Like Agora Energiewende and Agora Verkehrswende, the Clean Energy Wire is funded by the Stiftung Mercator and the European Climate Foundation.