Germany weighs higher e-car support payments as local carmakers drag feet

The German government is weighing an 11,000 euro subsidy for electric cars in a bid to help the country’s hard-hit auto industry in the coronavirus crisis, even though the sector is having major problems delivering e-cars, Emil Nefzger and Nils-Viktor Sorge write in Der Spiegel. According to the report, leaders in the car-making states of Bavaria, Baden-Württemberg and Lower Saxony are pushing for the five-digit financial incentive in order to boost e-car technology, secure jobs in the sector and reduce CO2 emissions. But the carmakers themselves have been dragging their feet in making e-vehicles available, and a subsidy incentives would likely not achieve much due to Germany’s overall dearth of available e-vehicles.

German automakers have for years seen building e-car factories as unnecessary and have instead invested heavily in new SUV models with climate-damaging internal combustion engines, with the support of lawmakers, the article points out. A premium incentive that would make it more lucrative for buyers to purchase e-cars would likely only benefit U.S. rival Tesla, as the California-based automaker would probably be the only manufacturer able to supply enough electric cars if demand is spurred by a purchase premium. 

Tesla is investing several billion euros in a factory in Grünheide, outside Berlin, which will produce both electric cars and batteries. The move has been hailed as a potential gamechanger for the German e-car industry, but has also faced questions about its local environmental impact and potential use of government subsidies.