Germany earmarks €3bn to support its auto industry

·Germany Correspondent, Yahoo Finance UK
·2-min read
Charging points and electric cars in the Hannover region, Germany. Photo: Julian Stratenschulte/Picture Alliance via Getty
Charging points and electric cars in the Hannover region, Germany. Photo: Julian Stratenschulte/Picture Alliance via Getty

Germany’s powerful car industry is to receive additional financial support from the government to help it get through the coronavirus pandemic and migrate to clean mobility.

The country’s automotive manufacturers, auto-supplier companies, and trade union bosses met chancellor Angela Merkel and her ministers in Berlin on Tuesday (17 November) to hammer out a raft of aid measures.

Just before the meeting, the government signed off a new package worth more than €3bn (£2.7bn, $3.6bn), €1bn of which will be to cover the cost of extending buyer premiums for electric cars until the end of 2025. They were supposed to be terminated at the end of 2021.

"We want to combine the way out of the economic crisis with the way out of the climate crisis," said environment minister Svenja Schulze ahead of the meeting. "This boost will do the automotive industry good in the long term."

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Berlin will also allocate another €1bn to finance a scrapping premium for heavy commercial vehicles — including public sector vehicles — and boost buyer premiums on new electric or hydrogen vehicles instead of diesel.

Another €1bn from the pot will go to the “Future Fund for the Automotive Industry” to support the migration to clean mobility, including funding tech projects.

The substantial support package was praised by industry representatives. Hildegard Müller, president of the German Automotive Association (VDA) said: “The total of €3bn invested by the federal government is an important contribution.”

Müller has been saying that the slow build-out of Germany’s electric charging network is going to affect the uptake of new e-cars. At Tuesday’s meeting, the government said it wants gas stations to start putting charging stations on their forecourts — every fourth petrol station should have a charging point by the end of 2022, it said. By 2026, this needs to be 75% of all stations.

The government’s goal is to hit 1 million charging stations by 2030.

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