Handelsblatt auf Englisch Germany to Rev Up Flagging E-Car Market

The German government, concerned about the slow growth of the electric car market, is planning incentives to boost demand. Concrete steps could be announced at an e-mobility congress in Berlin this month, Handelsblatt has learned.
There are current calls for e-mobility support. Quelle: picture alliance / dpa, Fotolia [M]
Germany to rev up Flagging E-Car Market

There are current calls for e-mobility support.

(Foto: picture alliance / dpa, Fotolia [M])

The land of the motor car, which is home to some of the world’s most successful automakers and famously has no general speed limit on its Autobahns, has been painfully slow to embrace electric vehicles.

The cost and weight of such cars, together with concerns over their range and performance, has left Germans firmly wedded to the combustion engine, even though there is a growing range of e-cars in the market.

Chancellor Angela Merkel’s goal of reaching one million electric cars on the road by 2020 is looking ever harder to reach five years after she announced it.

So far, Germany has not followed the example of countries like France or Britain that offered direct purchase subsidies to accelerate demand for electric cars.

At present, only 24,000 of the well over 60 million vehicles licensed in Germany are electric. Including hybrid vehicles, the figure is 127,000. Of that total, 60 percent belong to commercial buyers. In February, registrations even declined year-on-year.

“We’ll only reach the target if the figures rise every month,” said Kirsten Lühmann, a transport policy spokeswoman for the center-left Social Democrats, junior coalition partners to Ms. Merkel’s conservatives.

Alarmed at the lack of progress, 14 lawmakers from the ruling parties have sent a letter to Finance Minister Wolfgang Schäuble calling for a major buying incentive for corporate purchasers of electric cars, Handelsblatt has learned. They urged the minister to allow a special writedown amounting to 50 percent of the price in the first year.

“We’re pinning our biggest hopes on fleets in particular,” said the letter seen by Handelsblatt.

Steffen Bilger, an expert on e-mobility in Ms. Merkel’s Christian Democratic Union party, said: “We can’t just wait for the market to develop. It’s time to introduce a special writedown."

Handelsblatt has learned that intense talks with Mr. Schäuble are taking place ahead of a major meeting in mid-June of the German National Platform for Electric Mobility (NPE), a forum that brings together the government, carmakers and suppliers as well as business and research organisations.

Ms. Merkel and many of her cabinet will attend the two-day event, the second major conference on e-mobility since the forum was set up in 2010. The coalition wants to make sure that the conference yields concrete measures to give the e-car sector the boost it urgently needs, sources said.

Talk of such steps has increased in recent months. In April, Environment Minister Barbara Hendricks called for “temporary financial measures” to support the market and sources in the Transport Ministry said that while the government remained opposed to a purchase grant, it was considering tax incentives for corporate fleets of electric cars.

It’s not just about reaching the goal of one million electric cars. Electrifying entire fleets of corporate vehicles will also make it easier for German automakers to meet tighter European Union limits on carbon emissions from new cars. From 2020, average emissions from their model ranges will be capped at just 75 percent of current levels.

Coalition sources said Ms. Merkel will back demands for a range of measures to support the electric car market. In addition to the tax writedown, these may include government help to build a network of charging stations and more money for research and development — at a total cost of €3 billion, or $3.27 billion, by 2020 for all the new measures.

Government sources also told Handelsblatt that the government plans to extend a research program into hydrogen fuel cell technology that is due to run out in 2016. The federal government and industry have invested a total of €1.4 billion in testing fuel cell systems since 2006 and built 50 fuelling stations that enable a vehicle with a range of 500 kilometers to drive the length and breadth of Germany.

The number of stations is to be increased first to 400 and then to 1,000. “We’re in talks with industry,” said Deputy Transport Minister Rainer Bomba. “The technology is ripe for series production.” Fuel cell technology, he added, was a firm part of the government’s e-mobility concept.

Other nations are also struggling to lure buyers into electric cars. France, for example, is twice as ambitious as Germany, planning two million cars on the roads by 2020 under a “Pacte Automobile.” It currently has just 37,110 such cars licensed, according to Germany’s NPE platform. And sales have been falling.

Japan has some 88,500 electric cars and the United States 223,600. China is aiming for five million electric cars by 2020, up from 29,100 at present. But China’s e-car growth rate for the first half of 2014 was 113 percent.

Norway has been particularly active in subsidising e-cars and has reaped the rewards — at a considerable cost to its government budget. Every fifth new car licensed in Norway is an electric car, and for a time last year, U.S. electric carmaker Tesla even topped the ranking of all car sales with its Model S limousine.

Norway’s incentives included waiving both the 25 percent sales tax on electric cars as well as vehicle tax, and offering a 50 percent rebate on the country’s vehicle weight tax. Electric cars were allowed to use bus lanes and to park free of charge. As a result, the government achieved its target of having 50,000 electric cars — a high proportion in this country of 5.2 million people.

Now the government, stung by the cost of the subsidies totaling 4 billion krone last year (€350 to 470 million) for the tax relief alone, plans to reduce the incentives step-by-step from 2018 in what could become a test case for the long-term viability of the e-car market. Encouragingly, the Norwegian car sector does not expect a collapse in e-car demand.

Daniel Delhaes reports on politics, transport and airlines from Handelsblatt's Berlin office. To contact: [email protected].


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