Germany examines further options for supporting troubled car industry

Automotive Industry

Source: Clean Energy Wire, 2020-09-09

The German government is examining additional options for supporting the country's car industry amid the twin challenges of a COVID-19 related drop in sales and the technological transformation away from fossil fuel-powered engines. Following a "summit" with car industry representatives on 8 September, the government said it would assess "if and how a market-based concept for strengthening equity, particularly that of supplier companies, can be developed." In order to retain Germany's position as a global leader in automotive technology, a co-ordinated effort is needed that enables the mass introduction of e-mobility, autonomous driving and mobility data collection, the government said. To this end, a uniform payment system for e-car charging and a further expansion of charging infrastructure will be debated at another meeting between government ministers and representatives of the car and energy industries.

The government said it would also increase its efforts to unlock the potential of "alternative fuels", such as biofuels or green hydrogen produced with renewables, which could be used to reduce CO2 emissions of all means of transportation. The car summit did not result in a change to the government's exclusion of combustion engines from the buyer's premium for new vehicles, as part of the country's coronavirus recovery package, which the government coalition party CSU had vehemently advocated. The CSU's coalition partners, its sister party CDU and the Social Democrats (SPD), did not budge on the rule that has been seen as a game-changer in Germany's industrial policy.

Calls for supporting Germany's embattled car industry with public money had already grown before the summit, with representatives of the SPD, the Green Party and labour union IG Metall mulling an investment fund partly filled by the state to help the industry which directly employs about 800,000 people in the country. A recent analysis by economic research institute IW found that the car industry is at risk of losing its key influence on the German economy, as technological transformation and stiff international competition could put tens of thousands of jobs into question in the next years.

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