Car summit on the VW crisis – No decisions on the new scrappage bonus for the time being
The crisis at the Volkswagen Group has led to the convening of a car summit between the car industry and politicians to discuss ways to support the German car industry. We give you an overview of possible political decisions.
The crisis in the automotive industry in Germany is now leading to political reactions. Federal Minister of Economics Robert Habeck (Greens) and the automotive industry will meet on September 23 for the car summit to discuss how to proceed. There are calls for direct state subsidies, as well as the suspension or reduction of CO2 targets for car manufacturers.
- Sales crisis of German car manufacturers leads to car summit with politicians
- Demands for scrapping bonus 2.0 and other state aid
- Concern about job cuts in the workforce
- Falling sales of e-cars to be combated
- Consultations will continue, initially no results on September 23
The suspension of the environmental bonus at the end of 2023 had triggered a slump in e-car registrations in Germany. The currently decided e-car subsidy is only for businesses and so far excludes private customers. Here is our overview of the car summit.
Demands for state aid
The call for state aid is heard mainly from industry, trade unions and parts of politics. Volkswagen, for example, is demanding an environmental bonus of a total of 6,000 euros. Of this, 4,000 is to come from the state, while the manufacturer contributes 2,000 euros. Mercedes, on the other hand, is calling for a relaxation of the CO2 requirements for new car fleets. This is intended to avoid paying billions in fines despite the lack of sales of e-cars. The SPD is in favor of a new edition of the scrapping premium. The purchase of a new e-car is to be rewarded with up to 6,000 euros, and a bonus of 3,000 euros is also to be paid out for the purchase of a used e-car. The Greens also raised the possibility of cancelling subsidies for combustion cars, with the funds for this instead to be used to promote electric mobility. At the same time, however, the Minister of Transport of Baden-Württemberg also sees the manufacturers as having a duty to bring smaller and more affordable e-cars to the market.
The workforce at the VW plants, which is threatened with job cuts, is also in favor of state aid. IG Metall is calling for a package for e-mobility to support the demand for e-cars in general and sees the scrapping bonus as a suitable measure for this. The environmental association Greenpeace also considers a subsidy to be useful, but wants to limit it to small, economical e-cars under 30,000 euros.
Other proposals outside the vehicle purchase also provide for subsidies for e-car leasing or charging stations.
Concerns about government subsidies
But not everyone involved agrees on state intervention. For example, the CDU/CSU and the FDP warn against a collective premium for the purchase of e-cars. The Union warned that a new environmental bonus would only be a flash in the pan, instead it would be better to rethink and weaken the CO2 fleet values. The suspension of fines is also a possibility. Although the FDP also doubts the benefits of state subsidies, it sees the need for political action above all in the economic conditions in Germany. Instead, taxes must be lowered, bureaucracy must be reduced and the shortage of skilled workers must be tackled.
Economists also emphasise that an e-car premium makes sense, but should not be the only measure. Thomas Puls, an expert at the German Economic Institute, emphasized that there would only be a noticeable impact if more potential buyers for e-cars could be won.
No results for the time being – consultations will continue
The summit ended on the evening of September 23 without a result for the time being. Federal Minister of Economics Robert Habeck said after the digital conference that although various measures had been discussed, no concrete results had yet been decided. However, he wants to work to ensure that the CO2 limits set by the EU are reviewed earlier than planned. It is originally scheduled for 2026, but the automotive industry prefers to bring it forward to 2025. Although no decisions have been made, they will continue to consult to solve the current crisis.
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