Questionable traffic light decision: The end of electric car funding? A mindless emergency stop!

In Emsland they had insight: the district opened its registration office in Meppen on Advent Sunday at short notice so that buyers of electric cars could register their cars in time.

Questionable traffic light decision: The end of electric car funding? A mindless emergency stop!

In Emsland they had insight: the district opened its registration office in Meppen on Advent Sunday at short notice so that buyers of electric cars could register their cars in time. At least 24 car owners made it through the two-hour special opening and were the very last people in Germany to secure a government bonus for their new climate-friendly vehicle. A good 100,000 euros will flow from the federal treasury to Emsland before the government's wishes seal the subsidy pot forever without a working day's warning. In any case, you arrive at this amount if you take the maximum funding amount of 4,500 euros per car as a basis. And if the 24 also managed to click through the procedure at the federal authority Bafa in the late afternoon or evening. Because from midnight there was an orange warning sign that funding had closed. Finally.

In all other districts, the following applies to those who, despite political appeals, despite advertising from the industry, which has finally responded to political pressure and new CO2 limits, despite an increasingly urgent climate crisis, have not decided on a modern electric car against all apparent common sense . Probably those who stubbornly chose an outdated diesel - or decided to simply continue driving the old stinker instead of moving away from fossil fuels. They are rewarded by the state. Despite all austerity constraints, diesel fuel continues to be generously subsidized by taxpayers. At around 1.5 billion euros per year, although the increased vehicle tax for diesel cars has already been deducted. (For comparison: 1.3 billion euros were planned for 2024 for the electric car subsidy, which has now been stopped). Likewise, government support for company cars and car commuters continues, even if both are mostly bad for the future of our planet.

What is also confusing about the abrupt measure at the weekend is that those responsible, Finance Minister Christian Lindner, Economics Minister Robert Habeck and Chancellor Olaf Scholz, had actually promised something else shortly before when they agreed on their austerity program, with which they were able to do so despite the ruling from Karlsruhe Want to comply with the debt brake. Government politicians have promised that climate-damaging subsidies would now be eliminated. There are many of these climate-damaging subsidies, the Federal Environment Agency recently came to a total of over 65 billion euros per year, only at the federal level, and diesel subsidies are high on the list. But the vast majority of these subsidies, like the diesel subsidy, can remain, even if savings have to be made. Instead, savings are being made on the future of electric vehicles (the federal government no longer provides anything for cargo bikes either, although the amount is of little importance).

The impact of the emergency braking from Berlin will be fatal. It is true that the global triumph of the electric car can hardly be stopped, even if the German market is now being arbitrarily thwarted politically. The car manufacturers' investments in new technology are too bold, the technological advances in the new electric vehicles are too convincing, and the strict limits for CO2 emissions in the crucial markets of China, the EU and the USA are too clear. And the car manufacturers in China and the USA, which are heavily supported by the state and are determined to use the electrification of driving to their advantage on global markets, are too ambitious.

What is also interesting is the reason that is repeatedly put forward in politics as to why - for example - the diesel subsidy could not be eliminated, even if this is repeatedly suggested by the car industry: one should not offend diesel buyers who trust in them invested or would have invested cheap diesel in such a vehicle. This argument was most recently put forward by Lower Saxony's Prime Minister Stephan Weil in the stern interview. The result of the latest assessment from Berlin is that – apparently – the trust of diesel buyers must not be violated. However, it is certainly possible to violate the trust of those people who have decided in favor of the electromobile future, perhaps out of concern for the climate, perhaps because of the pleasant driving, perhaps also because of the subsidies.

Because these people have had a real roller coaster ride. People who were thinking about owning an electric vehicle at the beginning of 2023 often found out from dealers that they would have to make a decision quickly; the industry would soon no longer be able to guarantee delivery times before the end of the year. But a reduced subsidy was promised – originally – for 2024, no longer 4,500, but 3,000 euros. In the autumn the market turned around, manufacturers and retailers had often miscalculated and suddenly had cars on offer again that they had promised to deliver shortly before the end of the year - and which now often could no longer be registered in time. (The only ones who are lucky are those who have ordered an electric vehicle from the Stellantis Group, i.e. an Opel, Jeep, Citroen, Peugeot or Fiat; the manufacturer promised yesterday to cover the missed bonus).

Well, Scholz, Lindner and Habeck may have said to themselves that they accept the disappointment of those receiving subsidies. After all, almost every subsidy causes resentment when it is removed, even if the subsidy was questionable - this can now also be observed among the protesting farmers. But the issue of electric car subsidies is not just about the credibility of politics among a few Tesla or VW ID buzz enthusiasts. Rather, the entire cosmos surrounding the car business is in question - manufacturer companies, suppliers, retailers.

The switch from combustion engines to electric has been a politically propagated and necessary climate policy goal for more than ten years. The industry has been hesitant to embrace this goal for far too long. Politicians have - rightly - promised to ensure a planned transition, because such a conversion is difficult to achieve with market forces alone and is likely to cost many more jobs than with a plan. Finally, the renovation finally gained momentum. Manufacturers and import suppliers provided suitable vehicles and capacities were created, not only in car manufacturing but also around it. One example is the battery cell factories - some of which are supported with generous federal subsidies - and are intended to ensure that the essential added value in the car business can continue to occur in Germany in the future. Customers, manufacturers, workers and investors should be able to plan for the combustion engine to slowly be phased out and the electric car to gain momentum, also thanks to government support. In this respect, it was tolerable that the traffic light coalition announced after its start in 2021 that the electric car subsidy introduced by the Groko would be reduced from autumn 2023 and phased out completely at the end of 2024. It seemed risky, but conceivable that by then the transition would be so developed that it could be done on our own.

But now Scholz and Co. have decided against all reason to abruptly slow down this development. The fact that at the same time they want to continue to strongly promote climate-damaging systems, especially in the mobility sector, makes the whole thing a deplorable scandal. The government is making it difficult for its domestic auto industry to make the transition in its home market. This indirectly gives non-German manufacturers a competitive advantage. Anyone who knows anything about cars knows that such an emergency stop costs an enormous amount of energy - in this case for surprisingly little return. Meanwhile, others are pushing hard on the power pedal.

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