Before the "Car Summit": Comeback of the Scrappage Premium? Subsidy packages and relief from CO2 regulations demanded

Whether it's a scrappage bonus, a new e-car bonus, or less stringent CO2 regulations - ahead of the "auto summit" planned for Monday by Economic Affairs Minister Robert Habeck, there is no shortage of demands to support the struggling German auto industry. The meeting with top representatives from manufacturers, suppliers, and industry groups will also discuss measures to boost the sluggish sales of electric cars. Habeck (Greens) recently hinted at further support measures.

The SPD is pushing for immediate action, including a new "scrappage bonus 2.0". According to a paper available to the German Press Agency from SPD economic policymakers, those who scrap their combustion engine vehicles and buy a new electric car should receive a bonus of 6,000 euros. For the purchase of a used electric car, there should be 3,000 euros. The magazine "stern" had previously reported on this.

Other proposals include a government subsidy for e-car leasing for people with low to medium incomes and support for private charging boxes, storage, and charging stations. According to industry expert Ferdinand Dudenhöffer, these proposals are likely to have a very short lifespan for budgetary reasons. During the economic crisis in 2009, Germany already promoted car exchanges with a bonus. Those who scrapped their old car and bought a new one received an environmental bonus of 2,500 euros. Many referred to it as a "scrappage bonus".

Union: Loosen pollutant regulations

"The scrappage bonus at the time did nothing for car demand except create a short-term boost," criticized CDU/CSU parliamentary vice-president Ulrich Lange. "But it also caused chaos in processing and abuse." Given the focus on electric cars, Lange advocated for technology neutrality. Additionally, there should be financial relief and easings of European pollutant limits for cars.

The chairman of the European People's Party, Manfred Weber, also aims in this direction. He wants to suspend impending fines for carmakers under the planned stricter fleet requirements for CO2 emissions. "When tens of thousands of jobs are at risk, there's no time for fines," he told the "Augsburger Allgemeine".

Mercedes CEO Ola Källenius is calling for political concessions. "We need to talk about CO2 regulation in Europe," he told the "Handelsblatt". While Mercedes remains committed to the goal of decarbonizing the auto industry, the EU Commission's estimate was overly optimistic, as it turns out: "We cannot ignore customer preferences." The EU aims to tighten "fleet targets" for the emission of climate-damaging carbon dioxide (CO2). Manufacturers face fines if too much CO2 is emitted.
 

IG Metall Calls for New Funding Package 

The union IG Metall believes a new funding package for electromobility is necessary. "The funding package must help accelerate the ramp-up of e-mobility," said a union spokesperson for the Funke Media Group. The special depreciation announced by the federal government for commercially acquired emission-free vehicles is a sensible first step. The federal government surprisingly abolished the e-car subsidy for all consumers about a year ago.

The German Economic Institute (IW) considers a new e-car subsidy to be sensible. "A noticeable benefit will only be achieved if it succeeds in expanding the potential buyer group," said IW expert Thomas Puls. The utility of e-cars must be increased for people who do not have their own charging facility. 

"The automotive summit must not become a subsidy summit, but must take into account the fundamental location conditions of the German industry," warned FDP parliamentary deputy Lukas Köhler. "The attempt to solve the problems of individual companies with tax money is doomed to fail, as no sustainably successful business model can be built on subsidies." Lower taxes, less bureaucracy and the shortage of skilled workers must be at the top of the agenda. 

Baden-Württemberg's Transport Minister Winfried Hermann (Greens) calls for long-term measures: subsidies for fossil fuel transport must decrease and permanently flow into support for climate-friendly mobility. Manufacturers are also in demand. Smaller and more affordable cars are urgently needed: "There simply aren't enough on the market."