Money for nothing and EVs for free: German incentives target clean mobility

Germany's incentives for the auto industry is mostly all about promoting electric vehicles with very little, if anything at all, for cars with conventional engines.
By : HT Auto Desk
| Written By : Shubhodeep Chakravarty
| Updated on: 20 Jul 2020, 10:50 AM
File photo used for representational purpose.
File photo used for representational purpose.
File photo used for representational purpose.
File photo used for representational purpose.

Germany is one of the largest car manufacturers and markets in the world with several home-grown brands as well as foreign players competing in a market that was quite lucrative before Covid-19 pandemic sprung up its threatening head. With a clear and present danger to the global automotive industry, the German auto sector was hardly immune and this prompted the government here to come out with a slew of incentives to help out. An overwhelming majority of these incentives, however, were targeted towards electric vehicles (EVs) and some have even made certain cars nearly free.

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EV makers in Germany are saying 'Prost' as the demand for their products rise despite the prevailing scenario and Renault, for instance, is taking the biggest swig. The aggressive nature of incentives are such that a five-door Renault Zoe can be leased for next to nothing, according to Bloomberg. Inquiries for the Zoe have seen a meteoric rise over the course of the past few weeks and dealerships are struggling to respond even if most of the visits are through virtual channels.

Many other EV products in the country are also benefiting from the incentives on offer with prospective customers keen on driving out while the proverbial sun still shines.

Germany is pushing forward to make EVs more popular.
Germany is pushing forward to make EVs more popular.
Germany is pushing forward to make EVs more popular.
Germany is pushing forward to make EVs more popular.

Neighbouring France has also come up with a slew of incentives and measure to help the auto sector in the country wade through tumultuous times. But experts point out that while France's measures are more encompassing, the German measures are overwhelmingly favouring EVs.

France is determined to make EV adoption easy.
France is determined to make EV adoption easy.
France is determined to make EV adoption easy.
France is determined to make EV adoption easy.

What does this mean for cars running on conventional fuels and for those who only manufacture these?

It is a rebuff. For sure.

Germany's 130 billion euros coronavirus stimulus plan has had very little for cars running on petrol or diesel and there is no incentive for purchasing such vehicles. Reuters recently reported that while EVs only accounted for 1.8% of all new car registrations in the country in 2019, the number will spike and could spike at the cost of conventional cars.

Germany's stimulus package is also being seen as a snub to the auto gasoline lobby. Clean up with EVs or clean out is perhaps the message being sent out. At a time when conventional SUVs face significantly higher tax structure, the need to go electric - especially for German giants Mercedes, BMW and Audi - is more pressing than ever before.

First Published Date: 20 Jul 2020, 10:50 AM IST
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