Volkswagen welcomes German government's scheme to support low-emission cars

Volkswagen on Wednesday said the German government's 3 billion euro ($3.57 billion) scheme to support low-emission cars sent a strong signal Berlin would help lift the country's key export industry out of the coronavirus and climate crises.

Germany on Tuesday earmarked fresh cash to help the industry, which is facing tough competition from Chinese and US rivals in electric mobility, to overcome a collapse in demand caused by the coronavirus.

A central element of the scheme is the allocation of 1 billion euros to extend to 2025 a consumer rebate for buying electric cars that had been due to end next year.

"The extension of the innovation rebate for passenger cars will further accelerate the ramp-up of electric mobility and thus drive the change to sustainable mobility," the world's largest carmaker said in a statement.

File photo used for representational purpose (Bloomberg)

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File photo used for representational purpose (Bloomberg)

"At the same time, by rapidly expanding charging infrastructures, the German government is creating the necessary trust among customers for an easy and smooth transition to e-mobility," it added.

A further billion euros will be used for a scrappage scheme for older trucks to help logistics companies and municipalities modernise their fleets while another 1 billion euro fund will finance innovation.

Stephan Weil, premier of the state of Lower Saxony where Volkswagen is based, said transformation and digitisation processes urgently needed a boost.

"The faster a nationwide charging network is created and supplied by renewable energies, the more customers will choose electric vehicles," said Weil, who is a supervisory board member at Volkswagen.

Charging spots for electric vehicles in Germany have been rolled out quickly this year, with the burden to expand largely being placed on utilities, but many spots are underused as only 240,000 fully electric cars are on the road, according to energy group BDEW.

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