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German industry demands subsidies for fossil fuel cars

  • May 31, 2020

Germany’s top industry body on Sunday called for sales subsidies on electric cars to be extended to fossil-fuel-powered vehicles.

Dieter Kempf, president of the Federation of German Industries (BDI), made the demand in the Welt am Sonntag newspaper.

Germany’s powerful-but-struggling carmakers have been calling for the expansion of the subsidies on electric cars, in a bid to shore up their positions during the coronavirus-induced economic crisis.

“In view of the crisis, it makes sense to introduce a further purchase bonus for at least 12 months in addition to the environmental premium, provided that this premium is part of a cross-sectoral approach,” Kempf said.

Kempf said the promotion is based on investment and climate protection. “It therefore makes perfect sense to also promote vehicles with modern and efficient combustion engines in this context, if this does not dilute existing incentives for electric mobility,” he said.

Rebates are currently available for the purchase of purely electric and hybrid cars.

Read more: As Dieselgate scandal widens, will Germany finally tackle transport emissions?

The automakers have been backed up in their demands by the states of Bavaria, Lower Saxony and Baden-Württemberg, where the manufacturers BMW, VW and Daimler are headquartered.

Bavarian State Premier Markus Söder told Welt: “It is unacceptable that France spends €8 billion on automobile promotion and we spend €9 billion on Lufthansa — but nothing for the heart of our economy. That would be an industrial policy mistake.”

“It’ll help protect the climate and the economy. We are taking old cars off the market and replacing them with the latest generation of clean vehicles,” he added.

Germany’s carmakers were responsible for the Dieselgate scandal, in which they deliberately colluded to conceal the illegal emissions of new diesel cars.

  • A rusted VW logo

    Dieselgate: A timeline

    The disaster unfolds — September 2015

    About two weeks after Volkswagen admitted behind closed doors to US environmental regulators that it had installed cheating software in some 11 million of its diesel vehicles worldwide, the Environmental Protection Agency shared that information with the public. It was September 18, 2015. The ensuing crisis would eventually take a few unexpected turns.

  • Former VW CEO Martin Winterkorn

    Dieselgate: A timeline

    The boss must go, long live the boss — September 2015

    Volkswagen’s then-CEO Martin Winterkorn (above) had little choice but to step down several days after news of the scandal broke. In September 2015, he tendered his resignation, but retained his other posts within the Volkswagen Group. Winterkorn’s successor was Matthias Müller. Until taking the reins at VW, Müller had been the chairman at Porsche, a VW subsidiary.

  • Raid at headquarters

    Dieselgate: A timeline

    Raiding headquarters — October 2015

    Regulators in the US weren’t the only ones investigating VW. Authorities in Lower Saxony, the German state in which VW is based, were also scrutinizing the company. On October 8 2015, state prosecutors raided VW’s headquarters along with several other corporate locations.

  • US flag in front of the VW sign

    Dieselgate: A timeline

    Hell breaks loose — January 2016

    On January 4, 2016, the US government filed a lawsuit against VW in Detroit, accusing the German automaker of fraud and violations of American climate protection regulations. The lawsuit sought up to $46 billion for violations of the Clean Air Act.

  • Former VW CEO Michael Horn for the US division

    Dieselgate: A timeline

    Quit or forced out? — March 2016

    In March 2016, the head of VW in the US, Michael Horn, resigned. In the initial days and weeks after the scandal broke, he was the one US authorities turned to for information. He issued an official apology on behalf of the automaker, asking for the public’s forgiveness.

  • Running on empty

    Dieselgate: A timeline

    Settlement — October 2016

    On October 25 2016, a US judge approved a final settlement that would have VW pay $15.3 billion. In addition, affected cars would be retrofitted with better, non-deceptive hardware and software, or else VW would buy them back completely from customers.

  • Emblem - VW Volkswagen und Porsche (picture-alliance/dpa/F. Kraufmann)

    Dieselgate: A timeline

    Imitators — July 2017

    When dieselgate first emerged in 2015, analysts said it was likely other car makers were also cheating tests. But it wasn’t until 2017 that other companies were targeted in probes. In July, German authorities launched investigations into luxury car makers Porsche and Daimler for allegedly cheating emissions tests. Others, such as Audi and Chrysler, have also been hit by similar allegations.

  • A man pumping gas

    Dieselgate: A timeline

    Public still supportive — December 2017

    Despite dieselgate, VW has managed to keep the emissions scandal from utterly tarnishing its image. According to several polls, between 55 to 67 percent of Germans continue to trust the automaker. In the US, polls show that roughly 50 percent still believe the German company produces worthwhile vehicles.

  • A caged monkey looks in the camera in a Münster laboratory

    Dieselgate: A timeline

    Fuming over monkeys — January 2018

    In late January, however, VW suffered another heavy blow over reports that the company experimented on monkeys and made the animals inhale diesel fumes. To make matters worse, a separate experiment that had humans inhale relatively harmless nitrogen dioxide was revealed at the same time. Some media wrongly interpreted this to mean humans were also inhaling toxic fumes.

  • Volkswagen cars being transfered (picture-alliance/dpa/R. Knipping)

    Dieselgate: A timeline

    Canadian court demands millions — January 2020

    Years after the scandal that caused Volkswagen to pay CAN$2.4 billion (US$1.83 billion), a court in Toronto order a further fine of CAN$196.5 million. Volkswagen pleaded guilty of violating in environmental laws. Prosecutor Tom Lemon noted that the fine was “26 times the highest fine ever for a Canadian environmental offence.”

    Author: Dirk Kaufmann, Elliot Douglas

Economic stimulus meeting

On Tuesday, the leaders of the ruling coalition will discuss an economic stimulus package which is intended to restore the German economy. According to the Bild newspaper, the package is expected to be worth between €75 and €80 billion.

Leaked agendas have revealed no plans for additional subsidies.

Carsten Linnemann, head of the pro-business wing in Angela Merkel’s CDU and sister party CSU, said that if the call was successful it would be “a prime example of how a lobby asserts itself in Germany.”

Ralph Brinkhaus, parliamentary group leader of the CDU/CSU, said he also opposed it — but that the pressure from companies, unions and state premiers was substantial.

The German Council of Economic Experts, among others, has spoken out against the new subsidies.

aw/sri (AFP, dpa)

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