Germany’s new ‘traffic light’ coalition government is planning a dramatic upsurge in electrified motoring together with greener industrial policies, putting a question mark over some 880,000 jobs and the future of its world-leading car makers and global tier-one suppliers – but also promising a radical reshaping of an industry at the heart of Europe’s car-making skills.
The battle around electrification, synthetic fuels and the pivot in Germany’s powerhouse assembly plants and supply chain to BEVs has already split the outgoing Merkel government from some sectors of the German auto industry – a trend that might continue since new transport, energy and industry ministers were appointed by the Coalition in early December.
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Significantly, The Greens have been allocated the key economy and climate change department, under Robert Habeck. Best known for his gloomy environmental speeches, he will wield new powers to co-ordinate climate, energy and economy policy.
Germany has already made solid progress towards electrification in its automotive industry, with electrified cars approaching 675,000 sales in 2021, for 24% of the market.
The question now is how much faster and farther progress can be accelerated by the new government.
According to automotive industry analyst Matthias Schmidt, the car industry can at least expect a more intensive push towards EVs, possibly at the expense of plug-in hybrids.
“The traffic light coalition government is going to be a potentially major catalyst for the acceleration of the battery electric market in Germany,” he said.
In his latest report, the German says combined sales of plug-in cars – BEVs and PHEVs - are already on a climb towards 675,000 units combined. But based on the coalition's manifesto, which promises 15 million BEVs on German roads by 2030, sales of BEVs will have to speed up dramatically from today’s 350,000 units.
“We won’t see a straight-line increase,” said Schmidt, “but a gradual volume increase up to 2025 and then a large push from that point onwards.”
In practice, Germans will have to be cajoled and incentivised to buy two million or more BEVs per year. That’s two-thirds of three milion annual new car sales, whereas currently they make up 15%.
So far, there has been no detail from the coalition on how many euros it's prepared to commit to incentives to help this transition or where any money will come from.