"Don't emulate France in terms of purchase premiums!"
France has opted for purchase premiums for cars. However, the VDMA president warns against the erroneous path of a subsidy race among the EU states.
Commenting on the debate about supporting individual industries in the crisis, VDMA President Carl Martin Welcker said
"France has opted for purchase premiums for cars. Now voices are being raised that German car manufacturers should not be disadvantaged here. I warn against a subsidy race among the EU states. Electric cars lack technical and economic competitiveness, state infrastructure and last but not least climate-friendly electricity - at least in Germany. Purchase premiums for cars and comparable individual subsidies have a selective effect, discriminate against other products and generate deadweight effects. Ultimately, the problem of car sales, which were already weak before the Corona crisis, is not the price, but rather the political and regulatory uncertainty about individual car ownership. As long as the EU, federal, state and local authorities change emission limits almost at will, issue driving bans and destroy parking spaces, one should not be surprised if cars do not find buyers.
"Ultimately, the problem of car sales, which were already weak before the Corona crisis, is not the price, but the political and regulatory uncertainty regarding individual automobile locomotion.
We are convinced that public funds can be used in a technology-neutral and more sustainable way and thus achieve a far greater effect than with purchase premiums. Clever promotion starts at the beginning of the value chain, i.e. in research and development. And it should cover the entire industry, for example by extending loss carry-back and general declining-balance depreciation or by introducing tax incentives for research aimed at investing in the future. The demand side would be better served by a reduction in taxes and duties. Straw fires burn quickly. Better policies with less taxpayers' money is called for."