Germany’s grand coalition returns and seeks to push e-mobility

8 February 2018

Following the collapse of coalition talks with the smaller Free Liberal Democrats (FDP) and Green Party, Germany’s leading Christian Democratic Union (CDU) party has reached a coalition agreement with the Social Democratic Party (SPD). This is despite the SPD initially deciding after the country’s elections in September that it would rather go into opposition than renew the ′grand coalition.’ The key policy implications of the coalition treaty for the automotive sector are increased incentives for electric taxis and light commercial vehicles, expansion of the charging network and reduced taxation for electric company cars.

Extracts from the coalition treaty, published in full on the CDU website (in German) and detailed by Clean Energy Wire (in English), are as follows:

′We want to promote the conversion of the vehicle fleets of authorities, taxi companies, tradespeople and public transport to low-emission or zero-emission propulsion technologies by upgrading the subsidy program.’

′We will intensify the roll-out of a nationwide charging and refuelling infrastructure. The target is to make at least an additional 100,000 charging points available by 2020, of which at least a third should be fast charging stations (DC). In addition, we want to support the construction of private charging stations. We will legally facilitate the installation of charging points for electric vehicles of tenants and apartment owners. In addition, we will improve the legal conditions for user-friendly payment systems.’

′We will introduce a reduced tax rate for company electric cars and hybrids of 0.5 percent of the domestic list price. For commercially used electric vehicles, we will introduce a deduction regime and extend support for car-sharing and the retrofitting or purchase of electric taxis, buses, trucks, and car-sharing.’

′We want to avoid driving bans and increase air quality and use the ′Sustainable Mobility for the City’ fund to support mobility plans aimed at reducing pollution.’

The latter point will come as a relief to many industry players and local governments which have opposed driving bans. However, this also increases the likelihood of the expensive retrofitting of hardware in diesel cars, although this is actually supported by some industry associations and, understandably, many automotive suppliers.

VDA President Matthias Wissmann said in a statement issued on 7 February; ′It is right that the coalition agreement follows the principle of technology neutrality. Quotas and technology bans lead the economic, social and climate policies into a dead end. Also positive, because of the future, is that the necessary investments in infrastructure and in key technologies such as electro-mobility and automated and connected driving should be high on the agenda in the coming legislative period. We agree with the coalition partners that inner city diesel driving bans should absolutely be avoided.’

Numerous other reactions to the coalition agreement can be found here.