Germany to quicken pace of switch to electrification
GERMANY’S NEW ‘TRAFFIC light’ coalition government is planning a dramatic upsurge in electrified motoring together with greener industrial policies. The shift puts a question mark over 880,000 jobs and the future of its world-leading car makers and global tierone suppliers, but it also promises a radical reshaping of an industry at the heart of Europe’s car-making skills.
The battle around electrification and the pivot in Germany’s powerhouse assembly plants and supply chain to batteryelectric cars has already split the outgoing Merkel government from some sectors of the German automotive industry. That trend may continue since new transport, energy and industry ministers were appointed by the coalition in early December.
Significantly, the Greens have been allocated the key economy and climate change department, under Robert Habeck, who will coordinate climate, energy and economy policy.
Germany has, of course, already made solid progress towards electrification in its automotive industry, with electrified cars approaching 24% of the market this year.
Automotive environment analyst Matthias Schmidt says the car industry can at least expect a more intensive push towards BEVS. “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, Schmidt says the combined sales of plug-ins – BEVS and PHEVS – are already on a climb towards 675,000 units, but based on the 177-page coalition 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 straightline increase,” said Schmidt, “but a gradual volume increase up to 2025 and a large push from that point on.”
So far, there has been no detail from the coalition on how many euros it is prepared to commit to incentives to help this transition.
Explicit in the coalition plan is an earlier introduction of the ban on combustion engine sales, a couple of years ahead of the EU’S 2035 deadline. So far, Germany’s car industry leaders have remained largely silent, with the exception of Volkswagen boss Herbert Diess.
Diess made his move early, going viral on social media with a 10-point plan (see below) for the coalition, majoring on accelerating the transition to electrification.
Neither BMW nor Mercedes has gone public like VW while the coalition is formulating policy, but given that Germany is the European economy with the biggest automotive industry workforce – 880,000 and nearly four times the size of the next biggest, France – the risk to the German economy is significant.
Continental, for example, has previously warned that an over-enthusiastic switch to electrification will threaten jobs and Bosch has 15,000 workers in Germany alone dedicated to diesel component manufacture.
The counter argument says a decisive and rapid switch will pay back with a more competitive industry leading the global transition.