The German government is promising a relief package for the automotive industry. It includes a new bonus for electric cars and plug-in hybrids, as well as tax-free company cars until 2035.
The German car industry is experiencing economic challenges. Several manufacturers are reporting problems. The German government is now proposing an auto package with a new bonus to support sales, especially of electric cars and plug-in hybrids.
This is reported by Automotive News Europe .
The newspaper claims to have seen documents in which the new German government discusses the plans. The government's proposal aims to provide the industry with the necessary support. It comes at a time of pressure on the economy.
A central part of the plan is a new type of bonus scheme. It will apply to selected vehicles. Support is planned for electric cars specifically.
The plan also includes plug-in hybrids. Even cars with combustion engines and range extenders are mentioned as possible recipients of bonuses.
Another point in the proposal is company cars. The government wants to make company cars tax-free. This will apply until 2035.
Details of the German aid package
The government is also proposing something more controversial: the state may have to cover any losses incurred by the automotive industry.
There will be fines for not complying with new emissions requirements. The stricter requirements will come into effect on January 1, 2025. A significant proposal in every way, if Germany sticks to it.
The proposal must be seen in light of the industry's economic situation. Many car brands have invested enormous sums in electrification, but without the market being able to keep up.
In fact, the latest figures show that just 1.8 percent of all cars across Europe run on electricity alone. And if we include hybrid cars, electrification cannot drag itself above 3.9 percent.
The new EU emission requirements are putting additional pressure on manufacturers. Complying with them requires major changes in production and technology.
The government is exploring several options to help. The measures range from direct bonuses to relief.
Conversion of car factories to defense
Another proposal goes in a completely different direction. The government will investigate the possibility of converting car factories.
Excess factories could be used in the defense industry. It would require government support to convert production. Some of the companies in the defense industry have already sought the possibility.
Among other things, Germany's largest arms manufacturer has floated the idea of taking over one of the three car factories within the country's borders that Volkswagen will divest from by 2030.
The background is changes in the geopolitical situation. The US has signaled reduced military support to Europe. Just as Trump has repeatedly threatened to withdraw the US from NATO.
Therefore, both the governments and defense companies of European countries are busy rearming on their own.
The arms manufacturer Rheinmetall, which is considering taking over Volkswagen's factory in Osnabrück, is directly mentioned in the documents to which Automotive News Europe refers.
Rheinmetall will use the factory to make defense equipment. The company is planning a collaboration with truck manufacturer MAN. Together, they will produce bulletproof vehicles in Osnabrück. This shows a possible new future for parts of the automotive industry.
The German government's plans are still in the proposal stage. So whether it will all come to fruition is still too early to say. But a ceiling is a ceiling, I guess.
At Boosted.dk, we continuously follow developments in the entire automotive industry. Even when things are going badly and large-scale cost-cutting plans are announced.
Skoda, for example, was upset that we – and several other media outlets – reported on the story of 8,000 layoffs, which the brand is nevertheless going through. Read more about it here .
