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Government's Electronic Car blueprint stirs controversy among automotive sector
The federal government's proposed tax deductions for electric vehicles (EVs) have sparked debate within the auto industry. Hildegard Müller, president of the VDA (Association of the German Automotive Industry), sees the plan as beneficial for the market ramp-up. However, there's skepticism about its impact, as the plan is criticized for being too limited, focusing solely on businesses and excluding households and leasing companies.
UBS analyst Patrick Hummel believes the deduction could boost the demand for EVs in the fleet business. German manufacturers, who dominate the commercial market, are expected to reap the benefits most. Yet, Thomas Peckruhn, acting president of the Central Association of the German Automotive Industry (ZDK), deems the tax plan a first step, not a groundbreaking improvement.
Crucial for the electromobility drive are cheaper charging prices and transparent charging tariffs. Jürgen Resch, managing director of the German Environmental Aid (DUH), points out that higher tax deductions may lead to lower trade taxes for municipalities, but incentives for smaller cars, like in France, are absent.
The draft bill from the Finance Ministry reveals plans to allow businesses to write off 75% of the cost of a new EV in the year of purchase, compared to the current linear six-year write-off. Additionally, the gross list price limits for company cars are set to increase from 70,000 to 100,000 euros, benefiting high-end car manufacturers.
While these plans are part of an economic strategy, they are seen as insufficient by the auto industry. Calls for expanded eligibility, infrastructure development, R&D support, public awareness campaigns, and long-term commitment intensify. The question remains whether these additional measures are forthcoming to secure a significant impact on promoting electromobility.
The Bottom Line
The tax deductions for EVs might just be the start of a larger push towards electromobility. However, the industry acknowledges that broadened eligibility, infrastructure investment, R&D support, public education, and a long-term policy are essential for substantial progress. Only then will Germany truly see a mass adoption of electric cars.
- To further support the push for electromobility, the community could advocate for a policy that includes expanded eligibility for tax deductions, infrastructure development, research and development funding, public awareness campaigns, and a long-term commitment.
- As the focus on electric vehicles grows, vocational training programs in technology and automotive industries might be essential to equip the workforce with the necessary skills for the production, maintenance, and management of EVs.
