Angela Merkel laid out a bold ambition on Monday: increasing the number of electric cars in Germany from just a handful to a million in less than a decade. Not only would such a feat give the country's green credentials a major boost, but -- perhaps more importantly in the eyes of the chancellor -- it would also help Germany's vital car industry grab a slice of the growing market for itself.
The German government will double its funding to provide €2 billion ($2.83 billion) by 2013 as part of plans to increase the number of electric cars on the streets from barely 20,000 today to a million by 2020 -- and maybe even six million by 2030. Merkel told a press conference that Germany must be a "market leader" in the new technology.
But she has ruled out subsidising sales of electric cars, which still retail for a significantly higher price than conventional cars. "A premium to buy isn't the right answer," the chancellor said.
There will, however, be other incentives to promote the development and use low-emissions vehicles. Cars emitting less than 50 grams of carbon dioxide per kilometer will be exempt from the road tax for ten years, and electric cars will be granted access to bus lanes and some free parking. Taxes on company vehicles will be reformed to encourage using electric cars, and the government itself plans to power 10 percent of its vehicles with electricity.
While many in Germany are applauding the environmentally friendly scheme, others are more concerned about how it will help the country's giant carmakers. The industry in Germany has fallen behind in developing these new technologies, as firms from emerging markets like China lead the way. But car manufacturing makes up such a large and vital slice of the German economy that companies like Volkswagen, BMW and Daimler must keep up with their foreign rivals.
Merkel herself admitted that that it would "not be easy" for Germany to become a market leader in electric car technology. And Willi Diez, head of the Automobile Marketing Research Institute, told the Handelsblatt: "We must make sure that expertise remains based in Germany."
With such a large injection of federal money being handed to the car industry, reaction in the German press Tuesday was predictably mixed, with some looking forward to a green, technologically advanced future while others wondered whether the cash was being well spent.
The center-left Sueddeutsche Zeitung writes:
"It is crucial for the electric car that competition ensues within the industry and between engineers, and that the new vehicles which emerge at the end really are better than others, especially those based on the internal combustion engine. Much speaks for that at present, not least the fact that car manufacturers in the Far East look set to make inroads into European markets with battery-powered cars."
"The electric car also changes the car market itself: If complicated combustion technology is no longer needed, but rather just four wheels, a chassis, an electric motor and batteries, the electric car can fit into the business models of newcomers. Daimler, VW, BMW -- they are increasingly coming into competition with companies no one has heard of. This is good for business. High fuel prices will add to this: because the cheaper the development of electric power technology is, the less significant the high initial outlay costs become. And because the most expensive part of that is always going to be the batteries, it is not a bad idea to advocate that particular area of research. Medical services, postal workers, commuters -- there might well be enough prospective customers for the new cars, even without subsidies."
"If the electric car is as good as its reputation, it will prevail."
The mass-circulation tabloid daily Bild writes:
"The vision of a greener Germany has come late, but not too late. The auto industry is still more focused on high-powered sports cars than environmentally-friendly runabouts. To change that, intelligent incentives are needed -- exactly what the government is proposing. If the vision becomes reality, it can only be good for Germany. Our auto industry is as always the measure of things in the world as well as the engine for our export success."
"Electric cars 'Made in Germany' will permanently secure our jobs and our reputation as technology leader."
The left-wing Tagezeitung writes:
"(The auto industry) is the same industry that already bagged five billion through car-scrapping incentives, and is now holding out its hand once again. The same industry which has made record profits through its fossil-fuelled products at the expense of the environment. Now they want to further line their pockets with the switch to electric mobility. An unabashed rip-off that the Greens are also a part of."
"Where are the clever, small, new electric cars that the state should be subsidizing? ... So far not a single proper German electric car has been developed. Models currently on the market are just conversions; petrol-powered cars which have been altered to take a makeshift battery."
"And who is talking about the need for electric bikes, electric buses, electric scooters? Where are the new environmentally-friendly intermodal mobility concepts, which make sense alongside the electric car? There is a worrying perception that gasoline must be replaced with electricity, and everything will stay the same. At least, if the state pays for this madness."