Automotive News Europe — 2025-04-10
Automotive Industry
Germany’s new government pledged support for its car industry while also supporting the conversion of available plants for defense, a document on the coalition agreement reached by the country’s conservatives and Social Democrats and seen by Reuters showed.
The parties plan to provide purchase incentives for electric cars, including plug-in hybrids and cars fitted with range extenders to boost an EV’s battery, and promise tax discounts for company cars including an exemption from vehicle tax for electric cars to last until 2035.
The new government will also examine whether it can support converting and upgrading surplus car plants for use by the defense industry, as defense companies seek more capacity amid a Europe-wide push to ramp up production of military equipment in the face of waning support from the U.S.
“The defense industry needs to grow very quickly and in a scalable manner,” the document said.
Rheinmetall, Europe’s top ammunition maker, is looking at whether to take over VW’s factory in Osnabrück to make defense equipment.
VW is ending production of the VW T-Roc Cabriolet, Porsche Cayman and Porsche Boxster at the plant and said in December said it was exploring alternative scenarios for the site’s future use.
Rheinmetall is considering a joint venture with truck maker MAN, which is owned by VW Group, to produce bulletproof driver’s cabs for trucks in Osnabrück, Automotive News Europe sister publication Automobilwoche reported.
Help on emissions fines
The government will also make an “active effort” to ward off emissions fines, the document said.
The EU — with German backing — previously loosened emissions targets when automakers said the looming fines would take money away from their transition to electrification.
It will also provide support for filling stations for new hydrogen-powered commercial vehicles, it said, without providing details.