EurActiv — 2023-09-06
Automotive Industry
Faced with growing environmental criticism, German Chancellor Olaf Scholz defended individual mobility as a great social achievement and called upon carmakers to make electric vehicles available for all.
The German car industry is under pressure, with energy prices and foreign policies putting into question European production locations, Chinese carmakers gaining ground on electric vehicles, and environmental regulations increasingly starting to bite.
However, when opening the annual automotive industry conference IAA, German Chancellor Olaf Scholz (SPD/S&D) painted a positive outlook while defending the industry against criticism from environmentalists.
“I am convinced: mobility remains a promise for the future, not only for our country but worldwide,” Scholz said on 5 September at the opening of the IAA Mobility show in Munich.
“You will not run out of business,” he told carmakers before touring the exhibition stands of some of the biggest automotive companies in the country, such as BMW, Mercedes-Benz, Volkswagen, Continental and Bosch.
“At the same time, we can all agree that in the future, we need to get around in a way that doesn’t harm our planet and our environment,” he added.
The automotive trade fair has come under pressure from environmentalists, who have denounced the country’s failure to meet climate targets in the transport sector, with activists disrupting the Chancellor’s tour by shouting slogans like “the party is over” and calls for “fewer cars”.
A “team” for electric mobility
Scholz promised the car industry that policymakers would act as a “team” to promote the uptake of electric vehicles.
“And I come to you here today as a committed member of this team,” he added, highlighting the need for carmakers to play their part by offering affordable electric vehicles to the public.
“But the state also makes its contribution, especially in terms of cheaper electricity,” Scholz added, promising to quickly add wind and solar power capacity to lower electricity prices for industry.
The Polish government recently used the lack of affordable electric vehicles as an argument to challenge the EU’s planned phase-out of petrol and diesel cars at the EU Court of Justice, warning against the risk of “social exclusion”.
Scholz, by contrast, highlighted the improvements in affordability of electric vehicles over their entire lifecycle.
“Already now, petrol costs almost three times as much as electricity for 100 kilometres,” the Chancellor noted. “An average electric car, therefore, often amortises after only five years. So from then on, you’re not only driving cleaner but also cheaper,” he added, saying he expected the amortisation time of EVs “to decrease further” in the future.
Scholz also promised to deliver on the roll-out of charging infrastructure, saying his goal was to make charging “as easy or even easier” than refuelling petrol cars.
“We will be the first country in Europe to introduce a law obliging the operators of almost all petrol stations to provide fast-charging facilities with at least 150 kilowatts for electric cars,” Scholz said, adding: “This will soon make range anxiety a thing of the past.”
Chinese competition “welcome”
Scholz also demonstratively welcomed Chinese carmakers to the motor show, a move that industry observers closely watched.
“The countries that have achieved greater prosperity in the course of globalisation, the workers there, have no lesser right and no lesser claim to the opportunities of modernity than we do,” Scholz commented about China.
The Chinese car market is now outpacing German carmakers on their home turf with a rapidly expanding offer of affordable electric vehicles that has caused unease in Germany.
But Scholz argued that Chinese competition was good for the German car industry, saying: “Fair competition stimulates business. It is in the interest of consumers”.
“At the same time, there is no question about the international competitiveness of Germany as a car country,” he added, pointing to the country’s density of suppliers and research laboratories.
Industry representatives, however, did not share the Chancellor’s optimism.
“The burdens and bureaucracy, especially from Brussels, but unfortunately also from Berlin, Mr. Chancellor, continue to increase, contrary to all assurances,” said Hildegard Müller, head of German automotive association VDA.
In a recent announcement, the German government pledged to launch an initiative with France to lower the EU’s regulatory burden on companies and also promised to reduce burdensome rules within its own jurisdiction.
“The ever tighter corset is cutting off the air for companies to innovate,” Müller complained.
“This must be a wake-up call when we are expected to grow less than all other industrialised countries, when the number of company relocations and site closures increases and when people ask whether Germany is once again becoming the ‘sick man of Europe’,” she said, about a recent cover by UK-based magazine The Economist.