Why is Germany Planning Incentives to Buy Electric Cars?
Back in the darker days, some of us gave President Obama hell for trying to save the auto industry. For whatever reason–anti-union, anti-spending, anti-doing anything but complain; the pols and pundits gave him the business for bailing out Detroit with loans and the “Cash for Clunkers” program.
Years later, we see quarter over quarter increases in domestic car sales. But the pundits still doubt the need for the bailout. Then again, the pols and pundits have a job much easier than the rest of us. They don’t even have to be right, just loud.
A few days ago, this story from Automotive News Europe via Bloomberg came across my screen:
Apparently Chancellor Angela Merkel had made a pledge to put 1 million EVs on the road by the year 2020. These days, with the German economy slipping a little, the Chancellor revisited the pledge–probably with a little nudge from her friends in Stuttgart, Munich, and Wolfsburg. According to the article:
Chancellor Angela Merkel says Germany will need to provide more incentives to meet a goal of having 1 million electric cars on the country’s roads by 2020.
“There is a lot to do,” Merkel said Tuesday during a press conference in Berlin. “We see that further subsidies are necessary. We must speak with the German states about that.”
…Merkel is far behind in her push for 1 million electric vehicles in part because her government has balked at incentives like those offered by neighbor France, where consumers receive as much as 6,300 euros ($7,840) to help cover the higher cost of low-emission vehicles.
Electric car sales in Germany last year were about 7,600 vehicles, while in France demand was almost double that at 14,400.
So in 2014, Germany, home of austerity, is doing a little reversal in order to help plow the road for engineering innovation among German automakers. If you’ve read even a few of our posts, it’s easy to see that Europe is making a full commitment to expanding the production and sale of electric cars and plug-in hybrids.
I’m not arguing, I’m applauding. Over here, we’re so slaved to this idea of “the market” as god and kingmaker, that our political blowhards are deaf to the idea of using incentives to foster innovation. “It’s unfair” is another way to say “we don’t need to spend money on anything”.
Merkel is tasking her government to look at how to expand incentives to make it easier for citizens to buy EVs, expand the charging infrastructure, and pretty much violate every weerd idea about economics that red state economists think are good to drive an economy.
Now if Angela were handing out more subsidies to coal mines and oil drillers, she’d pass the Republican Econ 101 test.
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