Various countries have begun drafting revitalization plans in accordance with the economic losses derived from the COVID-19 pandemic, where some goes for the direct approach in shelling out, and some wishes to kill two birds with one stone by implementing national policy with the substantial money that is being distributed. Germany is categorized as the latter, as the country prepares to conduct a green traffic transformation by profoundly propelling electric vehicle and charging infrastructure.
Each purchase of electric vehicle in Germany will receive a subsidy of EUR€3,000, and the post-pandemic economic stimulation program that lasts until December 2021 states that automotive manufacturers will receive an incentive of EUR€3,000 for models that are between EUR€6,000 and 40,000, where owners are expected to receive an increased subsidy of EUR€9,000 for electric vehicles. The 0.25% incentive tax rate was only applicable for models below EUR€40,000, and is now eligible for all models below EUR€60,000.
The post-pandemic economic stimulation program of Germany is expected to cost EUR€130 billion. In addition to subsidy and tax relief, the German government will also invest EUR€1 billion on R&D and future technology in 2020 and 2021, and invest EUR€2.5 billion on electric vehicle charging infrastructure and battery production, as well as EUR€1.2 billion on the incentives for low-emission buses and trucks.
Most German consumers remain uninterested in electric vehicles. In 2019, electric vehicles merely accounted for 1.8% of the sales of new automobiles in Germany, which was a far worse market value than the 32% of diesel vehicles and 59.2% of gasoline vehicles. The market value of electric vehicles remained insignificant at 3.3% in May 2020. One of the possible reasons is that consumers are worried for the driving distance of electric vehicles, as 97% of German consumers fear for the battery shortage and the lack of charging stations.
Hence, Germany believes that a popularization of electric vehicles will first require a popularization in charging stations for electric vehicles that would dissolve the consumers’ anxiety on battery shortage. Germany had only 27,730 electric vehicle charging stations by March 2020, and the German Association of Energy and Water Industries estimates that a minimum of 70,000 units of electric vehicle charging stations, as well as 7,000 units of fast charging stations, will be needed in order to popularize electric vehicles in the market.
In order to rapidly satisfy the demand for the infrastructure of charging stations, Germany has regulated all gas stations, as well as public buildings, including day care centers, hospitals, and sport venues, to install electric vehicle charging stations. However, as the energy efficiency and driving distance of diesel and gasoline vehicles constantly increase, the number of gas stations in Germany is also on the decline from the initial 40,640 gas stations in 1965 to the mere 14,118 in 2020. Thus, even if all gas stations in the country are installed with electric vehicle charging stations, the target of 70,000 is still a distant figure, and the German government would need to ponder on the approach in substantially increasing the number of charging stations.
This approach of the German government is actually derived from a similar policy from France, and the post-pandemic economic stimulation programs from various countries may become the silver lining for the development of the green energy industry.
(Media: TechNews. Cover photo source: shutterstock)