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Plan to End E-Vehicle Subsidies Sparks Anger in Germany
- V__ 3y agoIt's less a plan and more the result of a court case, which forced the government to reduce their budget for the next year.
- hnbad 3y agoThat's not the entire truth. The government could abolish (or pause) the "debt brake" or raise taxes, however neither option is acceptable to the so-called liberal party that is effectively acting as the king maker in this coalition (being the smallest partner but also ideologically distant enough to be the most at risk of breaking rank, which they threaten constantly). They also resist any cuts to subsidies for sectors their donors care about (which is why 1/3 the cuts to "climate damaging subsidies" affect agriculture despite only like 10% of those subsidies in total being for agriculture). They would however be perfectly fine cutting social welfare programs, of course, and were happy depleting the budget used to subsidize the "49€ ticket" for public transit (which was based on a test run of a "9€ ticket" and has already been announced to go up in price in the near future). So with the "liberals" preventing tax increases (or resuming the existing wealth tax that was put on hold decades ago), preventing cuts to subsidies to fossils and also preventing any action agains the "debt brake", there's not much the government can do. It's important to note that the "debt brake" is entirely self-imposed and the government can legally suspend it as would be warranted in an economic downturn (which requires investment as austerity is widely known to be ineffective to the point of being self-destructive unless your goal is to just privatize everything and tank the economy further) or during a major crisis (which I believe was the justification for the "special military budget" conjured out of thin air after the invasion of Ukraine or for the temporary suspension during the pandemic). Arguably even the climate catastrophe would qualify if we were taking it more seriously. The entire justification for the "debt brake" was to pay off debt during an economic boom to have more wiggle room during an economic downturn - except that justification completely went out of the window once inflation started going up and now it's just treated as self-justified and not to be questioned.
- bradley13 3y agoThe auto industry has a huge amount of influence in Germany. Consumers are probably less bothered - all subsidy programs have an end, and people know this. However, the auto industry claiming "woe is us, the economy will crash, because we are so important"? That's the backlash. Germany has a deficit problem. They are expecting to run a deficit of 4.25% this year, when 3% is the upper limit if there is no emergency. This is partly because the courts have prohibited them from basically stealing 60 billion euros (unneeded emergency Covid funding - no, you can't just add it to the regular budget). It's good to see them tightening their belt. Long-term, one can dream that they might streamline their bureaucracy. p.s. Since there are lots of USAians here: The USA is running the highest deficits of any developed country (including infamous Japan). See the latest IMF Fiscal Monitor, page 50 (https://www.imf.org/-/media/Files/Publications/fiscal-monitor/2023/October/English/text.ashx https://www.imf.org/-/media/Files/Publications/fiscal-monito...). Y'all might want to plug that leak...
- generic92034 3y ago> Since there are lots of USAians here: The USA is running the highest deficits of any developed country (including infamous Japan). See the latest IMF Fiscal Monitor, page 50 (https://www.imf.org/-/media/Files/Publications/fiscal-monito https://www.imf.org/-/media/Files/Publications/fiscal-monito...). Y'all might want to plug that leak... And while the USA is attracting a huge amount of investment with their IRA, Germany is losing parts of their industry (chemical industry and other high energy industries investing no longer in Germany) and is also jeopardizing their efforts to attract (for example) chip makers. I am not so sure your analysis is covering all the relevant points.
- dangus 3y agoTwo countries on the top of the geopolitical power rankings have the most debt, and that seems expected and normal to me. Your ability to take on debt reflects other people’s willingness to lend to you, as well as your ability to turn today’s money into a larger amount of tomorrow’s money. Which governments are more reliable borrowers than the US or Japan? Is there a safer currency than US Dollars more likely to maintain its value that you’d rather be paid back in?
- hiq 3y ago> Germany's plans to get 15 million electric cars on the road by 2030. That's such a bad metric. Increasing the number of cars on the road is not good from an environmental perspective. Reducing the number of cars burning fossil fuels is.
- physicsguy 3y ago> Reducing the number of cars burning fossil fuels is. Only if it's matched by a sufficient switch to renewables instead of fossil fuel generation.
- grecy 3y agoThat is not correct. EVs are so much more efficient than ICE vehicles they are still a net win even when powered with "dirty" electricity. https://www.forbes.com/sites/mikescott/2020/03/30/yes-electric-cars-are-cleaner-even-when-the-power-comes-from-coal/ https://www.forbes.com/sites/mikescott/2020/03/30/yes-electr...
- mike_hock 3y agoEquivalent to a net win that could easily be gotten by replacing SUVs by other petroleum-powered vehicles with a more reasonable carbon footprint, without the need to build completely new infrastructure.
- two_handfuls 3y agoYes let’s do both
- thelastgallon 3y agoExcess power is curtailed when there is no demand and power prices go negative (to stop the production). This happens 200M+ times in US, must be the same even in EU grid. EVs can absorb all this excess production. No need to build any net new capacity. And, EVs will accelerate renewables by providing flexible demand, making renewable more profitable.
- LightBug1 3y agoYes, end EV subsidies ... as soon as they end oil subsidies. Deal?
- mrangle 3y agoNo, because you have no leverage.
- LightBug1 3y agoGive it time. The leverage is inevitable.
- mrangle 3y agoMaybe. At the risk of being argumentative: This top-down alarmism now has been going on for decades. Electric vehicles have close to zero market share, all considered (commercial and commuter unit of mass travelled). It could go away tonmorrow and the world wouldn't miss it. We're talking about today's and tomorrow's subsidies. Electric's supposed leverage, not assuming authoritarian market interference, isn't on the visible horizon.
- LightBug1 3y agoAgain, depends on which timeframe you're operating on, of course. A solution to the "alarmism" will happen, whether that's EV's or not. And there was a time when the iphone was just 1% of the market ... And listen, I get it. I'm divided on EV's. On the one hand, I think they're necessary to help sustain our planet. All things equal, I'd advocate for them just to avoid pollution in our childrens lungs. That is 'alarming' enough to me not counting any concern for the impact of climate change. On the other hand, I get the love of proper cars and wouldn't want to give that up. For me the happy medium, is having basic, smart and comfotable, affordable EV's during the week (nothing as advanced as a Tesla, which I hope die out, they're complete overkill to what's needed and what we have capacity for). If the majority had this, then we could easily justify thrashing a V8 at the weekend and at the track to enjoy ourselves. To enjoy actual cars. Anyway ... just p1ssing in the wind.
- darklycan51 3y agoGermany is legit the one country in the western hemisphere doing the most damage to the future, and I am surprised how nobody calls them out on it. 1)Turning off nuclear and cancelling plans for new plants because literally their party, the "green party" originated as an anti nuclear party, so of course they don't care and just do it for political reasons. 2)E-Vehicles from US and China threatening Germany's old guard that refuses to adapt? who cares about the environment then. Remember them falsifying reports and getting away with a slap in the wrist?
- borissk 3y agoDon't think they are doing most damage. Their CO2 emission per capita are a lot lower than US. They didn't recently have a president speaking about "clean coal". They have a huge amount of solar and wind power generation. A lot of modern renewable technology came from German companies and engineers. They don't build new coal power stations.
- the-dude 3y agoThey don't have to : they have approved plans to restart decommisioned existing ones. https://www.reuters.com/business/energy/germany-approves-bringing-coal-fired-power-plants-back-online-this-winter-2023-10-04/ https://www.reuters.com/business/energy/germany-approves-bri...
- WorldMaker 3y agoGermany's old guard manufacturers are definitely behind Chinese EV companies, but they seem much more publicly willing to adapt to EVs than US' old guard car companies. Neither Ford nor GM have committed publicly to an "EV or bust" date, but VW Group and Mercedes-Benz both have publicly committed to selling nothing but EVs starting in 2025. (They seem to be on track for that, too. So far.) BMW is the odd duck left in Germany still on the EV fence (and also still flirting with hydrogen fuel cells [in partnership with Toyota] as recently as 2022, lol), but also represent a fraction of the sales of VW Group and Mercedes-Benz brands. > Remember them falsifying reports and getting away with a slap in the wrist? The EPA settlements were much more interesting than a "slap on the wrist". They paid for the vast majority of America's second largest EV charging network (Electrify America). They are also a big part of the "catch-up" R&D funds behind why both VW Group and Mercedes-Benz believe they will make nothing but EVs starting around 2025. VW Group's now heralded MEB platform, especially, is somewhat directly a product of US EPA financial engineering and maybe doesn't exist without the EPA settlement requirements. It's almost too bad US manufacturers weren't caught cheating in the same way/at the same time to have the EPA also require them to do similar things in a similar way.
- elzbardico 3y agoThe problem with e-vehicle subsidies is that for some reason we as society decided that an electrical car should also be a luxury car with insane and impractical acceleration, humungous range numbers and all kind of creature conforts and aesthetical fru-fru you can imagine. It doesn't even matter if people don't get rid of their petrol boxes, as long as they are kept as a second car for the very rare long-distance trip. I refuse to believe that people wouldn't get attracted to a small and INEXPENSIVE small electric car for daily usage and commuting. We just need to sell them on this: keep your ICE if you want, we don't care as long as you get this cheap electrical econo-box. Yes, it only gets some 60-80 miles of range, but we are not telling you to get rid of your SUV, you can keep it, this is your SECOND car.
- andsoitis 3y ago> The problem with e-vehicle subsidies is that for some reason we as society decided that an electrical car should also be a luxury car with insane and impractical acceleration, humungous range numbers and all kind of creature conforts and aesthetical fru-fru you can imagine. That's not true. There are many electrical cars that definitively NOT luxury. Heck, I don't consider my Tesla a luxury vehicle when I compare it to vehicles from Mercedes, BMW, Audi, Porsche, etc. On "impractical acceleration" - isn't that just a consequence of the technology? I suppose we can mandate artificial limits on acceleration, but it isn't an effect of a "luxury" denotation. Humungous range: EVs have much less range than fossil fuel counterparts. I think your framing of EVs as luxury is unfounded. Pricey perhaps, but that is a different matter. Agree with your point about a marketplace for EVs with less range and consequently less battery capacity needs (also less impactful on the environment), and there are cars offered of that segment, but I maybe they're much less popular?
- 0xedd 3y agoI get taxed on it for being in luxury class. It is above all other sedans price range. It's luxury.
- hnaccount_rng 3y agoThe problem with that line of thinking is, that while your proposition ("[...] people would be attracted to [...] inexpensive cars [...]") is likely correct, that's not an offer that is possible to make. The luxurious cars you talk about have _half_ their value in their battery. Even if you strip out any profit, and get by with a quarter of the range of a Tesla, even then it won't be 10x cheaper. And everything in that scenario is insane: The no profit part is obvious, but even the 4x less range is insane (as in it doesn't cover the daily commute safely anymore). Because 4x less range does not give you a 25% battery, because there is some overhead (mainly heating). On the other hand you have huge amounts of money sunk into the tooling around "classic" cars, that investment is being financed both over a lot of generations and an insane number of cars. That being said: Cheaper EVs are coming. Both from a production point of view (battery costs decrease, more tooling and ultimately capacity is being build up), but also from an market point of view as the secondary market of EVs is just starting to come alive (it's only now that used and new EVs start to differ meaningfully in price) and also from a purely economic point of view in the sense that EVs are far cheaper to operate, so they don't _actually_ need to be price competitive at point of sale
- sericmotomoto 3y agoI don't understand the current news and the pointless debate. Germans knew this at the beginning of the year, if not even earlier. And there is no anger. None. Four out of a hundred people are angry about it while a majority wouldn't have gone for an EV anyway. A lot were thinking about buying a hybrid but the general population believes that the minute enough people have EVs, parts will start to break "in series" so that the manufacturers can increase profits. Yes, there are articles and bits on TV and the internet about how maintenance costs of EVs are up to a third lower than usual but it's really hard to believe politicians and manufacturers after things like cum-ex, the wirecard and the diesel scandal. Now, none of this talk and checking statistics will result in anything but more distrust into authorities, the industry or the media, that is, if you dive deeper than the surface and the nonsense German economists are babbling on TV. The subsidies are probably going to return, the latest with the next Bundestag, who will then be celebrated as being on the side of the people, while also being slightly or much more right wing, either more or less openly or secretly under the hood. This whole debate is nothing but a preparation for the next election and to elevate the "conservative" parties.
- Moldoteck 3y agoI hope they'll invest the money in better directions like bike paths or, or, f*** fixing DB once and for all??? How come their train infra is in such a poor state? And it's not like they don't have a neighbor ranking among the best countries regarding rail infra...
- thelastgallon 3y agomore than 60% of all fossil fuel subsidies granted in 2022 were spent in three countries: Germany (EUR 21 billion), Italy (EUR 25 billion) and France (EUR 30 billion): https://www.eea.europa.eu/en/analysis/indicators/fossil-fuel-subsidies https://www.eea.europa.eu/en/analysis/indicators/fossil-fuel... Fossil fuel subsidies are sacrosanct. 7T subsidies just in 2022: https://www.imf.org/en/Blogs/Articles/2023/08/24/fossil-fuel-subsidies-surged-to-record-7-trillion https://www.imf.org/en/Blogs/Articles/2023/08/24/fossil-fuel...