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German auto industry needs ‘up to €20bn’ from government for switch to electric cars

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
An electric vehicle charging point in Ruesselsheim, Germany. Photo: Ralph Orlowski/Reuters

The German Automotive Association (VDA) has called for the government to allocate billions to support a complete structural change in the industry as it moves away from combustion engines towards producing electric cars. 

“I think we're a talking about a double-digit billion amount that we need in total for the supplier and automotive industries,” Stefan Wolf from the VDA told German public radio on Wednesday, ahead of the summit between car-industry heads and politicians in Berlin.

Pressed on how much he thinks the industry needs in support he added: “€10-20bn [£8.5bn, $11bn-£17bn, $22bn]."

This money would need to be invested into expanding the e-car charging network and renewable energy to boost the demand for electric vehicles. The government should also back other clean technologies in the transport field, like hydrogen-cells, Wolff said.  

“I think the federal government needs to be clear about whether it is committed to this important industry,” he added.

READ MORE: Volkswagen begins pilot production of battery cells for its electric-car push

He rejected the accusation that the German car industry has been asleep at the wheel in terms of preparations for the new electric age and now German taxpayers need to pay for it to catch up.

Wolf said that China was Germany’s main competitor when it comes to battery and electric car production and development. “The Chinese government … is investing heavily to make China number one in the automotive industry, and we have to fight it,” he added.

The demand for major investment to support what is one of Germany’s core industries comes days after a report claiming some 400,000 jobs connected to the car sector could face extinction in the next 10 years as internal combustion engines are phased out — based on the fact that electric cars contain way fewer parts.

That 400,000 figure was widely disputed by the VDA, who pointed out that the number assumes Germany will still produce a relatively low number of e-cars and batteries domestically. It also does not factor in new jobs created in the sector, or domestic growth in e-car and battery development.The VDA estimates that between 80,000 and 90,000 jobs in the powertrains branch of industry could be lost by 2030.

The government announced in November that German drivers would get more discounts on electric cars, as part of a subsidy package jointly paid for by car companies and taxpayers.

READ MORE: German drivers to get up to €6,000 discount on electric cars

Chancellor Angela Merkel also said she wanted to see 1 million charging points across the country by 2030. Currently there are about 21,000, which is one major deterrent for people considering buying an electric car.