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Playthings for the rich

Wenkel Rolf Kommentarbild App
Rolf Wenkel
April 27, 2016

An electric car subsidy will be a flash in the pan, not the silver bullet against climate change that the German government is seeking. From a public policy standpoint, it’s also rather dubious, says DW’s Rolf Wenkel.

Tesla Modell 3
Image: picture alliance/ZUMA Press/Tesla Motors

I admit I've never actually been inside a so-called e-car. But I've heard all the stories about their sudden, seemingly effortless acceleration or their being virtually soundless. It's pretty cool, they unanimously agree.

But that kind of novelty comes at a price. An electric VW Golf, for instance, costs upwards of 35,000 euros (about $40,000). By comparison, a conventional Golf will set you back anywhere between 17,000 to 27,000 euros. But a full tank of gas will get you 500 kilometers (311 miles), whereas a full battery charge is only good for about 190.

Which leads me to the conclusion that even if the German government teams up with companies to give me 4,000 euros, I still won't be able to afford an electric Golf. There's just not enough bang for my buck. There isn't a single German manufacturer that has successfully developed a technically advanced model that presents a real alternative to traditional combustion engines in terms of price and cruising range. Much less in terms of triggering a sense of consumers' lust that makes it impossible not to want one. We've all got a smartphone, but it's going to take a lot more than 4,000 euros to make us all want an e-car.

Wenkel Rolf Kommentarbild App
DW business editor Rolf Wenkel

The innovation problem

That's certainly true for German e-cars. I can't shake the feeling that Germany's automobile industry is only half-heartedly investing in R&D in the field of electromobility. The automotive expert Stefan Bratzel has spoken of an "innovation problem." Indeed, 70 percent of research activity at Germany's big car manufacturers is focused on optimizing conventional gas and diesel motors.

From an automaker's perspective, that's understandable. Demand for e-cars is still weak, thus there are no economies of scale to lower the average production cost per unit. And profit margins are low, so the price of a car you can plug in is still too high compared with mass-produced models. E-cars are toys for the rich. But investing more in R&D isn't going to make car manufacturers rich, so why do it?

How does the old French maxim go? Honi soit qui mal y pense. Shamed be he who thinks evil of it.

Regulatory sins

Now, however, the German government has put pressure on itself and announced in no uncertain terms its goal of having 1 million electric vehicles on German roads by 2020. Since such an objective is clearly not achievable, the government has simultaneously committed two ordoliberal sins. In a social market economy, subsidies are a venial offense, especially if they occur in a sector with billions of euros in turnover and profits. And please don't anyone tell me that just because half of the money is coming from auto makers themselves makes it any less of a subsidy.

What's more, the German government is spending taxpayers' money on this, meaning society as a whole is funding these rich people's toys. The German Taxpayer's Association has sardonically called this a "planned economy deluxe." Environmental organizations, for their part, say transportation models based around personal vehicles are on their way out anyway. Money would be better spent on refurbishing or expanding public transportation, they argue.

No silver bullet

Which brings us to the environment. Electric cars are not environmentally friendly, per se, as long as Germany continues to use coal for its electricity generation. Furthermore, the production of e-cars leaves behind an equally large carbon footprint as conventional automobiles. Sorry, but electric cars aren't a silver bullet in the fight against climate change.

Berlin's environmental policy will remain implausible anyway until the government imposes blanket speed limits on the Autobahn. That would not only prevent tons of particulate matter and greenhouse gases from being released into the air, it would also drastically reduce the number of traffic fatalities. The best part? It would cost taxpayers virtually nothing! Of course, such an ambitious move would require a bit of courage on the part of politicians who would have to stand up to the car industry's lobbyists. And what politician is about to do that?

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