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Germany to inject 5 billion euros into its automotive sector
- December 3, 2020
- Posted by: Renault Business Academy
- Category: News

The German car industry, hit hard by the covid-19 pandemic, will receive up to 5 billion euros (almost $6 billion) in government aid to overcome the crisis and continue the transition to electric cars.
At the end of a meeting with representatives of the automotive industry, Angela Merkel‘s government announced in a statement that it wants to extend aid until 2025 to encourage individuals to buy electric vehicles, replace old trucks and install more electric charging points.
“The German automotive industry is aware of a long-term structural mutation, which creates enormous challenges for businesses, regions and workers,” government spokesman Steffen Seibert said, without specifying that “small and medium-sized supplier enterprises, in particular, must be supported during the transformation.”
The new plan to support this flagship sector of the German economy will allocate EUR 1 billion to extend incentives for the purchase of electric vehicles, equally much to aid to renovate the old truck park and another billion to a fund to support suppliers’ technological investments.
These aids are intended to encourage petrol stations to equip themselves with electric charging points. The German government wants at least 25% of all gas stations to be equipped with fast-charging infrastructure by the end of 2022, 50% by 2024 and 75% by the end of 2026.
“The goal of creating an additional 50,000 reload points by the end of 2021 is maintained. This means there will be 72,000 publicly accessible charging points,” he said.
Another 2 billion euros of existing revival funds will help suppliers adapt to the new reality.
The automotive sector in Germany accounts for one-fifth of the industry, about 5% of GDP and generated more than 800,000 direct jobs, before the health crisis.
As in the rest of the world, the coronavirus pandemic has caused an unprecedented fall in the automotive market in Germany. Vehicle sales plummeted by 23% in the first ten months of the year, compared to the same period in 2019.
But in addition to the crisis, the sector has faced the complex and expensive shift towards electric mobility, where most German manufacturers are now trying to recover the delay.
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