Leaders in the Union and SPD parliamentary groups have agreed to revise the electric car premium program with the goal of promoting domestic production. This decision, outlined in an internal party policy memo reported by Politico, involves shifting to utilize preference rules currently being developed by the European Union.
The document states that once the Federal Government establishes Local-Content criteria that comply with EU law and can be harmonized across the Union, these standards will be integrated into the ongoing subsidy program.
This move follows earlier advocacy by CSU regional group leader Alexander Hoffmann, who argued to Politico in early August that additional criteria must be added to the EV premium to ensure that funding primarily benefits German manufacturers. Hoffmann previously pointed out that the current EV premium disproportionately benefits non-European producers, emphasizing that the subsidies must be structured so that the majority of the vehicles’ value creation occurs within Europe. Sebastian Roloff, the economic policy spokesperson for the SPD faction, agreed with this assessment, stating that the EV premium represents the most obvious application case for “Local-Content-Kriterien.”
The European Commission is currently developing these so-called “Local-Content rules” under the “Industrial Accelerator Act.” These rules require that a certain proportion of the value created for specific procurements must occur within the EU. Although the German government has shown skepticism toward this initiative previously-fearing it might overly restrict free trade-France is noted as the strongest proponent of preference rules.
In addition to these subsidy changes, the faction leaders from the Union and SPD have also pushed for alterations to the European Union’s automotive package. They specifically called for a temporary pause on the tightening of the “Utility Factor,” a metric planned by the EU Commission starting next year. This factor determines how heavily hybrids and electric vehicles contribute to the manufacturers’ CO2 fleet targets; the EU plans to lower this factor further, which would place a greater burden on hybrids concerning fleet limits. Furthermore, the factions demand that emissions exceeding the 90 percent goal not require full compensation, and that a target for green steel must be achieved.
