In times of Corona one term has a boom: crisis mode. All industries switch to crisis mode. The Corona crisis is omnipresent. It hits the car industry right in the heart. And this in a phase of technological upheaval such as the automotive industry has never experienced before. Keywords: climate change, e-mobility.
After all, the signs were pointing to transformation. Away from the combustion engine and towards e-mobility or hydrogen technology, a China virus is coming and is bringing the global automotive market to the brink of disaster. With dramatic slumps in sales and thousands of job losses. The effects of the pandemic on the further development of e-mobility cannot yet be precisely quantified. But the corona pandemic is extremely critical, especially for new technologies. Producers and consumers tend to remain calm in crises rather than take new risks. Currently, only 0.26 percent of German cars use a purely electric drive. The economic consequences of the virus will probably delay the breakthrough in Germany even further.
Historic slump in profits
The emergency stop came practically overnight. A virus called Covid-19 took control and put the automotive industry and its suppliers in a coma.
“Every branch of the automotive industry is suffering enormously from the spread of Covid-19. For example, the American tire manufacturer Cooper Tire & Rubber Co. has seen its global sales fall by 14 percent. It is precisely the unpredictability of this development that is affecting the industry. VW resumed production in Germany at the end of April, but is now forced to cut production again,” Bernd Roth of rubber dealer Timberfarm told EL.
On the one hand, the health of the employees and of people in general is at stake. On the other hand, it is about the interests of the economy and the survival of the most important industry in Germany and other regions of the world such as Italy, France, the USA and Asia.
Experts expect a worldwide decline in sales of 20 percent. Whereas almost 80 million passenger cars were still being sold worldwide in 2019, this figure would have fallen to just 65 million vehicles by 2020. The figures for the first quarter of 2020 should provide an indication of the forecast. According to these figures, sales in Germany will actually shrink by 20 percent to around 700,000 passenger cars.
Are we experiencing a renaissance of the scrapping premium?
To get the car industry back on track, to boost demand, we need clever and far-sighted economic stimulus packages. For some – explicitly the heads of the car companies – the resumption of a scrappage scheme (eco-rebate) limited in time and financial volume with a contemporary eco-component would be a step in the right direction. This would apply to older petrol and diesel vehicles. Their plan: the lower the CO2 emissions of the new car, the higher the financial subsidies.
For the others, the idea of a scrappage premium with an eco-coating is “old wine in new bottles”. They refer to the devastating results of the first scrappage scheme in 2009. Although the model was imitated worldwide, the 5 billion euro economic stimulus package was one of the most ineffective in German economic history.
What the proponents in the car industry call a clever subsidy programme is described by their opponents as ecological and economic nonsense with reference to a scientific study.
It may be that the truth lies somewhere in between. Now both sides should see the crisis as an opportunity and orientate future car production towards electric vehicles and hydrogen and fuel cell vehicles. For climate protection has not evaporated with Corona.
Born 1981 in Strasbourg, is a freelance journalist for various online media throughout Europe, focusing on finance, real estate and politics. He gathered his professional expertise as a consultant for global players and medium-sized companies. Fournier studied economics and german in Paris and Dresden. He currently lives in Saarland and has been a member of the Euro Leaders team since the beginning of 2019.