German chancellor calls auto summit as carmakers bleed jobs
Sander Tordoir, the chief economist at the Centre for European Reform (CER), told DW that Merz's defense of petrol and diesel-engine cars is a "sideshow" to the much larger threat facing Germany's auto sector.
"It is hard to argue that a deadline 10 years away is the driving factor behind Germany losing half of its net car exports in the last four years," Tordoir said. "There's clearly something else going on here, and that's China. So there needs to be an industrial and trade policy response to China."
Tordoir said it was unclear whether Germany alone could roll back EU legislation so easily. German media reported that a compromise was likely to be agreed at Thursday's summit to allow hybrid vehicles — those with batteries and internal combustion engines — to be sold beyond 2035.
..."The obvious move is to reinstate subsidies to purchase electric vehicles, which Germany cut at the end of 2023, then to coordinate those subsidies across the European Union," said CER's Tordoir, referring to an effective discount of up to €7,500 ($8,750) on purchases of new EVs. "There is overcapacity and a lack of demand for European carmaking across the continent. And so we need to work on the demand side."
...Tordoir called for more attention from Berlin and Brussels to boosting Europe's auto sector as a whole, noting that France, Italy and Spain were also losing global export market share to China.
"The best way out is to grow our own [European] market, which is still very sizeable and has the potential to create more demand than it currently does," he told DW.
..."Our key export markets also happen to be our allies," said Tordoir. "The US and the UK are very important markets for German and European carmaking. So there is the potential to create measures that will really move the needle."
...Tordoir, for example, believes the European car industry has "some catching up to do, but it is not like Europe shows no potential in building the cars of the future. It's worth providing some support to essentially try to stay in the race and to get the transition right," he concludes.