Sounds good – but is completely wrong

Helping the climate and German industry at the same time – that sounds like a smart plan. This is exactly what the traffic light coalition is promising with its reform of company car taxation. A special depreciation allowance for “newly registered fully electric and comparable zero-emission vehicles” is to apply retroactively to July 1, 2024. At the same time, the previous cap on the gross list price will be raised from 70,000 euros to 95,000 euros.

With this draft law, the cabinet will boost the collapsed sales of electric cars and help German car manufacturers to increase sales. If you can now kill two birds with one stone, who would be against it? In fact, the only good thing about the amendment is that there will still be a certain preference for electric cars. They only have to be taxed at 0.25 percent of the monetary advantage. For combustion engines, it is one percent.

1. Any promotion of cars is an anachronism

Otherwise, almost everything goes in the wrong direction. Let’s start with something fundamental: even electric cars do not change the situation with cities being overcrowded with parked cars, huge sealed areas, or the danger to life of other road users. Any kind of support for cars is an anachronism, whether in the form of tax privileges or purchase premiums. (But there has long been an alternative: the mobility budget.)

2. Tax relief for higher earners

Secondly, such support is antisocial. It is financed by all taxpayers, but only helps those with higher incomes. Raising the price cap makes this contradiction even more glaring. Who on earth gets a company car for 95,000 euros? Have people died, are the tax breaks necessary?

3. Towards SUVs: An unfortunate trend continues

Third parties support the planned regulation, which is the unfortunate trend among German car manufacturers to build mainly large and expensive luxury SUVs and leave the segment of low-cost electric cars to others. This is precisely what contributed significantly to the crisis at VW. It is generally questionable when politicians try to compensate for management errors in the industry. It is doubly questionable when they confirm these management errors.

4. Hypocritical promotion of electromobility

Fourthly, it is quite hypocritical of the government to once again use tax money to boost electromobility, which it itself has unnecessarily stifled – especially through the FDP’s e-fuel babble. “Increasingly large parts of politics are practicing a dangerous reversal of causal relationships,” commented the Süddeutsche Zeitung. “The sales figures for electric cars are poor for almost all manufacturers?” Then let’s question the end of combustion engines. The fact is, however: Demand is weakening, especially because Some politicians are toying with the idea of ​​extending the combustion engine lifespan.”

The debate about whether electric cars will prevail may have been relevant in 2010 or 2015. Today the issue is over. It is clear that this would not cost the government a cent in tax money and would help the car industry at the same time. So we are really killing two birds with one stone.