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Mixed messaging in Germany

While we’ve written on Germany’s dominance with respect to their auto manufacturing prowess, it has not been all roses for Europe’s largest economy. The country currently finds itself in an odd position, principally due to climate change. With most industrialized countries re-thinking their role in contributing to climate change, Germany is no exception. Due in large part to more SUV sales, the average emissions of a new car sold last year in Germany was up. Carbon pollution reduction targets for 2020 will likely not be achieved and passenger cars are contributing to 11% of greenhouse gas emissions.

European Union emission targets are some of the most stringent on the planet, and fines for non-compliance are steep. While car-sharing and bikes have caught on in major German cities such as Berlin, SUV sales continue to dominate and like the U.S. in a lot of ways, this is a tough customer group to sway away from their beloved large cars. Electric cars are still more expensive and a climate package from the German government is expected to be passed shortly, providing even more incentives for purchasing electric cars. But the pace has been glacial.

Nearly every major German auto brand has appointed a new CEO over the last year. The Frankfurt Motor Show was supposed to be a major platform for the country to show off developments in electric vehicle technology, but many international auto manufacturers chose to stay home while climate protesters upstaged Volkswagen AG, BMW AG and Daimler AG’s Mercedes demonstrations. Their principal claim was the big 3 were not doing their part in ending German addiction to gas and diesel engines.

In all fairness however, developments are in play. VW is “all-in,” their words not ours, on battery cars. In fact, VW has gone on record with a 40% of electric sale figure by 2030. A rather aggressive stance where rival firms such as BMW are playing it much more cautious. Hydrogen fuel-cells are BMW’s cup of tea which VW is not all that interested in. Regardless of who is rumored to be doing what, rolling out gas guzzlers like the Mercedes AMG GLE Coupe and BMW X6 alongside a handful of electric cars in Frankfurt sends some real mixed messages. Communication is key in any business, and the Germans remain obtuse.  

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