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Entering e-mobility with a bang

At the beginning of June, the German government coalition adopted an economic stimulus package of 130 billion euros to assist the German economy in its recovery. With this economic stimulus package, the German government is sending a strong signal for forward-looking, new technologies in the fight against climate change. More than 8 billion euros are earmarked exclusively for e-mobility.

The future is electric

The economic stimulus package provides for a large number of measures to promote electric mobility. With the increase in the purchase premium for electric vehicles, the tax relief for battery-powered company cars in the mid-range price segment up to 60,000 euros, the extension of the tax exemption for EVs until 2030 for the motor vehicle tax and the reduction in VAT until the end of 2020, the German government is providing strong incentives for the purchase of electric vehicles. The political decision-makers in Germany are willing to promote the turnaround in transport and to invest billions in achieving this goal. Even though the German automotive industry and many prime ministers of the federal states have made vehement demands, the economic stimulus package does not include a purchase premium for combustion engines. The future of the automobile in Germany belongs to alternative drive engines! Given the substantial financial incentives for electric vehicles, the switch to electric mobility is becoming increasingly attractive.

2020 – The year of the charging infrastructure

The year 2020 remains decisive for the market ramp-up of e-mobility. The main challenges are related to the charging infrastructure. In order to accelerate the market ramp-up of e-mobility, the federal government intends to invest an additional 500 million euros in expanding the private charging infrastructure. The master plan charging infrastructure that was presented at the end of 2019 still mentioned a 50 million euros investment. Without batting an eyelid, the federal government is increasing the existing investment sum tenfold. The government is signaling its willingness to push ahead with the expansion of the charging infrastructure.

Moreover, with the long-awaited reform of the condominium and tenancy law, the German government intends to remove the legal hurdles for the installation of private charging infrastructure by homeowners and tenants. The draft law provides that tenants and homeowners will finally have a legal right to the installation of private charging infrastructure in existing buildings. Furthermore, the German Parliament is currently dealing with the implementation of the EU Energy Performance of Buildings Directive (EPBD) through the Building Electromobility Infrastructure Act (Gebäude- Elektromobilitätsinfrastruktur-Gesetz – GEIG). The law is intended to regulate that new buildings and buildings undergoing major renovation must be equipped with empty conduits that allow charging points to be set up for all parking spaces. Both laws are to be passed after the parliamentary summer break in September and have enormous potential to further accelerate the expansion of the private charging infrastructure in Germany in 2020.

There is also a lot going on in the field of publicly accessible charging infrastructure. The government is striving to reduce the so-called ‘range anxiety’ of German drivers by expanding the publicly accessible charging infrastructure. As part of the master plan charging infrastructure, the federal government has therefore set itself the goal of providing one million public accessible charging points by 2030. To this end, the federal government will publish a new funding guideline within the year, as the existing funding guideline for the expansion of the charging infrastructure expires at the end of 2020. To increase the expansion of  the publicly accessible charging infrastructure, the federal government will redefine aspects of charging infrastructure operation, authentication, use, payments, and interoperability for AC and DC charging with the revision of the Charging Infrastructure Ordinance (Ladesäulenverordnung- LSV). Furthermore, the government coalition has agreed in the economic stimulus package to introduce supply requirements for filling stations so that ultra-fast charging stations (<350 kW) can be set up at filling stations on German motorways.

The German government is striving to help e-mobility achieve a breakthrough by expanding the charging infrastructure on the one hand and by providing financial incentives for the purchase of electric vehicles on the other. The signs of the future in Germany are pointing to electric mobility ­– in the passenger car sector there will be no way around battery electric mobility. Potential is also seen in hydrogen technology. The benefits of the fuel cell are to be found in heavy-duty and commercial vehicle traffic. In addition, hydrogen offers the chance to redefine an energy storage system of the future. With the National Hydrogen Strategy, the federal government is trying to pave the way for hydrogen technology in Germany.

In the next 15 months until the federal elections, a number of regulatory initiatives still need to be completed. For example, there is still no uniform definition of the term “end consumer” in energy law. Furthermore, a standardization of the communication between the charging infrastructure, the electric vehicle and the power grid is still needed.  At the same time, the parties are already in the middle of preparing for the period after September 2021. Political decision-makers at the federal and state level are hungry for new ideas and innovative solutions to meet the challenges of climate change in the transport sector and help e-mobility achieve a breakthrough.

The German government is open to constructive exchange with the industry in order to boost e-mobility. Now is the right time for companies and investors to position themselves in the political debate!

Authors: Sina Gärtner and Stefanie Grunert