VW to introduce own “carbon tax” on cars, exempting electrics

Volkswagen will raise the prices of its cars on the basis of the models’ CO2 emissions, Stefan Menzel writes in business daily Handelsblatt.

The Wolfsburg-based car company increases its prices annually based on inflation, but this is the first time the company adds an environmental component that leads to a differentiated price increase for the individual VW models, he writes.

On average, the price for all models will increase by 1.5 percent, according to a letter from the VW group to its dealers, available to Handelsblatt.

The more CO2 a model emits, the higher the price increase will be, with fully electric models such as the ID.3 and the ID.4 being exempt from any major price increases, the newspaper reports.

Volkswagen has not yet presented the new price list in full, but VW dealers expect large and heavy vehicles to be hit hardest. “For the large combustion models, we expect up to four percent,” a dealer from southern Germany told Handelsblatt.

Dealers, who are suffering from the consequences of the pandemic and the associated closure of their businesses, fear a drop in sales.

“We need the trade to open up, and we need it now,” Dirk Weddigen von Knapp, head of the German Volkswagen and Audi partner association, told the newspaper. The new pricing system is in line with the company’s goal of becoming climate-neutral by 2050.

The German car industry has committed to climate-neutral mobility by 2050, but some companies reject a sole focus on electric mobility and argue that a combination of efficient combustion engines and synthetic fuels is also key to achieving climate targets.

The take-up of electric vehicles has been slow in Germany in comparison to many other markets, but in 2020 the number of newly registered e-cars rose significantly.

A lack of charging infrastructure is one of the main reasons why consumers are holding back on switching to e-cars. The German government recently adopted a law that stipulates the installation of charging infrastructure in new or refurbished buildings. It also announced a new tender for 1,000 new fast-charging points across the nation.

This article first appeared on Clean Energy Wire.