The CEO of German car manufacturer Mercedes, Ola Källenius, has called for more long-term subsidies for electric vehicles as demand weakens. By the end of the decade, the company wants to have EVs available for “every relevant market segment,” ranging from the luxury S-class to compact cars.
“We are not questioning decarbonisation at all,” Källenius told Süddeutsche Zeitung. However, sales aren’t what the company expected five years ago, with Källenius suggesting long-term purchase incentives to reduce uncertainty for consumers.
He referred to China as a good example of how to promote the use of electric vehicles. “We can learn a lot from other economic regions that work with incentives and subsidies, some of which are further ahead than we are,” he said.
At an industry summit hosted by business daily Handelsblatt last week, economy minister Robert Habeck also said that Germany could do more to boost the market, the newspaper reported.
Habeck suggested a 1,000 euro charging credit when buying used or new electric cars and tax incentives for those on lower incomes.
He also called on Volkswagen to produce affordable electric cars that cost under 20,000 euros. “Your name is Volkswagen (people’s car) and not luxury car,” he said. The average price of EVs has risen considerably over the past two years, slowing adoption.
The famed German car industry like that of other countries is going through the most fundamental transformation in decades and carmakers as well as suppliers struggle to keep traditional business models viable.
Carmaker Ford recently announced it would cut 14 percent of its workforce due to weak European demand for electric vehicles.
Volkswagen, the country’s largest producer, also faces mass walkouts as management and labour bosses fail to come to agreement on how to cut costs, following threats by management to close entire factories and shed thousands of jobs.
Mercedes CEO Källenius said his company will have to make cost adjustments too. “However, we are not planning any compulsory redundancies at Mercedes-Benz in Germany,” he said.