German consumer groups attack electric car subsidy plans

Car lobby argues that stimulus is needed to catch up with competitors

Charging an electric car. As VW negotiates the terms of compensation, engine fixes and car recalls for its massive fraud in the US, it stands to benefit from a German e-car stimulus programme co-financed by taxpayers and the industry.

Charging an electric car. As VW negotiates the terms of compensation, engine fixes and car recalls for its massive fraud in the US, it stands to benefit from a German e-car stimulus programme co-financed by taxpayers and the industry.

 

German consumer groups have attacked plans for a €5,000 bonus to subsidise the purchase of German electric cars, days after Volkswagen agreed $5,000 in compensation for US drivers of cars with manipulated diesel engines.

Finance minister Wolfgang Schäuble will present his €1.2 billion e-car programme at a high-level meeting on Tuesday evening in Berlin’s chancellery.

It comes amid a leak of an internal Volkswagen report into its diesel disaster, showing the decision to manipulate emissions began almost 10 years ago, in November 2006.

As VW negotiates the terms of compensation, engine fixes and car recalls for its massive fraud in the US, it stands to benefit from a German e-car stimulus programme co-financed by taxpayers and the industry.

As well as €600 million to subsidise e-car purchases, Berlin will spend an additional €400 million to improve infrastructure for e-cars, in particular on-street charging points.

Germany’s grand coalition hopes to have one million electric and hybrid cars on the streets by 2020. At the moment just 50,000 such cars are on the road, compared with 3.2 million regular vehicles.

Transition

Without a state-funded shot in the arm, Germany’s powerful car lobby has argued that they risk losing out to Asian and US makers in the transition to e-mobility.

Consumer groups are unimpressed at the timing of the deal. Ms Marion Jungbluth, energy expert at Germany’s federal consumer agency, said the subsidy sent a “fatal signal” in light of the VW emissions scandal, “the biggest industrial scandal in years”.

Volkswagen promised to release a report into the affair this week before postponing its publication. Leaked versions of the report pinpoint November 20th, 2006 as when a small group of motor technicians and engineers agreed to manipulate on-board software so diesel engines would appear cleaner than they were.

They were under pressure from VW management to develop a motor that, at low cost, met rigorous US emissions standards. But prototypes to date only met environmental standards using a filter that, when used all the time, needed frequent cleaning – and thus costly garage visits.

According to the leaked report, the manipulation had its origin in an engine steering system VW bought in from Bosch, one of the industry’s biggest third-party suppliers.

Peppered with questions about the system by VW engineers, Bosch managers warned in a letter to Wolfsburg that it would be illegal to use their system to distinguish between test and on-street situations.

Warnings

VW engineers ignored the warnings, knowing that on-street engine testing systems are still some years away. According to participants at the fateful meeting in November 2006, the then head of motor development, Mr Rudolf Krebs said: “We will do it, but we cannot allow ourselves to be caught.”

Beginning in 2008 Volkswagen launched its “Clean Diesel” engine to push into the US market, a priority of new chairman Martin Winterkorn, claiming it had developed a system that collected and burned off the noxious nitrogen oxide before it was released into the environment.

Nothing of the sort was happening. Instead the car was emitting nitrogen oxide around 35 times the legal limit; only when the car software recognised it was in a testing situation – the wheels were moving, but the steering wheel was not – did the clean mode operate.

In March 2014 scientists in West Virginia began tests to prove how clean diesel motors could be. By chance they decided to use their Volkswagens for their tests, but were puzzled when on-road tests show 35-times the permitted level of nitrogen oxide.

Tests

When repeated tests ended similarly, they contacted the EPA environmental agency. Word of the irregularity spread to VW and, eventually, to Martin Winterkorn. He was unaware of the cheat software, according to the report, but second-tier managers who were assured the VW chairman the problem was fixable and the EPA concerns not serious.

On September 18 2016 the EPA issued a “Notice of Violation” against VW for manipulating diesel emissions, the group’s share price collapsed and, seven days later, Mr Winterkorn resigned.

As the VW scandal rolls on, forcing the company last week to double its war chest to €16.1 billion, Berlin’s transport ministry has written to all major car companies demanding changes in their engines to reduce harmful emissions Meanwhile Japan’s Mitsubishi has admitted using improper fuel tests since 1991, and falsifying fuel economy data for more than 600,000 vehicles sold in Japan.

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