What Needs to Be Done to Promote Electromobility in Germany

Tasks

Politicians should abolish the electricity tax in order to promote electric mobility in Germany. This is the recommendation of a brief expert report by the ifo Institute for the Chamber of Industry and Commerce for Munich and Upper Bavaria. "This could make the transition to electromobility more affordable," says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies. At the same time, politicians should do without sector-specific subsidies, such as purchase premiums or a subsidized electricity price for charging electric cars.

“Subsidizing the price of electricity for electric cars reduces the incentive to save electricity and thus exacerbates shortages in other sectors," says Clemens Fuest, President of the ifo Institute and co-author of the short study. For effective climate protection, the authors recommend relying on a uniform CO₂ price in EU emissions trading. Further country- and sector-specific measures undermine emissions trading and lead to expensive double regulation.

Politicians should also work to generate more electricity, including through greater integration of the European electricity markets. "To prevent voltage fluctuations from leading to blackouts, intelligent electricity meters, so-called smart meters, and better grid monitoring are needed in addition to the expansion of distribution grids. Electric car owners must be given price incentives to charge their electric cars when there is sufficient electricity available," says Falck.

Manfred Gößl, Managing Director of the Chamber of Industry and Commerce for Munich and Upper Bavaria, states: "For the expansion of electromobility and for the energy transition as a whole, it is clear that cheap electricity is the most important and simplest control and incentive instrument. Electricity must become cheaper in relative terms and politicians must pull out all the stops to achieve this, from the abolition of the electricity tax to the massive expansion of generation capacities and transmission grids."