The German government has launched a comprehensive package to protect the climate. The result is key issues paper designed to ensure that climate protection targets are met by 2030. By then, Germany wants to reduce its emissions of climate-damaging greenhouse gases by 55 percent compared to 1990 levels.
By the end of this year, concrete laws are to be derived and passed promptly. Because the climate protection package contains very different aspects, it is worth taking a closer look. These measures are of particular interest to Volkswagen customers and drivers:
CO₂-pricing leads to higher gasoline and diesel prices
In other countries, such as Sweden, it has been on the agenda for a long time and is now also being introduced in Germany: CO2 pricing. For petrol, diesel, heating oil and natural gas, a fixed price for pollution rights is due to be enacted from 2021. In 2021 it will be ten euros per ton of CO2, by 2025 the price will gradually rise to 35 euros.
Later the price for pollution rights is to regulate itself via trading and be determined within a corridor by supply and demand. These pollution rights do not have to be traded by end customers, but by companies that market or supply fossil fuels.
For drivers of cars with internal combustion engines, it therefore becomes more expensive at the gas pump. Even today, more is often paid for additional costs than for the actual product when refueling: 65.45 cents per liter of gasoline costs can be attributed to the energy tax alone, 47.04 cents for diesel. In addition, comes the value added tax.
From 2021, the price at the filling station will rise step-by-step. First three cents per liter, then by 2026 a further nine to 15 cents per liter. Volkswagen customers who, for example, are driving a balance-sheet CO2-free vehicle such as the ID.31 or other fully electric cars will not be affected.
Motor vehicle tax based on CO₂ emissions
Innovations are also planned for the motor vehicle tax. In the future, it will be more closely oriented to CO2 emissions for new vehicles. This means that the more carbon dioxide a new car emits, the more the vehicle owner will be asked to pay. Electric cars will not be subject to any vehicle tax at all until 2025.
E-Purchase premiums to be expanded
Up to now, anyone who buys a fully electric car has received a purchase premium of 4,000 euros (limited to vehicles under €60,000) – half financed by the state and half by the manufacturer. Customers who opt for a plug-in hybrid vehicles benefit from 3,000 euros – also split between the manufacturer and the state. In the climate package, the coalition partners have now agreed to further expand such purchase incentives for environmentally friendly vehicles. An even more attractive purchase premium is to be introduced especially for e-cars for less than 40,000 euros. For the Volkswagen brand, for example, the ID.31 or the e-up!2 fit into this category.
Commuter allowance to be improved
With its climate package, the German government is sending a clear signal in the electromobility direction. For this reason, the coalition partners have not only decided on CO2 pricing, but have also upgraded the commuter allowance. Instead of 30 cents per kilometer between home and workplace, 35 cents will soon be tax-deductible – but only from the 21st kilometer onwards. The project is limited until the end of 2026.
One million charging stations by 2030
By 2030, one million publicly accessible charging points will be available for electric cars in Germany. This should finally help electromobility to achieve a breakthrough. A thoroughly ambitious goal, to the success of which the Volkswagen Group is making a not inconsiderable contribution.
There are currently 1,000 Volkswagen WeCharge charging stations supplied with green electricity by the subsidiary, Elli. A further 4,000 charging stations are to be added by 2025. Many of these stations are located on and near the factory premises of the Group brands, but also in public places. These can then be used not only by employees, but also by external parties.
Anyone who travels longer distances and needs fast charging facilities. The Group covers this relatively small but important proportion of charging operations via Ionity, a company co-founded by Volkswagen. Ionity is responsible for setting up and operating so-called HPC (High Power Charging) stations. They offer a charging capacity of up to 350 kW. By 2020, 400 such stations are to be built throughout Europe – with each station featuring two to twelve charging points. The majority of them will be installed directly at motorway service stations.
The Volkswagen Group is investing some €250 million in expanding the charging infrastructure at its European sites. When combined with the activities at dealerships, this means the Volkswagen Group is providing some 36,000 new charging points in Europe.
Company car tax
Currently, anyone driving a diesel or petrol engine as a company car must pay tax on one percent of the gross list price each month as a non-cash benefit. For drivers of electric cars, this is only 0.5 percent. For a petrol engine with a gross list price of 36,000 euros, this means 360 euros, which are added to the monthly gross salary and thus taxed. In the case of an electric car, in this example this is only 180 euros, which would have to be taxed additionally. The climate protection package provides for a further reduction in company car tax to 0.25 percent for e-cars with a gross list price of less than 40,000 euros. For an electric car with a gross list price of 36,000 euros, this means that only 90 euros will have to be taxed additionally.
Why E-Cars really pay off
The German government’s climate protection package makes driving with electric cars even more attractive. This is illustrated by a comparative calculation:
The initial situation: Peter Müller lives in the commuter belt of a major German city and earns 70,000 euros gross per year. With his company car, a Volkswagen Touran1 with 150 PS, he commutes 30 kilometers to work every day. The list price for his vehicle, including all options, is 36,000 euros.
The costs today: Peter Müller has to pay a 1 percent monthly tax equivalent to the value of his vehicle’s list price (360 euros) plus 0.03 percent per kilometer travelled (10.80 euros) as a non-cash benefit. That is a total of 684 euros. This costs him around 350 euros net per month. In addition, there are costs for taxes and gasoline. With 230 working days a year, Müller alone drives 13,800 kilometers only on the way to work and back. At the stated fuel consumption of 5.8 liters/100 kilometers, he uses a calculated 800.4 liters of fuel. If one assumes 1.35 Euro as an average price for the liter of normal gasoline, 1,080.54 euros become due in the year alone at the gas station. In addition, comes the vehicle tax, for his car which currently lies at approximately 150 euros.
The costs tomorrow: Fuel costs will rise by three cents per liter in 2021 and then gradually rising to up to 15 cents per liter. Then Mr. Müller would pay up to 1,200 euros per year, for gasoline alone, to get to work. Besides with the additional CO2 pricing the vehicle tax will also rise – by how much exactly, is still unclear.
The E-Car: So, it’s no wonder that Peter Müller now wants to switch to an electric car. He is interested in the entry-level version of the ID.32 with 45 kWh battery and 330 km range. It will be launched next year for less than 30,000 euros. Because Mr. Müller does not want to do without its special equipment, we can again expect a list price of around 36,000 euros.
The advantages: As a company car tax, Müller does not have to pay 684 euros per month for this E-Car as a non-cash benefit, but only 171 euros. This costs him around 90 euros net per month – instead of 350 euros for a petrol engine. Because he charges it with electricity at the Volkswagen subsidiary Elli's home Wallbox, he pays around 30 cents per kilowatt hour. The “small” ID.3 is thus “fully-fueled” for only 13.50 euros. It costs only 4.09 euros per 100 kilometers. Mr Müller pays only 564 euros a year for his journey to work – instead of up to 1,200 euros for an equivalent petrol engine vehicle. He is completely exempt from motor vehicle tax until 2025. So, he saves another 150 euros over his combustion engine compatriot.
The result: Although the rising vehicle tax is not yet quantifiable and only the trips to work have been included, Peter Müller saves around 3,900 euros a year.
1 Touran (110 kW/150 PS) Fuel consumption in l/100 km (NEDC): 5.8 (combined); CO2 emissions combined in g/km: 132; Efficiency class A
2 ID.3: The vehicle is not yet for sale
Other means of transport (air, rail)
In order to motivate its citizens to reduce CO2, the state is turning further screws in the transport sector. Rail travel, which is significantly less polluting, should become more attractive compared to CO2-intensive flying – especially on shorter distances. To this end, VAT on long-distance train tickets is to be reduced from 19 percent to seven percent from January 1, 2020. The aim is to make long-distance tickets ten percent cheaper.
In contrast, airline tickets are to become more expensive – especially for shorter flight routes. For routes of up to 2,000 kilometers, the air traffic tax will rise by 74 percent – from 7.50 euros to 13.03 euros. For flight routes amounting to more than this, the levy will increase by 41 percent. Between 2,000 and 6,000 kilometers an increase from 23.43 euros to 33.01 euros is planned, for long-haul flights the levy increases from 42.18 euros to 59.43 euros. This will apply from April 1, 2020.
1 ID.3: The vehicle is not yet offered for sale.
2 e-up (61 kW/83 PS) 1-speed automatic. Power consumption combined: 12.9 – 12.7 kWh/100 km and CO₂ emissions combined: 0 g/km Efficiency class: A+