German government wants to subsidize the car industry considerably

The German Ministry of Finance wants to subsidize the car industry for almost € 2 billion, according to documents Reuters in. The subsidy is mainly intended to contribute to the greening and modernization of factories.

To be precise, the amount of the total subsidy from the German government amounts to € 1.97 billion. The goal is to distribute this game among key industry players by 2024. These are not only the manufacturers themselves, but also suppliers. With the money they can make their factories more efficient and sustainable. For large companies, the government covers up to 60 percent of the costs. Smaller companies can reclaim 80 percent of their investments.

The subsidy scheme is part of the German government’s plan to dampen the effects of the corona virus on the economy. The main reason given is that manufacturers must invest in order to ultimately reduce the total cost of production. “The switch to new products, especially in the field of electric mobility, requires an adjustment in production,” the document states. “Faster innovation cycles require more flexible factories. The pressure to reduce production costs is high. ”

The proposal of the Ministry of Finance is now being submitted for consultation to other ministries. Later, the German government will probably provide more information about what this plan will look like in practice.

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