Germany Continues to Destroy its Economy

Germany Continues to Destroy its Economy

Germany’s GDP grew by 0.6% in 2019, the weakest economic growth since 2013. But growth in the previous two years had also been anemic at 1.5% and 2.2% in 2018 and 2017 respectively.

Now Germany is about to eviscerate its car industry, its main economic engine.

Here is how CLEW (Clean Energy Wire) summed up the situation:

“The average new car registered in the EU must not emit more than 95 grams of CO2 per kilometre, which corresponds to a fuel consumption of around 4.1 litres of petrol or 3.6 litres of diesel per 100 kilometres. The manufacturers can continue to sell more polluting vehicles, but must compensate these with low or zero emission models if they want to avoid hefty fines that could add up to billions of euros for major car groups.”

(That’s 1.1 gallons of gasoline per 62.2 miles, or 60 miles per gallon.)

Here is how German car mileage performance compares with other European countries and to emission targets.

From CLEW

This transition could destroy thousands of jobs in Germany and expose German car manufacturers to huge fines.

Volkmar Dennernew, CEO of Bosch, a major supplier to the automotive industry, said,  “EU emission rules mean the end of the classic internal combustion engine with corresponding effects on employment in the companies concerned.” He then announced 3,500 job cuts.

McKinsey and Company predicted that 2.2 million BEVs must be sold in Germany in 2021 to meet CO2 targets. It’s difficult to know how many BEVs were sold in Germany in 2019, but it would appear to be less than 50,000. 

Going from 50,000, or even 100,000, to 2.2 million BEV’s sold in 2021 is not likely to happen.

Germany employs around 840,000 people in the manufacture of automobiles. Of these there are approximately 200,000 that build power trains.

There is no way to know how many jobs will be lost within the industry, but a union estimated there would be 100,000 with a rapid transition to BEVs. Proponents of cutting CO2 emissions say there will be new jobs making batteries and charging stations to offset these losses.

Summary

Germany will truly be at a crossroads over the next few years.

Can it go from making a few BEVs to millions of BEVs? And, as a corollary, can they sell the BEVs they make? 

And what happens if they stop making ICE vehicles and only make BEVs in Germany? Can they sell enough vehicles to be profitable?

German car manufacturers sold 3.5 million vehicles in Germany in 2018 and another 1.4 million in the United States, of which around 500,000 were imported. Over 25% of German car sales were in the United States.

If they dismantle their ICE suppliers in Germany they will not be able to export cars to the US. Will they have a supplier network in the US to support manufacturing and selling ICE vehicles here?

If they continue to manufacture ICE vehicles in the United States, how do they support the R & D to keep their vehicles competitive?

And what happens to the German economy as it responds to climate hysteria?

. . .

 

2 Replies to “Germany Continues to Destroy its Economy”

  1. Huh, thinking abut the heritage of the current “leader” – ex E-German where you had to put your name down, years in advance, to get your paws on a messy 2-Stroke Trabant. coming ” FOOL Circle”

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