Germany will eventually ban new diesel cars, a positive step for future electric vehicle (EV) demand in the country. Chancellor Angela Merkel made the comment during a recent interview with Super Illu magazine.
Merkel said Britain and France’s plans to phase out internal combustion engine vehicles by 2040 is “the right approach,” but did name an exact year for a similar German ban.
She added that tax breaks will remain in place for diesel vehicles because they emit less carbon dioxide than gasoline-powered vehicles. In the interview, she also commented on the Volkswagen (ETR:VOW3) diesel emissions scandal, saying it is up to the company to regain the public’s trust. Merkel’s comments come ahead of a national election in September, where she is seeking a fourth term.
In May, Merkel attended a groundbreaking ceremony for Daimler’s (ETR:DAI) electric car factory and said the country and its automakers must invest heavily to ensure “that electric mobility is ready for the market as quickly as possible.” Germany has lagged in EV industry development, and Merkel has said the country will likely miss its target of bringing a million electric cars onto roads by the end of the decade.
EV demand is growing worldwide as countries begin to implement tighter emissions regulations to curb pollution. The race is on to produce and capitalize on emerging demand for lithium-ion batteries, which power the cars.
In early August, German firm Terra E announced that it would chose one of five sites in Germany or a neighboring country as a location for its 34-GWh lithium-ion battery factory. The company plans to break ground in Q4 2019 and will reach full production in 2028. In Nevada, Tesla’s (NASDAQ:TSLA) gigafactory has already begun production; China is expected to control 65 percent of all battery production by 2021.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.