Volkswagen Chief suggests that the German Government Should End Subsidies on Diesel Cars

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Volkswagen Chief suggests that the German Government Should End Subsidies on Diesel Cars

Volkswagen CEO suggested this week that the German government should consider phasing out the subsidies that encourage Europeans to buy diesel cars, which is a dramatic change of position by VW considering it was largely responsible for diesel’s popularity in Europe. Matthias Müller, the chief executive of Volkswagen, said:
“We should question the logic and purpose of diesel subsidies,”. He went on to say,

“The money can be invested more sensibly to promote more environmentally friendly technologies.”

This is the first German auto boss to publicly suggest that the German government should stop subsidizing diesel vehicles. These comments by VW, constitute a major turnaround. If this happened, it would be a step that would certainly hasten the technology’s demise.

Diesel was practically sacred to German car manufacturers until recently but sales of diesel cars have been plummeted since Volkswagen confessed in 2015 to widespread cheating on emissions tests, a scandal that drew attention to the health hazards of diesel exhaust.

Mr. Müller’s statement caused a minor sensation in Germany. For example, a transportation expert for Greenpeace, the environmental activist group, Tobias Austrup, said in a statement.
“The government is being urged to phase out diesel subsidies by none other than the biggest diesel fraudster,”

Volkswagen Chief suggests that the German Government Should End Subsidies on Diesel Cars

A professor at the University of Duisburg-Essen, Ferdinand Dudenhöffer, who has frequently been critical of Volkswagen, said that “if there was a Nobel Prize for company bosses, Müller would earn it.”

Until last year, more than half of all cars sold in Europe were diesels, which were marketed as being not only economical but also environmentally friendly. Diesel, though has been losing popularity after studies by the governments Britain, France and Germany showing that diesel cars from almost all manufacturers polluted much more than advertised.  Scientific evidence has shown plainly that nitrogen oxides from diesel fumes can cause asthma and lung cancer.

Mr. Müller went so far as to say that he was in favor of banning older diesels from city centers. But he said such restrictions should not apply to newer diesels that meet stricter standards on nitrogen oxide emissions.

Previously, Mr. Müller and the chief executives of BMW and Daimler insisted that diesel engines with the latest anti pollution equipment were clean and that the technology still had a future.

Diesel has been an integral of German the German car manufacturers plans for years, with companies like Volkswagen being among the first manufacturers to offer affordable diesel passenger cars that did not smoke and rattle making diesel cars the most popular choice for European motorists.

If diesel were taxed at the same rate as gasoline, Professor Dudenhöffer said, the German government would collect 8 billion euros, or $9.4 billion, more in revenue.
“Diesel is not the future, it’s the past,” he said. “It makes no sense to spend billions of tax money on the technology.”


Justin Kavanagh
Justin Kavanagh is a recognised leader in automotive intelligence and vehicle data supply to the entire motor industry. He has almost 20 years experience in building systems from the ground up. As the Managing Director of Vehicle Management System, he understands the need and importance of trustworthy and reliable vehicle history and advice to both the trade and the public.
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