In the run up to the German federal election, a new policy brief from a project funded by the European Research Council and involving University of St.Gallen Assistant Professor Adrian Rinscheid has important advice for policymakers: sticking with existing policies to phase out the sale of petrol and diesel cars by 2035 will actually help Germany’s automotive industry.

The policy brief, titled “How phase-out policies strengthen Europe's automotive industry”, pools the expertise of innovation experts from six different institutions including the University of St.Gallen. The authors argue that while the transition to electric vehicles (EVs) is certainly disruptive, it is also inevitable. In the long run, the brief says, delaying the transition away from internal combustion engine vehicles (ICEs) will only harm the German automotive industry by allowing competitors in China and elsewhere to take the lead. 

Stay with phase out plans

“The best thing policymakers can do is to provide investment certainty by maintaining Europe’s ambitious timeframe for the switch to EVs,” says Professor Karoline Rogge, who coordinated the project from the University of Sussex. “Changing gears now will only harm the industry’s international competitiveness.”  

The policy brief also argues that phasing out ICEs should be accompanied by support for suppliers and affected workers. Prof. Adrian Rinscheid from the University of St.Gallen says: “This could include workforce reskilling and job transition programmes, R&D and innovation grants to help ICE suppliers shift towards EV-related components, and support for diversification.”

Implement transition measures

Rinscheid also emphasizes that such “just transition measures” are crucial for securing public acceptance of the shift away from ICEs: “Providing a clear economic path for workers and businesses will help bring people on board and strengthen Europe’s automotive industry for the long term.” 

Rather than weakening phase-out targets, as has been widely discussed, policymakers should support the transformation of Germany’s automotive industry with complementary policies. “Phase-out policies alone won’t secure Europe’s leadership in the global net-zero innovation race,” says Dr Nicholas Goedeking, based at IDOS in Bonn. “A comprehensive policy approach is essential to maintain Europe’s competitive edge.”

With calls for a weakening of the European phase-out policies having become more common, the authors hope that their findings will contribute to a more informed debate on the future of the German and European automotive industry. 

The policy brief How phase-out policies strengthen Europe's automotive industry is part of the EMPOCI project funded by the European Research Council. The project is led by Professor Karoline Rogge, University of Sussex and involves Assistant Professor Adrian Rinscheid at the University of St.Gallen.

Participating academic include: 

• Prof Dr Karoline S. Rogge, University of Sussex and Fraunhofer ISI 
• Prof Dr Adrian Rinscheid, University of St.Gallen
• Dr Nicholas Goedeking, German Institute of Development and Sustainability
• Prof Dr Jörn Hoppmann, University of Oldenburg
• Dr Hauke Lütkehaus, University of Oldenburg
• Prof Dr Daniel Rosenbloom, Carleton University
• Dr Aline Scherrer, Fraunhofer ISI
• Dr Qi Song, University of Sussex

Image: Adobe Stock / Salivanchuk