Environmental Impact of Subsidy Concepts for Stimulating Car Sales in Germany

In 2020, vehicle sales decreased dramatically due to the COVID-19 pandemic. Therefore, several voices have demanded a vehicle subsidy similar to the environmental subsidy in Germany in 2009. The ecological efficiency of vehicle subsidies is controversially discussed. This paper establishes a prognosis of the long-term environmental impacts of various car subsidy concepts. The CO2 emissions of the German car fleet impacted by the purchase subsidies are determined. A balance model of the CO2 emissions of the whole car life cycle is developed. The implementation of different subsidy scenarios directly affects the forecasted composition of the vehicle population and, therefore, the resulting life-cycle assessment. All scenarios compensate the additional emissions required by the production pull-in within the considered period and, hence, reduce the accumulated CO2 emissions until 2030. In the time period 2019-2030 and for a total number of 0.72 million subsidized vehicles-compensating the decrease due to the COVID-19 pandemic-savings of between 1.31 and 7.56 million t CO2 eq. are generated compared to the scenario without a subsidy. The exclusive funding of battery electric vehicles (BEVs) is most effective, with an ecological break-even in 2025.