Automakers in Germany are offering customer’s significant incentives to trade in older diesels or cleaner new models. This includes domestic manufacturers like BMW, Volkswagen, Audi, and Porsche. Ironically, Ford was the first company out the gate to offer an environmental bonus to German customers who brought in a diesel model older than 2006. Now, local automakers are offering similar bonuses to retain their customers and reduce harmful emissions.
This comes on the heels of the “Diesel Summit” held on August 4 in Berlin between the federal government, state ministers, and trade groups that represented domestic automakers. In the wake of the diesel emissions cheating scandal, the German Chancellor Angela Merkel and the auto industry were facing pressure from environmental groups and city governments to crack down on emissions. Countries like the United Kingdom and France have pledged to ban gas and diesel vehicles by 2040 while cities like London, Paris, Munich, and Stuttgart and considering car bans to reduce harmful NOx emissions that cause health problems in city centers.
It’s safe to say that German carmakers were desperate to stop the bleeding and avoid any more diesel bans or mandatory recalls. In that sense, they won major concessions from the government: automakers will only have to update the software in five million cars. The software fix will reduce NOx emissions by an estimated 30% in relatively new diesel vehicles. Critics of the deal allege that it won’t help with older diesel models that will stay on the road for years to come. It seems like automakers are listening to these concerns and hoping that a market approach will get older vehicles off the road.
Ford is first out of the gate with a €2,000-8,000 environmental bonus for older diesels. Reports indicate that BMW is considering a €2,000 incentive to trade in polluting diesels. Volkswagen, the company that ignited this metaphorical garbage fire of the diesels, will offer up to €10,000 to anyone trading in an old VW model for a clean version. Audi owners will get between €3,000-10,000, and Porsche owners will have to settle for €5,000. Volkswagen is sweetening the pot with a further €1,000-2,380 discount for an electric, hybrid, or natural gas-powered vehicle. Customers have until the end of the year to apply for the rebates.
Whether or not this car-friendly approach will persuade lawmakers and critics that diesel emissions can be reined in without further damage to German automakers remains to be seen, but it’s a big step in the right direction for the beleaguered industry.