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State subsidies for battery cell production: For information on risks and side effects, please do not consult policymakers or recipients of incentives

April 18, 2019
Not least because they fear that the trend towards electromobility may cause losses in value added and job cuts in Germany, policymakers are debating subsidies for national battery cell production. From a regulatory perspective, supporting local manufacturing would be dubious and comes with high economic risks. On princi-ple, German automakers ought to be better judges than policymakers, both with regard to the indispensability of battery cell manufacturing in Germany and its long-term profitability. The state is not needed, at least not as a source of subsidies. [more]

More documents about "Germany"

267 (217-228)
June 30, 2014
After a good start into 2014, manufacturing output in Germany looks set to grow by 4% in real terms in the full year. Even though business expectations have recently weakened somewhat, they remain in positive territory. Despite the good labour market situation in Germany inflation has decelerated noticeably. The outlook of a recovering global economy, a sliding euro and the introduction of a nation-wide minimum wage in Germany lead us to forecast that inflation is bottoming out. After hitting 1.1% in the current year it could pick up to 1.6% in 2015. [more]
June 26, 2014
Due to numerous political incentives, especially relating to the Renewable Energy Sources Act (EEG), the renewables share has increased sixfold since 1997 with regard to both primary energy consumption and electricity generation. Germany's first energy policy rethink (or Energiewende 1.0) not only sent costs ballooning but also impacted on electricity prices, the generation mix and emissions trading. And despite the EEG the contribution of wind/solar to primary energy consumption (PEC) was a mere 2%-plus in 2013. Overall, the “green electricity share” could reach roughly 60% by 2035. But how will the remaining 40% be generated – in view of the Energiewende 2.0? Depending on the scenario, the onus is more on natural gas or coal. [more]
June 4, 2014
With the dream start into 2014 we have lifted our GDP forecast to 1.8% (from 1.5%). For 2015 we maintain our 2% call, as we expect that the only temporary increase in the sum of gross wages resulting from the introduction of the minimum wage will be offset by more cautious investment spending. [more]
May 26, 2014
The differences between the German automotive industry and the automotive industry in Germany will continue to expand in the coming years – the construction of production capacities in the growth markets is progressing. Expansion abroad does not have to be to the detriment of Germany as an automaking location. However, a stable or even positive development of Germany as an automotive manufacturing location cannot be taken for granted. We outline three potential scenarios for the development of Germany as an automaking location until 2025. In our most likely scenario domestic car output remains at around its current level until then. At the same time Germany benefits from a gradual recovery in western European car demand. In addition, smaller export markets become more important. [more]
May 23, 2014
From the standpoint of potential company founders, an inadequate supply of funding is a key issue especially in a start-up's early phases. Therefore, we welcome the efforts of the crowdfunding movement from an economic perspective, particularly with regard to growth. However, there is an urgent need for action aimed at eliminating the existing information asymmetries and conflicts of interest between company founders, funding platforms and investors. [more]
May 5, 2014
Big data is increasingly becoming a factor in production, market competitiveness and, therefore, growth. Cutting-edge analysis technologies are making inroads into all areas of people’s lives and changing their day-to-day existence. Sensors, biometric identification and the general trends towards a convergence of information and communications technologies are driving the big data movement. Data has a commercial value – therefore the risks should not be underestimated. It is now a question of putting in place the necessary regulatory framework to allow these state-of-the-art methods and the technology that underpins them to properly flourish. [more]
May 2, 2014
Given the continued strong employment build-up and wage increases as well as slight increase in hours worked disposable income should grow by 2.5% even though monetary social benefits and income from self-employment and from investment are expected to rise only at a sub-par rate. Due to the falling inflation rate this allows real private consumption to rise by 1.2% in 2014, and might even have some upside potential. From 2015 the federal government plans to deliver a balanced budget. This year the federal budget will already run a structural surplus. Budgetary risks arise from higher interest rates and a weakening economy, as the budget includes barely any reserves for them while being exposed to potential additional spending on adjustments that need to be made to the minimum subsistence level (basic personal allowance) and children's allowance or for increases that need to be made to infrastructure spending. [more]
April 23, 2014
Industry 4.0 will upgrade Germany as an industrial location by bringing on the fourth industrial revolution. With trade flows becoming increasingly internationally interlinked, the aspects associated with Industry 4.0 of automation, more flexible processes as well as horizontal and vertical integration will become more and more important features of a modern, competitive production structure. Especially for Germany with its particularly favourable basic conditions, Industry 4.0 provides the long-term major opportunity to consolidate the country's leading position in the competitive global marketplace – also relative to the fast-growing emerging markets. [more]
March 11, 2014
The massive expansion of renewables in the last few years has led to an increase in the volatility of the power supply. As the implementation of the "Energiewende" is one of the crucial issues for the new federal government, this also requires innovative solutions that go beyond traditional technical storage facilities in our view. Looking ahead, the energy revolution may hardly succeed without power-to-gas as power-to-gas as a storage medium could offset the continuing strong increases in the volatilities in power supply. The prospects for power-to-gas are favourable. Experts claim the installation of power-to-gas systems with an electricity generation of 1,000 MW by 2022 to establish an initial market. If in the time thereafter – as we expect – the demand for electricity storage media continues to rise as a result of increasing green electricity quantities and fluctuations, power-to-gas is an appropriate answer to the currently still open question as to a sustainable technical solution. [more]
February 28, 2014
The details of the 0.4% qoq GDP increase released this week have not altered our GDP forecast of 1.5% for 2014. If anything, they have added to our suspicion that current surveys (corporate and consumer) might paint a too rosy picture. However, we have turned somewhat more optimistic with regard to 2015, increasing our GDP forecast from 1.4% to 2.0%. [more]
January 27, 2014
We see economic growth in the order of 1.5% this year. Continuously strong private consumption and a rise in investment in machinery and equipment for the first time in two years are expected to lay the foundation for this solid performance. Moreover, we expect net exports to rise slightly as well in light of a global economic recovery. The labour market will remain a fundamental pillar of domestic demand also in 2014. With oil prices still relatively stable and tame domestic price developments, we expect the rate of inflation to come in at roughly the pre-year level of 1.5% on average in 2014. After a nearly balanced public-sector budget in 2013 a slight surplus seems to be in store for 2014, and public debt will likely fall in the direction of 76% of GDP, down from 81% at the end of 2012. [more]
January 23, 2014
Germany pursues ambitious energy and climate policy objectives and is thus a trailblazer in these fields internationally. However, the faltering UN climate protection process shows that other countries are not following Germany's lead or are moving at a slower pace. In Germany, a barely perceptible process of de-industrialisation has already begun in energy-intensive sectors. CO<sub>2</sub> emissions are shifting from Germany to other countries. In order to stop the barely perceptible process of de-industrialisation and carbon leakage, Germany should either join forces with Europe to achieve faster progress and more stringent targets in international climate protection or else curb its own pace. At the very least, Germany has to seek to make its Energiewende more efficient. Moreover, energy-intensive companies are going to require exemption regimes in the future, too. [more]