Green Cars and Economic Stimuli

Heard on the morning news that the German $66B economic stimulus package passed today also includes a measure to encourage people replace their cars. It is sort of understandable as a short term measure, as their economy is quite reliant on the infamous German car makers who, of course, are looking at a bleak 2009. Still if you think of, say, a few million germans rushing to buy new cars and dump their (probably well-running) existing ones — doesn’t sound that reasonable from long term environmental damage point of view.

I looked it up, and it comes out that…

Other measures include a 2,500 euro payment for drivers who buy a new low- emission car.

Now, depending on what “low emission” means in this case the measure could work either way – for German manufacturers or for the environment. For some reason I doubt that these two goals could be obviously achieved together, or at least perceptionally “green” and “german” are not the first semantic associations that pop into mind as a bundle when thinking about cars…

Toyota announced their new Prius yesterday. Looking slightly better (but not beautiful), adding a few interesting innovations (such as solar-paneled moonroof that generates power for the ventilation on hot days) and less than 5l/100km (50mpg) fuel consumption it is a worthy upgrade to what has already been a great if somewhat quirky car till now.

Toyota basically owns the hybrid car market, claiming 91% market share in Europe in 2006. So putting one and one together – to what extent will the German government be supporting the Japanese economy instead of their own with their new car purchase support measure?