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CRIME

Politicians irked by more car scrapping premium fraud

Politicians are calling for tighter controls after further reports of criminal misuse of Germany’s "cash for clunkers" car scrapping premium emerged this week.

Politicians irked by more car scrapping premium fraud
Photo: DPA

The BDK criminal investigative alliance reported on Wednesday that up to 50,000 cars have been illegally sold to places like Africa and Eastern Europe instead of being scrapped as agreed.

The popular Abwrackprämie, or car scrapping premium, was part of Germany’s second stimulus plan and gives €2,500 ($3,500) to those who junk a car that is at least nine years old for a new one. The measure has boosted car sales significantly, but reports of fraud are on the rise.

While there is no concrete data for such incidences in Germany, BDK leader Winfried Albishausen told broadcaster ARD on Thursday that his organisation has logged some 200 “coincidental finds” in the port city of Hamburg and in the state of Baden-Württemberg. Selling the cars abroad is an easy way for criminals to make money because there is low risk for being caught, Albishausen said.

Finance Minister Peer Steinbrück has already said the government should look into the misuse of the funds.

Meanwhile, transport policy expert for the pro-business Free Democrats Patrick Döring told daily Bild on Thursday that the government should begin a special commission to stop the fraud.

“Customs, criminal investigators and the Federal Office of Economics and Export Control (Bafa) must conduct more spot checks at scrap merchants,” he said.

Head of the Christian Social Union parliamentary party group, Hans-Peter Friedrich, also called for stricter control on the government funds.

“Those who take part in fraud should know they will be followed without mercy,” he told Bild.

Last month reports surfaced that fraudulent claims on scrap cars from Germany have gleaned millions of euros in the Netherlands, and some of the vehicles are coming from the popular Abwrackprämie.

The car scrapping premium began on February 20 as part of the government’s attempt to stimulate growth after the financial crisis. It was designed to encourage used-car buyers to add their old cars to the scrap heap for new, cleaner-burning autos.

In early March German officials changed the rules for the scrap premium due to fraud because some people were selling their old cars instead of scrapping them. Those who apply for the premium must now provide the original vehicle registration for the scrapped car instead of just a photocopy.

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BUSINESS

Elon Musk visits Tesla’s sabotage-hit German factory

Elon Musk travelled Wednesday to Tesla's factory near Berlin to lend his workers "support" after the plant was forced to halt production by a suspected arson attack on nearby power lines.

Elon Musk visits Tesla's sabotage-hit German factory

The Tesla CEO addressed thousands of employees on arrival at the site, accusing “eco-terrorists” of the sabotage as he defended his company’s green credentials.

With his son X AE A-XII in his arms, Musk said: “I am here to support you.”

The billionaire’s visit came a week after power lines supplying the electric carmaker’s only European plant were set on fire in an act of sabotage claimed by a far-left group called the Vulkangruppe (Volcano Group).

READ ALSO: Far-left group claims ‘sabotage’ on Tesla’s German factory

Musk had said then that the attack was “extremely dumb”, while the company said it would cost it several hundred million euros.

A week on, the lights have come back on at the site, but Andre Thierig, who heads the site, said on LinkedIn that it would “take a bit of time” before production is back to full speed.

Industry experts have warned that the reputational impact caused by the sabotage on the region could be more severe than the losses suffered by Tesla.

Tesla’s German plant started production in 2022 following an arduous two-year approval and construction process dogged by administrative and legal obstacles.

Tesla wants to expand the site by 170 hectares and boost production up to one million vehicles annually to feed Europe’s growing demand for electric cars and take on rivals who are shifting away from combustion engine vehicles.

But the plans have annoyed local residents, who voted against the project in a non-binding ballot last month.

After the vote, Tesla said it might have to rethink the plans. Environmental activists opposed to the expansion of the factory have recently also set up a camp in a wooded area near the plant.

READ ALSO: Why is Tesla’s expansion near Berlin so controversial?

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