Germany plans $2.3B in aid to help auto industry tech shift, report says

BERLIN -- Germany has agreed to a 2 billion euro ($2.3 billion) aid package to help the country's automakers and suppliers switch to greener engines and automated driving, according to an economy ministry paper seen by Reuters on Monday.

Under the program, which is scheduled to take effect next year, the government plans to distribute grants to key industry players by 2024.

It will also use the funds to promote R&D in areas including the digitalization of supply chains, 3D-printing, the shared use of production data and to give support to so-called clusters of companies to train employees.

The government plans to cover up to 60 percent of the costs for large companies and 80 percent for small and midsize companies of making production facilities more environmentally friendly.

"The switch to new products, especially in the field of e-mobility, requires an adjustment of production," the paper says. "Faster innovation cycles demand more flexible production facilities. The cost pressure in production is high."

The program is part of Germany's economic stimulus plan aimed at cushioning the effects of the coronavirus crisis.

The economy ministry's proposal will now be put to other ministries for consultation.