The ‘energy crisis is solved’ and the German economy is safe, Bundesbank’s Nagel says
The headquarters of the European Central Bank (ECB) pictured on February 03, 2022 in Frankfurt, Germany.
Thomas Lohnes | Getty Images News | Getty Images
Germany’s energy worries are over and Europe’s largest economy has the “inherent strength” to recover from the dual shocks of the pandemic and the war in Ukraine, according to Bundesbank President Joachim Nagel.
The International Monetary Fund on Tuesday projected the German GDP will contract by 0.1% in 2023, becoming the second worst performer among major economies behind the U.K., before expanding by 1.1% in 2024.
Central to concerns about the economic outlook for Germany and the wider continent over the past year has been the potential for an energy crisis, as Europe strives to curb its reliance on Russian gas following Moscow’s full-scale invasion of Ukraine.
German output decreased by 0.4% in the fourth quarter and is expected to contract again in the first quarter of 2023, entering a technical recession.
Nagel told CNBC on the sidelines of the IMF Spring Meetings that he is “more positive than the IMF” and does not see a recession this year.
“The German economy proved a lot over the past couple of weeks and months, so the adaptation capacity of the German industry is pretty high, the energy crisis is more or less solved. So we had a really worried situation in the past, but this is now over, and the outlook is good,” he told CNBC’s Joumanna Bercetche.
He asserted that Germany’s progress in diversifying its liquefied natural gas supply away from Russia, and its increased storage — resulting from built up capacity during the mild winter — meant the country’s economy is well placed to weather the next cold season as well.
The latest available purchasing managers’ index readings showed German manufacturing, which accounts for around a fifth of the country’s economy, experienced its sharpest fall in activity for almost three years in March and hit its lowest level since May 2020.
However, Nagel claimed that this was down to lingering effects of the Covid-19 pandemic and Russia’s war in Ukraine, insisting that “we shouldn’t forget where we came from.”
“The German industry has a good capability to deal with the situation, there is this inherent strength of the German economy, and I believe they will overcome this, and they will go back to the levels we saw before the pandemic,” he said.
Sticky core inflation
The European Central Bank hiked interest rates by another 50 basis points in March to bring its main rate to 3%, as the continent continues to grapple with high inflation.
Headline inflation across the euro zone fell to 6.9% in March from 8.5% in February, driven by cooling energy costs. But core inflation — which strips away volatile food, energy, alcohol and tobacco prices — increased to an all-time high of 5.7%.
Nagel said the persistence of high core inflation showed the ECB Governing Council, in which he is considered one of the more hawkish members, has further to go in tightening monetary policy.
He expects core inflation to eventually follow the headline figure downwards, but reiterated that policymakers have to “stay really alerted when it comes to the inflation story.”
“What is also important to me, we went through some financial market turbulence uncertainty over the last five weeks and now we have to find out what was the impact out of that, and we have to wait for the incoming data until we have our next meeting in May, and then we will see,” he said.
German banking ‘very robust’
Financial markets were roiled in March by concerns about the banking sector. The collapse of U.S.-based Silicon Valley Bank early last month triggered contagion fears that eventually took down several U.S. regional lenders and led to the emergency rescue of Credit Suisse by fellow Swiss giant UBS.
The ECB went ahead with a 50 basis point hike to interest rates despite concerns about the economic impact of the banking turmoil, and Nagel hopes this sent an important message to markets.
“There is no contradiction between what we have to do on the price stability side and on the financial stability side,” he said.
“We have different instruments to tackle the price issues and the financial stability issues, so it was an important message to the financial market participants that we are very committed when it comes to fighting against inflation.”
Deutsche Bank shares sold off sharply over a few days in March after a sudden spike in the cost of insuring against its default. Analysts largely attributed this to misplaced market panic, but also to concerns about the German lender’s well-documented exposure to commercial real estate, which is considered a particularly weak link in the U.S. economy.
Nagel insisted the German banking system is safe and sound.
“I think we have to be vigilant when it comes for example to the commercial banking sector, but let me take this opportunity to say something about the German banking sector — I think the German banking sector is very robust,” he said.
“I think, compared to 15 years ago, they are much better capitalized, better liquidity situation, so I do not have doubts.”
Although he reaffirmed the ECB’s commitment to fighting inflation, Nagel acknowledged that policymakers “have to be cautious” and keep an eye on parts of the economy that may be affected if rates continue to rise.
Environment
Toyota’s best-selling car may finally go electric: Here’s our first look at the Corolla EV
A fully electric Corolla? Toyota’s best-selling car of all time looks to be finally going electric after the automaker previewed the Corolla EV for the first time.
Is Toyota’s best-selling car getting an electric version?
Since it first launched over 50 years ago, the Corolla quickly became one of the most popular vehicles in nearly every pocket of the globe.
In the late 90s, it even surpassed the Volkswagen Beetle to become the best-selling car in the world, not just Toyota’s.
After holding the crown for over two decades, the Toyota Corolla finally lost its title to the Tesla Model Y in 2023. Although it’s still a top-seller globally, the Corolla appears to be in line for its biggest update yet.
Toyota previewed what appears to be a fully electric Corolla for the first time during a live stream event in Japan on Monday. The commercial showed several “never-before-seen cars” that will be unveiled at the Japan Mobility Show later this month.
One of the concepts shown was a new, seemingly electric Corolla. Outside of the big COROLLA logo on the back, you can hardly tell it’s the sedan Toyota currently has on sale today.
The concept features a closed-off grille and an apparent charge port on the front, hinting it is, in fact, electric. It also draws from Toyota’s latest design theme showcased on new EVs like the updated bZ4X and 2026 CH-R Electric.
It also looks nearly identical to the bZ3, a BYD-powered electric sedan that Toyota has been selling in China since 2023.
Toyota didn’t reveal any other details about the concept, but said the vehicle will appear at the Japan Mobility Show, which starts on October 30, 2025. Press days open on October 29, so check back soon for more info.
Electrek’s Take
The Corolla may be going electric, but don’t expect Toyota to drop the internal combustion engine (ICE) version anytime soon.
Given that Toyota is still standing by its commitment to offer vehicles across all powertrain options, even if it does launch an electric Corolla, it will likely be sold alongside ICE, plug-in hybrid, and hybrid variants.
Either way, an electric sedan would fit in Toyota’s EV lineup, which will include mostly SUVs like the bZ4X (now just the 2026 bZ in the US), CH-R+, and Urban Cruiser.
Would an electric Toyota Corolla compete with the Tesla Model 3? Let us know what you think in the comments.
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![Jetson showcases eVTOL racing concept called the Jetson Air Games [Video]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2025/10/Jetson-eVTOL-racing-hero.jpg?resize=1200,628&quality=82&strip=all&ssl=1)
Personal use eVTOL developer Jetson continues to showcase to the public how exciting an aerial eVTOL racing format can be. The company recently showcased a racing format concept it calls the Jetson Air Games, in which four single-rider Jetson ONE eVTOLs raced head-to-head around a series of pylons during the annual UP.Summit. We highly suggest checking out the video footage below.
Jetson is startup founded in 2017 specializing in electric vertical take-off and landing (eVTOL) vehicles. By developing smaller eVTOLs, Jetson originally hailed itself as the first competitor to provide commercially available personal aerial vehicles to the public.
And it has.
Last month, Jetson completed its first global customer delivery, which included a Jetson ONE for Oculus founder and tech entrepreneur Palmer Luckey.
Before any customer deliveries, however, Jetson had been teasing the idea of using its flagship eVTOL product for racing purposes. In December 2024, the company released footage showing Jetson co-founder and CTO Tomasz Patan demonstrating the precision and agility of the Jetson ONE by navigating around an 8-meter (26ft) tall pylon.
According to a concurrent release, the pylon was a new item that Jetson began producing to encourage and support plans for a new league of eVTOL races. As we pointed out at the time, Jetson’s eVTOL racing idea was nothing new. A team called Airspeeder in Australia has been doing it for years with its own unique eVTOLs it calls “Speeders.”
While Airspeeder has completed eVTOL races, it has yet to do so with actual pilots on board. That’s the goal, but it still hasn’t happened yet, which left the door open for Jetson to be the first with its tech.
Jetson previews eVTOL racing format at UP.Summit
Jetson shared details of its latest milestone following a successful “aerial showcase” at UP.Summit 2025 in Bentonville, Arkansas. Using four Jetson ONE eVTOLs, which at one point formed a “first-ever” four-vessel formation flight, the company introduced the future concept of the Jetson Air Games.
According to Jetson, its Air Games is a new competitive eVTOL format racing designed to “redefine personal air mobility through dynamic aerial sports.” After the four-eVTOL formation (seen above), the Jetson ONE pilots completed a speedy race around the pylons, followed by a solo aerial session by who else but Tomasz Patan, who was also involved in both the formation and the ensuing race. Patan spoke:
Flying for such a large and engaged audience was incredibly special. It was a moment of pride for our entire team and a clear signal that Jetson is ready to lead the next chapter in aviation—and in aerial sport.
Jetson said its eVTOL racing showcase drew plenty of positive feedback from the audience, as well as several investment inquiries. According to the company, its Jetson ONE order is approaching units, representing $75 million in future sales.
The Jetson ONE currently costs $128,000, but the company shared plans to increase that starting price to $148,000, beginning November 3, 2025. As promised, here’s video footage of Jetson’s racing showcase below:
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After the Commercial Clean Vehicle Credit (Section 45W) expired on September 30, the “experts” rushed out predictions of an EV sales slowdown in Q4. But, with over 6,800 pages in the Internal Revenue Code still in play, a turbocharged Section 179 tax credit could still power a strong Q4 for commercial EVs.
The One Big, Beautiful Bill Act (OBBBA) of 2025 gutted America’s energy independence goals and ensuring its auto industry would fall even further behind the Chinese in the EV race, but the loss of Section 45W wasn’t the only change written into the IRS’ rulebook. Section 179, an immediate expense reduction that business owners can take on depreciable equipment assets, has been made significantly more powerful for 2025.
The section 179 expense deduction is limited to such items as cars, office equipment, business machinery, and computers. This speedy deduction can provide substantial tax relief for business owners who are purchasing startup equipment.
The revised Section 179 tax credit (or, more accurately, expense reduction) allows for a 100% deduction for equipment purchases has doubled to $2.5 million, with a phase-out kicking in at $4 million of capital investments that drops to zero at $6.5 million. That credit and can be applied to new and used vehicles, as well as charging infrastructure, battery energy storage systems, specialized tools, and more (as long as they’re new to you).
Work the tax credit
“But wait,” as they say. “There’s more!” A revised Section 168(k) also allows for bonus depreciation on eligible equipment and property, accelerating depreciation for a reduced tax burden.
Fleets can take both the bigger Section 179 and 168(k) bonus depreciation allowances, but Section 179 must be applied first, leaving only qualifying purchases over the $2.5 million limit to be taken in bonus depreciation.
It’s a bit convoluted (what good tax code isn’t?), but these tax incentives are great for businesses looking to buy enough electric equipment assets to exceed the Section 179 spending limit – and, given the new Uber/Tesla semi truck purchase plan, the continued growth of the electric terminal tractor market, and the willingness of several utilities to incentivize both electric commercial vehicles and the deployment of smart EV charging infrastructure, that number may be bigger than you think.
Electrek’s Take Disclaimer
Tax law is weird. Not only are there Federal tax laws and rules that need to be followed, but state and even local county and city rules, as well. As such, you want to make sure they don’t get you the way the got Capone.
Even worse, your favorite journalist (Hi!) is probably an idiot. Get a certified accountant and tax law expert to help walk you through the dirtier details of your specific scenario – but don’t let the complexity of human interaction slow you down, either. The really rich guys you know pay pennies on the tax dollar compared to you and me, because they’re not afraid to ask their accountants for help.
The TL;DR version, though, is this: there’s still plenty of incentives out there for fleet operators looking to electrify their operations.
SOURCES | IMAGES: Equipment World, Investopedia, Volvo.
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