Toyota Takes Flak in Germany for Backing Anti-Diesel Group

Toyota Motor Corp. is facing mounting criticism in Germany for supporting an environmental group that has forced partial diesel bans in some of the country’s cities.

The company has helped fund Environmental Action Germany for 20 years, The Nikkei reports. But now politicians are accusing Toyota of using the group to give its gasoline-electric hybrids a competitive advantage over the diesels that German carmakers build.

EAG has won several lawsuits that order cities to ban older diesels as part of an effort to meet European Union air quality standards. One branch of the Christian Democratic Union party is considering a motion demanding that the federal government drop subsidies to EAG.

The far-right Alternative for Germany party also has suggested that Toyota is influencing EAG. But the group tells The Nikkei that the funding it receives from Toyota—roughly €50,000 ($57,000) per year—hasn’t stopped it from suing Toyota 47 times for breaching German consumer protection regulations.

Demand for diesels in Germany last year plunged 13% to 1.3 million units and fell 19% this year through October, according to industry reports. Hybrid sales jumped 76% to 85,000 units last year and 57% in the first 10 months of 2018.

Toyota’s sales in Germany are growing faster than the market overall. But the company controls less than 3% of new-car sales in the country.