The government of the largest economy in Europe, home to such well-known car manufacturers as Volkswagen, Porsche, BMW or Mercedes-Benz, has already does not consider that incentives for the purchase of electric vehicles are so necessary. For this reason, in Germany, starting next year, and in stages, the amount allocated by its aid program will be reduced for more expensive models, which means the beginning of the total elimination of the aid program. Also, remove completely the aid to plug-in hybrids and to the Business.
Starting in 2023, those who buy an electric vehicle that has a price less than 40,000 euros, will be entitled to an incentive of 4,500 euros. This possibility will be maintained throughout the calendar year, because in 2024 the incentive will be reduced to €3,000. Currently, the aid program of the German government assigns these vehicles an economic aid of €6,000.
For vehicles with a price greater than 40,000 eurosthe incentive will be reduced, as of January 1, 2023, from the current 5,000 euros to 3,500 euros. In addition, they are removed completely incentives for electric vehicles with a price over 65,000 euros. In 2024, this threshold will be reduced to €45,000.
The German government’s announcement also includes the removal of all incentives for plug-in hybrid vehicles later this year. A proposal that German Economy Minister Robert Habeck had been defending for some time, due to doubts about the real climate credentials of this technology, which generates heavier vehicles powered by small batteries and often with very little autonomy. Also Subsidies for the purchase of electric vehicles by companies will endso only private buyers will be able to access them.
The German government aid program it will end when 3,400 million euros are reached you have allocated in the budget for the next two years. “Electric vehicles are becoming increasingly popular and will no longer need government subsidies for the foreseeable future,” Habeck said in a statement released by the agency. Reuters. The Ministry of Economy has a clear vision for the future, in which all vehicles will be fully electric, so it hopes that this new plan will be approved without difficulty by the Council of Ministers.
Germany saw a significant jump in electric vehicle sales from 2020 to 2021, reaching 328,000 registrations, a figure that was almost double the previous year. for its roads now more than a million electrified vehicles circulateof which more than 600,000 are fully electric.
The news comes at a particularly interesting time for the German car industry. Earlier this month, the Federal Office for Motor Vehicles reported that new passenger car registrations are down 18.1% from 2021. Volkswagen sales are down 24%, BMW’s are down 9.8%, Mercedes 9.5% and Porsche 3.5% compared to the previous year. Hybrid vehicles reached a market share of 29.1% with 65,363 registrations and fully electric vehicles reached 14.4% with 32,234 units sold. Volkswagen has the largest electric car market share in Germany with 20.3%, followed by Tesla with 11.2%.
It’s a statement, the German Association of the Automotive Industry (VDA) has criticized the subsidy cuts. “In times of rising costs and burdens, the decision to cut funds unilaterally and completely is incomprehensible,” says its president, Hildegard Mueller. She also criticized the decision to exclude company cars, saying “a shift to electric mobility is needed in all fleets.”