Germany to Cut Subsidies to Electric Cars, Let Them Sell at True Price

27 July 2022, Schleswig-Holstein, Kiel: An electric car is charged at a charging station o
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BERLIN (AP) – The German government plans to reduce incentive payments for buyers of electric cars and end incentives for buying plug-in hybrids at the end of this year.

The government had announced shortly after taking office in December that, starting in 2023, it would only provide payments for electric vehicles that “demonstrably have a positive climate-protection effect.” It unveiled details of the new system late Tuesday.

At present, buyers of electric-only cars are eligible for incentives of up to 6,000 euros ($6,100) and people who buy plug-in hybrids can get up to 4,500 euros.

The economy and climate ministry said the number of electric cars on the road is rising fast, with the total expected to near 2 million this year. They “are becoming ever more popular and will need no state subsidies in the foreseeable future,” minister Robert Habeck said in a statement.

Starting in January, incentives for electric and fuel-cell cars will be cut to 4,500 euros apiece for vehicles with a list price of up to 40,000 euros and to 3,000 euros for cars costing 40,000-65,000 euros.

From September next year, incentives will be limited to private individuals, though the government is considering allowing small businesses and charitable organizations to remain eligible.

From January 2024, incentives will be cut to 3,000 euros for vehicles priced at up to 45,000 euros and scrapped for more expensive cars.

The funding will also be capped, and incentives will end once it is exhausted. German news agency dpa, citing unidentified government officials, reported that the total available for 2023 and 2024 will be 3.4 billion euros.

The government wants to have at least 15 million fully electric cars on the road by 2030. It also aims to step up efforts against climate change by expanding the use of renewable energy and bringing Germany´s exit from coal-fired power forward from 2038, “ideally” to 2030.

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