German Government Reinstates Electric Vehicle Subsidies
Berlin – The German government will resume subsidies for electric vehicles and plug-in hybrids, reversing a recent suspension and offering buyers a financial incentive of up to €4,500. The move, announced today, aims to bolster demand in the electric car market following a sharp decline after the previous subsidy program ended December 31, 2023.
The reintroduction of financial support comes as the automotive industry grapples with slowing EV sales and concerns about meeting climate goals. While the initial subsidy program proved effective in accelerating EV adoption, its abrupt termination created uncertainty for consumers and manufacturers alike. The new program, though, differs from its predecessor, focusing exclusively on private buyers and requiring a minimum ownership period to prevent ”fast flips” for profit.
Unlike the previous scheme, this round of subsidies excludes corporate customers, who represent approximately two-thirds of new car sales in Germany.It is anticipated that businesses placing large orders may be able to negotiate comparable discounts directly with manufacturers. To qualify for the full €4,500 incentive, vehicles must be priced under €40,000.A reduced subsidy will be available for more expensive models, up to a maximum vehicle price of €65,000.
A key condition of the new program is a commitment from vehicle owners to retain ownership for at least one year.Selling the vehicle before this period elapses will require the return of the subsidy amount. The German government allocated a budget of €2.5 billion for the program, which is expected to run until funding is tired.
Sources: Tageschau.de, Wirtschaftswoche, InsideEVs, auto.cz.