Billions for buying a car: What the subsidy for e-cars has brought so far

Billions for buying a car
What the subsidy for e-cars has brought so far

By Laura Stresing

The federal government has been subsidizing the purchase of cars with electric or hybrid drives since 2016. Since then, more than eight billion euros have flowed. A million electric cars were bought with the money. But the number of vehicles in Germany is changing only slowly.

Since 2016, citizens have been able to apply for a government subsidy when buying a car with a non-fossil drive. With the funding program, the federal government wants to drive the turnaround in traffic and increase the proportion of electric vehicles on German roads. In fact, the numbers show progress – albeit small.

According to the Federal Office of Economics and Export Control, a total of one million battery-powered vehicles have now been co-financed by the government through the support program. There are also a good 753,000 vehicles with plug-in hybrid drives. In total, the state granted the applicants grants of 8.43 billion euros.

The generous subsidies at the beginning of the support program were often left undone. The data from the Federal Motor Transport Authority (KBA) clearly show that cars with an alternative drive have only been on the road in significant numbers for the past two or three years. In the past year after all, almost every second new registration concerned a vehicle with a non-fossil drive.

It remains to be seen whether the trend will continue this year – especially since the range of subsidies was significantly reduced at the turn of the year. Instead of 6,000 euros, buyers of a fully electric car in the price range under 40,000 euros will only receive a subsidy of a maximum of 4,500 euros as of this year. For more expensive models up to 65,000 euros, the state gives a maximum of 3,000 euros – that’s 2,000 euros less than before. Vehicles with plug-in hybrid drives are no longer funded.

The changed framework conditions are not without effect: In December 2022, the proportion of e-cars in new registrations that had previously been eligible for subsidies had risen to a record-breaking 55.4 percent. More than two thirds of the cars registered this month had an alternative drive. In January 2023, on the other hand, cars with petrol or diesel engines were again clearly in the majority at a good 60 percent.

In a long-term perspective, such short-term fluctuations are hardly significant. Despite increasing demand and an increasingly attractive range of e-cars, their share of the vehicle stock is still extremely small: a good 48.7 million 63 percent of cars registered in Germany run on petrol, just under 30 percent on diesel and only 1.72 percent purely electrically. Hybrid vehicles and plug-in hybrids have a share of 4.38 percent (as of October 2022).

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