If you want to buy an electric car, you have to be prepared for a reform of state subsidies. If you take too much time, you risk going away empty-handed. Subsidies for plug-in hybrids are being phased out completely.
A charging station in Düsseldorf: there will soon be fewer subsidies for the purchase of electric vehicles in Germany.
(dpa) Buyers of electric cars should receive less support from the state in the coming year at the latest – and the subsidy pot should be capped. If you submit your application too late, you risk going away empty-handed. The federal government agreed on this reform of the funding after a long dispute, as the German Press Agency learned on Tuesday from government and coalition circles. Subsidies for plug-in hybrid vehicles are also scheduled to expire at the end of this year. The “Handelsblatt” had previously reported on the agreement.
The funding should therefore continue next year, but only until a total of 2.5 billion euros has been paid out. Two reform steps are planned – in the second step, the state purchase premiums should only be paid out for private cars, no longer for company or tradesmen’s vehicles. In coalition circles, these points were rated as crucial in the compromise.
Lindner wanted to go further
Finance Minister Christian Lindner (FDP) had previously proposed completely abolishing purchase premiums for pure electric cars – in order to save money. The finance minister is insisting that the federal government once again comply with the debt brake suspended in the corona pandemic in 2023. In the coalition agreement, the SPD, FDP and Greens had agreed on a reform of the promotion of electric cars from 2023.
The agreement that has now been reached provides that in a first step the subsidy for cars that cost less than 40,000 euros will be reduced from the current 6,000 to 4,500 euros. For cars that have a net list price of 40,000 euros to 65,000 euros, there should be 3,000 euros instead of the previous 5,000 euros. For plug-in hybrid vehicles, for which there is currently a bonus of up to 4,500 euros, the subsidy is due to expire at the end of 2022.
Plug-in hybrids combine an electric motor and a combustion engine. They are repeatedly criticized by environmental organizations because these vehicles are mainly offered in the SUV segment and are mostly not driven electrically.
A maximum of 3000 euros in the second step
In a second reform step, which according to coalition circles could come in the course of the next year, the subsidy threshold is to be lowered further – a purchase premium should then only be given to buyers of vehicles that cost less than 45,000 euros. The purchase premium should then drop to 3,000 euros per vehicle and only be paid to private individuals.
A subsidy cap could lead to a run on state purchase premiums. Around five billion euros are planned for this year. According to the responsible Federal Office of Economics and Export Control, more than three billion euros in subsidies were paid out in 2021. As of July 1, 2022, more than 1.3 million applications for funding had been submitted – around 554,000 of them to private individuals and around 671,500 to companies. There were also applications from municipal companies, for example.
Economics Minister Robert Habeck (Greens) had proposed in the spring that the subsidy for plug-in hybrid cars be canceled earlier than planned at the end of 2022. According to Habeck’s plans, there should be less money from the state for pure electric cars in the future.
According to the agreement that has now been reached, the tax advantages of electric cars and plug-in hybrids in the company car regulation are to be retained. The Greens in particular are actually in favor of changes here.
FDP parliamentary group leader Carina Konrad said: “The electric car purchase premium is now being gradually reduced to a reasonable level and gradually phased out. It is simply no longer necessary, as shown by the current high number of registrations. In addition, we have to use the scarce budget funds and taxpayers’ money in a targeted and responsible manner.”
Premium should not be linked to approval on the date of purchase
It remained unclear whether an application for funding can only be made once the vehicle has been purchased and registered. The President of the Association of the Automotive Industry, Hildegard Müller, warned against continuing to tie the payment of bonuses to the date of registration. “Due to the additional cap on the subsidy and the unclear award date, the premium threatens to become a gamble for consumers,” she said. The manufacturers are ready to link the payment to the date of purchase.
Overall, the decision to unilaterally and comprehensively cut funding “in times of rising costs and burdens” is incomprehensible, said Müller. ADAC Transport President Gerhard Hillebrand said: “A complete cancellation of the subsidy would have massively endangered the ramp-up of e-mobility, so the agreement on a continuation is correct.” It is unacceptable if consumers who have already ordered a battery-electric passenger car now receive significantly less funding against the background of delivery problems. There must be an inventory.
In mid-2020, the purchase bonus (“environmental bonus”) that had been valid until then was topped up by an “innovation bonus”. The federal government doubled its subsidy, while the manufacturers’ price reductions remained unchanged. This led to a run on the multi-billion dollar funding. The number of new registrations of purely electric cars and plug-in hybrids rose significantly.