SPD parliamentary group wants transition period
The abrupt end of the e-car bonus should be put to the test
December 18, 2023, 11:40 a.m
When it comes to the immediate end of the purchase promotion for electric vehicles, the final word has apparently not yet been spoken. SPD parliamentary group vice-president Wiese makes it clear: The federal government’s agreement is not yet an agreement on the federal budget – the Bundestag does that.
The SPD deputy parliamentary group leader Dirk Wiese would like to reopen and renegotiate the coalition leaders’ budget compromise in the Bundestag deliberations. The main issue is the abrupt end of the e-car purchase incentive and the tax break for agricultural diesel. “We want to take another look here too, because this obviously represents a loss of trust for many,” said Wiese on Deutschlandfunk.
Regarding the electric car bonus, he suggested: “I think it’s worth considering letting it expire and giving those who have already submitted the applications and who have taken this into account in their purchase decision the opportunity to do so.” However, it is clear: “If we now reverse something in the environmental bonus, or perhaps reverse something in agricultural diesel, then it will have to be cut elsewhere. That is now the challenge we are facing.”
With a view to the compromise that Federal Chancellor Olaf Scholz, Vice Chancellor Robert Habeck and Finance Minister Christian Lindner had negotiated after weeks of struggle, the SPD parliamentary group vice-president made it clear: “The political agreement is not yet the agreement on the 2024 federal budget. Because he makes the budget German Bundestag. And that’s why we will now look at all the proposals on the way until the 2024 federal budget is finally finalized at the end of January.”
Consumer advocates only generally welcome the end
The federal government didn’t hesitate for long when it came to the planned earlier end to the state purchase bonus for electric cars and stopped the environmental bonus at the weekend. Since Monday, no new applications for the environmental bonus can be submitted to the Federal Office of Economics and Export Control (BAFA), as the Ministry of Economic Affairs and Climate Protection announced on Saturday. Funding that has already been promised is not affected and will be paid. Applications received by BAFA up to and including December 17, 2023 will be processed in the order in which they are received.
Last Wednesday, the traffic light coalition made up of the SPD, the Greens and the FDP reached an agreement on how to plug billions in holes following the Federal Constitutional Court’s budget ruling. This affects the core budget as well as the Climate and Transformation Fund (KTF), which also finances the funding for electric cars. According to the ministry, e-car funding was originally supposed to expire at the end of 2024 – or before if the funds have been used up.
The German Association for the Environment and Nature Conservation now sees the car industry as having its turn. BUND transport expert Jens Hilgenberg said that German companies are currently refusing “affordable electric cars for the masses”. The ADAC also complained that only three vehicles under 30,000 euros were available on the German market. Hilgenberg said that the BUND generally welcomes the abolition of the flat-rate purchase bonuses for electric cars financed with tax money. Around 10 billion euros in tax money have flowed in recent years.
The consumer advice centers also fundamentally welcomed the earlier end of the purchase bonuses. “Purchase bonuses were important in the short term to stimulate the spread of electric cars,” said the Federal Association’s mobility expert, Marion Jungbluth. In the long term, however, the market ramp-up cannot be financed at taxpayer expense. “However, it must be ensured that at least everyone who has already ordered their electric vehicle with confidence in the funding receives a bonus.” To achieve this, the federal government must make the purchase date the decisive factor.
SPD parliamentary group calls for “real-life transition periods”
The ADAC also criticized the procedure for only making the funding commitment upon registration rather than upon purchase. The decision is particularly bitter for consumers who had ordered an electric vehicle but were unable to register it before December 17th because they had taken the environmental bonus into account.
The SPD parliamentary group is fundamentally in favor of the early expiry of the funding. However, three deputy SPD parliamentary group leaders said: “We find the funding stop on December 17th, which was announced at short notice on Saturday, to be extremely unfortunate.” Climate Protection Minister Robert Habeck must organize a more reliable transition. The parliamentary group vice-presidents Detlef Müller, Matthias Miersch and Verena Hubertz explained: “Citizens expect realistic transition periods from political decision-makers. When purchasing a new car, most people have to calculate very carefully how they can afford it and are assured of the premium planned.”
The Central Association of the German Motor Vehicle Industry (ZDK) also criticized the abrupt end of funding. “This is an incredibly big breach of trust for tens of thousands of customers who have ordered their e-vehicles, provided that the funding is paid,” said ZDK President Arne Joswig, according to the announcement. “The minimum would be to let the environmental bonus run until the end of the year and at the same time, in coordination with states and municipalities, ensure that registration offices remain open until December 31, 2023 in order to be able to carry out registrations.”
Lindner: There was never a guarantee of funding
Finance Minister Christian Lindner said on Sunday evening on the ARD program “Report from Berlin” that it had always been clear that the environmental bonus would expire at some point. There was no fixed end date for the funding. “In this respect, there was never a guarantee of funding, but rather the expiration was clear.”
In order to boost sales, the federal government at the time decided on a purchase bonus in 2016. According to the Ministry of Economic Affairs and Climate Protection, around ten billion euros have since been paid out for around 2.1 million electric vehicles. The funding program was very successful and significantly advanced electromobility in Germany.
According to BAFA, around 376,000 applications for electrically powered vehicles have been received so far this year and 2.4 billion euros have been paid out. The number of vehicles applied for has fallen compared to 2022. This is because since January 1, 2023, only battery and fuel cell-powered vehicles have been funded and no longer hybrid vehicles. In addition, since September 1st, only private individuals can apply for the environmental bonus. In 2022, 3.4 billion euros were approved for 820,000 vehicles.
Money in the pot was probably already tight
The Ministry of Economic Affairs rejected criticism of the quick end on Sunday. “We know that this is an unfortunate situation for those who had hoped to receive funding. But unfortunately this decision was necessary because there is no longer enough money available to be able to consider applications received after Sunday “, it was said. According to ministry circles, the funds for 2023 have been used up. The 209 million euros scheduled for 2024 will probably only be sufficient if the funding expires with immediate effect.
According to information from the German Press Agency, around 1,400 applications are received for review every day, with an average funding of 4,000 euros. Each additional day of application submission could cost the taxpayer around 5.6 million euros. If applications had stopped at the end of the year, funds of around 80 million euros would have been necessary if applications had not increased.
Industry expert Ferdinand Dudenhöffer said: “With the budget crisis, in our opinion, the car industry in Germany is heading into an electric car crisis.” He expects a decline of up to 200,000 electric car sales in Germany in 2024. Without subsidies, electric cars would be significantly too expensive for new car buyers.