After the unexpected termination of electric car purchase incentives, customers are now left feeling disappointed. The industry is voicing displeasure and complaining about a deteriorating trust in politics. As a result, the sector anticipates a slower growth in electric car sales. The Federal Ministry of Economics announced on Saturday that applications for the environmental bonus could only be submitted on the following Sunday. The abrupt termination was justified in ministry circles due to budgetary constraints.
The background to this is the Federal Constitutional Court's ruling regarding the federal debt brake. As part of their austerity measures, the coalition leaders of the SPD, Greens, and FDP agreed a few days ago to phase out state funding in the near future. They left the end date unspecified initially.
Rapid termination of e-car subsidies
Initially, the federal government intended to provide a purchase premium of up to 4,500 euros for new cars until the end of the year, distributing half of the bonus to manufacturers, i.e., up to 2,250 euros. January 1, 2024, was set as the date for reducing the state bonus to 3,000 euros, which would subsequently expire at the end of 2024. However, all this is now unattainable.
The primary issue lies in the fact that the bonus is only paid once the vehicle is registered. The signing of a contract is not sufficient. There are often weeks or even months between ordering and delivery.
The government has committed to supporting consumers in purchasing electric cars under certain conditions, said Hildegard Müller, President of the German Association of the Automotive Industry (VDA). "It's unfortunate that these people will now be denied this support since they choose to stick with the registration date rather than the purchasing date of their electric car. This undermines consumer confidence in the dependability of politics."
Müller also criticized the Sunday deadline as excessive. "We strongly encourage the German government and the Bundestag to find a solution as soon as possible that guarantees customers the bonus they had planned for when they bought their car."
Consumer advocates noted that signing a vehicle contract is always legally binding. The Federal Association of Consumer Organizations (vzbv) stated that it would need to be evaluated on a case-by-case basis whether the contract contained provisions that would allow customers to withdraw. This would be the case, for example, if the assumption of the federal share for the e-car subsidy was promised in writing.
Some dealers mean to cover the bonus
Certain car manufacturers are considering or planning to cover the state purchase premium for a transitional period. Stellantis, with brands like Peugeot, Opel, Fiat, Jeep, and others, intends to do this. The company announced it would guarantee the full premium of up to 6,750 euros for electric vehicles that were eligible under the previous guidelines until the end of the year.
In addition, Stellantis intends to accept the originally planned reduced premium of up to 4,500 euros for e-vehicles already ordered and registered by their owners by February 29, 2024. Korean manufacturer Hyundai is still guaranteeing its e-car customers who signed a contract by December 17, 2022, the full environmental bonus from 2023.
Mercedes-Benz announced that for orders delivered and registered by the end of this year, it will pay the manufacturer's share as well as the government's share if the customer no longer receives it from the government. In addition, the Stuttgart-based car manufacturer plans to subsidize orders that will be delivered in the coming year and new orders from January 1, 2023, until further notice with the manufacturer's share originally planned for 2024.
Audi expresses dissatisfaction with the government's breach of trust
The car manufacturer Audi criticized the government for its sudden end of the environmental bonus, stating that it had deeply disappointed trust in the policies. Customers are now revoking e-vehicles they have already ordered. "In the upcoming budget negotiations, we expect a clear commitment to promoting electric mobility and a concession from politicians for affected customers," Audi announced.
Volkswagen expressed "a deep loss of trust," but initially did not comment on any potential higher discounts or goodwill measures. BMW expressed "understanding for the tense budgetary situation and the resulting decisions of the federal government. In the long term, new technologies should support themselves on the market."
Related articles:
- The abrupt termination of the purchase premium for electric cars in Germany resulted in frustration within the automotive industry, particularly in Munich.
- The Federal Ministry of Economics announced that applications for the environmental bonus could only be submitted on Sunday, following the ruling of the Federal Constitutional Court and the coalition leaders' agreement to phase out state funding for electric cars.
- Hildegard Müller, President of the German Association of the Automotive Industry (VDA), criticized the government's decision to deny consumers the previously promised support for electric car purchases.
- In response to the abrupt termination, some car manufacturers, such as Stellantis and Mercedes-Benz, have announced plans to take over the state purchase premium for a transitional period.
- The termination of the purchase premium for electric cars has also affected political parties in Germany, with the FDP accusing the Federal Government of damaging the electric car market and the SPD stating their commitment to supporting the sector.
- The sudden termination of the environmental bonus has caused confusion for consumers, particularly those who ordered electric cars before the deadline but will not be able to register them until after the deadline.
- Industry experts have warned that the termination of the bonus may slow down the adoption of electric cars in Germany, a key market for electromobility.
- The decision to terminate the purchase premium for electric cars has also sparked criticism from consumer advocates, who argue that customers have a legal right to the bonus if they have signed a contract for the vehicle before the deadline.
- The severity of the situation, as well as the implications for electric car manufacturers and consumers in Germany, has raised questions about the government's commitment to promoting sustainable transportation and reducing carbon emissions.
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The sudden end of the purchase premium for electric cars in Germany is primarily due to the government's decision to abolish subsidies for electric vehicles (EVs) in December 2023. This move was part of a broader budget crisis, where the government opted to allocate funds to lower gas prices for citizens instead of continuing EV subsidies[1][2].
The abrupt termination of the purchase premium has led to a significant decline in EV sales in Germany. In 2024, Germany sold fewer EVs than in 2023, despite a global increase in EV sales of 25%[1][2].
German car manufacturers, including BMW, Audi, Mercedes, Porsche, and Volkswagen, are facing financial strain due to the lack of subsidies. They are now at risk of incurring CO2 fleet emissions fines if their emissions exceed certain levels, which could further exacerbate their financial difficulties[1].
Some manufacturers are forced to shut down production lines for EVs and internal combustion engine cars, highlighting the industry's vulnerability to policy changes[1].
The crisis is also impacting consumers, with many hesitant to purchase EVs due to uncertainty and the cost of EVs. The absence of subsidies has made EVs less competitive in the market, particularly when compared to cheaper options available in other countries like China and the United States[1][3].
Clear and consistent strategies for electromobility are crucial in addressing consumer concerns and increasing EV adoption in Germany[2].
In summary, the sudden termination of EV subsidies in Germany has created a challenging environment for both the automotive industry and consumers. The industry is grappling with reduced sales, financial strain, and production issues, while consumers are facing uncertainty and higher costs, leading to delayed purchases and a lack of clear strategy for electromobility.
