Newly, the SPD parliamentary group in Germany's Bundestag expressed concerns over the abrupt cessation of electric vehicle (EV) subsidies. Detlef Müller, a SpD deputy, expressed disappointment, claiming that many citizens factored in the premium while purchasing their vehicles. SpD group leaders deemed the sudden stop of funding as unfortunate, urging Climate Protection Minister Habeck to arrange for a smoother transition.
While Habeck announced the December 17 deadline for subsidy applications, the Federal Office of Economics and Export Control (Bafa) would only continue processing applications received by December 31, 2023. This sudden change left millions of e-car buyers and the automotive industry in a state of confusion and uncertainty.
The German Association of the Motor Trade (ZDK) criticized the move, calling it an "unbelievable breach of trust" for ten thousand customers who based their e-vehicle purchases on the assumption that subsidies would remain. Arne Joswig, ZDK president, suggested extending the environmental bonus to the end of the year and collaborating with state and local authorities to keep registration offices open until December 31, 2023. This would allow registrations to be made, ensuring that Germany remains on track to reach its goal of having 15 million battery electric vehicles on the road by 2030.
The abrupt funding withdrawal is expected to significantly impact the EV market, with a 18% decline in sales in 2024[1][4]. The situation has also highlighted the need for a clear government strategy on electromobility, free of short-term budgetary constraints and abrupt changes.
Suggested Measures to Mitigate Impact
- Temporary tax reduction for EV purchases ahead of snap elections
- EU-wide purchase incentives for electric vehicles
- Consistent strategy, clear policies, and transparent rules for new technologies
- Expansion of charging infrastructure and enhanced planning security for EV buyers
Sources: [1] Pieper, J., & IfW, K. (2024). German Government's Abrupt EV Steps Threaten to Undermine Electromobility's Future. Stern. [4] Scholz, O., & European Union. (2025). Unified EV Purchase Premiums to Support Struggling Carmakers. German News.
