Getting to the End of the Road for Electric Car Subsidies
The German government is pulling the plug early on its financial support for electric cars. The state purchase bonus and environmental bonus for e-cars will say their goodbyes at midnight on December 17, 2023, leaving no new applications for the environmental bonus from then on. This announcement was made by the Ministry of Economic Affairs and Climate Protection in Berlin in response to the budget ruling.
Timely Processing of Applications
While the curtain falls on the subsidy program, applications that have already been made up to and including December 17, 2023, will be processed as they come, keeping the order unchanged. The already-approved subsidies will also remain unaffected by the end of the program.
Budget Crunch Forces Early Exit
This sudden exit was initially set to occur at the end of 2024, but the government was forced to act in light of the budget gaps emerging after the Federal Constitutional Court's ruling. With the Climate and Transformation Fund (KTF) funding as the primary source for e-car financing, a revised budget plan was urgently needed, and the traffic light coalition of the SPD, Greens, and FDP quickly reached an agreement.
Consumers Gain Clarity
Consumer associations had repeatedly asked for information concerning the earlier end of purchase premiums. The clear message coming from the government now provides, as Marion Jungbluth from the consumer association agrees, a sense of certainty for individuals planning on purchasing an electric vehicle before Christmas.
Potential Impact on E-car Sales
However, it could be a different story for e-car sales in Germany. As stated by industry expert Ferdinand Dudenhöffer, the market may face a drop of up to 200,000 e-car sales in 2024 without subsidies. This is because electric cars are still perceived as a significant investment without the financial assistance.
A Decade of Successful Support
The decision to abolish the subsidies comes after the German government introduced a purchase premium in 2016. Over the course of six years, around ten billion euros have been doled out to around 2.1 million electric vehicles, significantly advancing electric mobility in Germany.
Adjustments to Eligibility Criteria
The eligibility criteria for electric vehicles have changed multiple times, with hybrids being removed from the list of eligible vehicles since January 1, 2023. Since September 1, private individuals were the only ones allowed to apply for the environmental bonus. The decline in applications can be attributed to these changes, with 820,000 vehicles being approved in 2022 compared to 3.4 billion euros.
Environmental Bonus's Final Chapter
With the environmental bonus now discontinued, individuals wishing to purchase an electric vehicle should make their applications to the Federal Office of Economics and Export Control by midnight on December 17, 2023. Failure to do so may result in a missed opportunity to receive the incentive.
The Future of Electric Cars in Germany
As the end of the state purchase bonus and environmental bonus looms, there's speculation about the future of electric cars in the country. Car production, especially battery-electric vehicle production, is expected to grow, while car exports are projected to increase. This optimistic outlook is driven by regulations mandating lower CO2 emissions and changing consumer preferences.
