6 Nov 19

Germany raises purchase subsidy for EVs

The German government and the country's automotive industry association (VDA) have reached a deal to raise consumer subsidies for purchasing electric vehicles (EVs). 

  • For EVs costing up to €40,000, the subsidy will increase from €4,000 to €6,000. More expensive EVs will get a €5,000 subsidy.
  • For plug-in hybrids up to €40,000, the amount goes up from €3,000 to €4,500. More expensive PHEVs will get a €4,000 subsidy.
  • Unlike previously, these subsidies will now also apply to EVs and PHEVs costing more than €60,000. 

The measure, which will run to the end of 2025, is designed to help Germany move towards sustainable mobility. The aim is to increase the number of EVs on the road to 700,000 units. The cost of the measure will be split evenly between the government and the automotive industry. Germany's long-term target is to have 10 million EVs on the road by 2030. 

The deal coincides with the start of production on the ID.3 (pictured), the first of Volkswagen's fully-electric ID range. The VW factory at Zwickau is projected to produce 100,000 EVs in 2020. The ID.3 will be priced around €30,000. Experts predict it will be the first volume-selling EV in Germany, and Europe as a whole. Other German manufacturers are set to launch a wide range of EVs and PHEVs shortly.

At present, Germany has 47 million passenger cars, of which around 83,000 are fully-electric EVs and more than 408,000 are hybrids. EVs represented 1.68% (31,059 units) of all new cars bought in Germany in the first six months of 2019. Top-selling EV brands included Tesla, Renault and VW. The most popular models included the Tesla Model 3, Renault Zoe and BMW i3. 

The deal between government and industry also aims to increase the number of charging stations, of which Germany currently has 21,000. The aim is to add 50,000 charging stations by 2022. The German car industry will finance 15,000 of these. Chancellor Angela Merkel said she wants there to be one million EV charging points in Germany by 2030.

Authored by: Frank Jacobs