The German Ministry of Transport plans to significantly increase and extend car purchase subsidies for pure electric vehicles and fuel cell vehicles until 2027. If a customer buys an electric car that costs more than 40,000 euros, he can enjoy a discount of up to 10,800 euros, a percentage of up to 25%, from the previous discount of 6,000 euros.
At the same time, carmakers can also receive a subsidy of 3,000 euros for each electric vehicle they sell. Manufacturers can receive a subsidy of 8,400 euros per car if the car sells for more than 60,000 euros, well above the government's current commitment of 5,000 euros.
However, starting in the second half of 2023, consumers will only receive the full subsidy if they scrap an internal combustion engine vehicle that is more than 11 years old. In addition, it is also hoped that the subsidy for plug-in hybrid vehicles, which originally ended this year, will be extended until 2024, but the subsidy will be halved to 2,250 euros and 1,875 euros, respectively, depending on the price of the vehicle.
The report pointed out that by 2027, Germany may spend as much as 73 billion euros in the electric vehicle subsidy program, which is even close to the Bundeswehr investment budget.
The new government plans to accelerate the transformation of new energy vehicles, with the goal of 2030, when the number of electric vehicles in the German market will reach 15 million (the number just exceeded 1 million last year).
But the coalition government agreement stipulates that subsidies for electric vehicles should expire in 2025, when the government expires. In addition, the agreement calls for parties to commit to continuous reductions in subsidies.
However, the Ministry of Transport is facing huge pressure to reduce emissions: Germany's "Federal Climate Protection Act" stipulates that various industries should continuously reduce annual emissions, but even in the case of the new crown epidemic, the carbon emissions of the German transport sector will remain unchanged in 2021. On the contrary, it increased by 1.2% from the previous year to about 148 million tons.
The Ministry of Transport therefore wants the coalition government to be more flexible on car subsidies to bridge the goal of achieving carbon neutrality.
