Abrupt end to German electric car subsidies fuels doubts about green mobility target

The German government has abruptly ended its electric car subsidy programme in the wake of last week’s agreement on savings to overcome the budget crisis. The economy and climate ministry (BMWK) said in a press release on Saturday (16 December) that applications for the subsidy of up to 4,500 euros for the purchase of a battery-electric car are no longer possible. Payments already approved will be honoured, and existing applications “will be processed in the order in which they are received and - provided the eligibility requirements are met – approved.” The ministry said that a total of 2.1 million electric vehicles had been subsidised under the scheme, with payouts adding up to around 10 billion euros since its inception in 2016. “The funding programme has been very successful and has decisively advanced electric mobility in Germany,” the ministry said, adding the subsidy was due to expire next year anyway.

The budget crisis was sparked in November when the country’s constitutional court ruled that the plan to transfer 60 billion euros to a special fund earmarked for climate and transformation projects was unlawful. In response, the government decided last week to cut spending on climate and transformation projects by billions of euros. Economy and climate minister Robert Habeck had said that the cuts included an earlier end to electric vehicle support, but didn’t specify any details – meaning the  sudden end to the electric car subsidy surprised many. “As the buyer advances the premium and can claim it back [once] the vehicle has been registered, several thousand people are now likely to be quite angry or at least disappointed,” wrote Christina Kunkel in an op-ed for Süddeutsche Zeitung. “Once again, the government is showing people that they cannot be relied upon.”

The government plans to have at least 15 million electric cars on German roads by 2030, but the subsidy cut fuelled fears that this target is out of reach. "The electric car is coming to a standstill," industry expert Ferdinand Dudenhöffer told Focus Online. Dudenhöffer forecast that scrapping the subsidy scheme will lead to a 200,000 reduction in new electric car registrations next year. There was also criticism from within the government parties. Several deputy heads of the Social Democrats parliamentary group told newswire dpa that the subsidy cut was “extremely unfortunate,” and called on Habeck to organise “a more reliable transition.”