Germany agrees €3 bln support scheme to make EVs affordable for lower income groups

The German government has agreed to spend three billion euros on a new scheme to support electric mobility adoption among low- and middle-income groups. The scheme, which includes purchase and leasing support, should “open up” the electric vehicle market for all, said vice chancellor and finance minister Lars Klingbeil at a press conference in Berlin.

Sales of electric vehicles in Germany lag well behind earlier government plans to bring the number of EVs on the road to 15 million by 2030. An abrupt stop to purchase support in late 2023 due to financing difficulties led to a sudden drop of EV sales, which have slightly recovered since. The high average price of new electric vehicles is as a major obstacle to their mass adoption, which so far are predominantly used by wealthier groups.

The parties already agreed the scheme, which will be finance through Germany’s Climate and Transformation Fund (KTF), in principle in October. Klingbeil’s Social Democrats (SPD) and the Christian Democrats (CDU) of chancellor Friedrich Merz finalised the scheme in the same meeting in which they agreed to push for a weakening of the EU’s planned end to new combustion engine vehicle registrations in 2035.

Bavaria’s state premier Markus Söder, who heads the CDU’s sister party Christian Social Union (CSU), said the premium for electric vehicle buyers would amount to up to 5,000 euros per car and would also include plug-in hybrids. A focus would be to support “local content” and not cars imported from outside of Europe, Söder added. According to the CSU leader, the scheme could spur the purchase of up to 600,000 vehicles.

News agency dpa, in a report published by ntv, cited figures from a coalition paper, which set the limit for household incomes eligible for support at 80,000 euros annually, and an additional 5,000 euros per child. The basic support should amount to 3,000 euros, which could be gradually increased depending on who is applying. More details on the programme are expected before the end of the year, with a launch set for 2026, the article said.