- Germany is officially reviving its electric vehicle subsidy program this month.
- Under the new rules, both long-range electric vehicles and electric vehicles manufactured in China will be eligible for the incentive.
- The country expects more than 800,000 vehicles to benefit from the program.
While the United States has abandoned consumer-targeted electric vehicle subsidies, the rest of the world appears to be delving deeper into the issue. The latest change comes from Germany, which has launched a new incentive program that extends beyond traditional electric cars and plug-in hybrids to extended-range electric vehicles (EREVs) and even Chinese-made vehicles.
The newly announced Berlin programme, reported by Different portsIt gives buyers of new electric vehicles a deposit between $1,700 and $7,000. This figure depends on several factors, including the car’s powertrain and the buyer’s income level, but is intended to help revive stagnant sales in one of Germany’s key industries.
Photography: Scout Motors
For the first time EREVs —Vehicles whose batteries power the wheels and are recharged by a small combustion engine– Will be explicitly eligible under the new program. So do hybrid cars that meet certain thresholds (such as an all-electric range of at least 50 miles and supplemental emissions limits). Perhaps most controversially, there are no rules that exclude Chinese-made cars from subsidies.
Both purchases and rentals are eligible for the subsidy, as long as owners keep the vehicles for 36 months. Basic subsidies for EVs start at $3,500 while basic subsidies for plug-in hybrid electric vehicles (PHEV) and EREVs start at less than $1,700.
Germany prematurely ended its subsidies for electric cars in 2023, causing electric car sales there to decline. The German government hopes this new program will reignite interest in electric vehicles as well as make EVs more affordable sector-wide – especially cars like the VW ID Polo which are promised to start at less than $30,000 before subsidies.
This is huge news for Chinese brands like BYD and Xiaomi Which is looking to expand into markets such as Europe and is the second major victory for the following country this month Canada announced a reduction in customs duties on electric cars made in China.
Germany seems to be ignoring the idea that Chinese brands will outsell their locally manufactured cars.
“I am convinced of the quality of European and German brands,” German Environment Minister Carsten Schneider said at a press conference on Monday. Bloomberg. “I can see no evidence of this supposedly large influx of Chinese car manufacturers into Germany, either in numbers or on the roads – that is why we face competition and do not impose any restrictions.”
Officially, Germany has allocated about $3.5 billion in incentives for the program. This is expected to cover around 800,000 vehicles (including retrospective applicants who purchased after January 1 of this year) and will continue until 2029.
The message the country is sending is clear. Electric vehicle sales will not be revived by ideology or protectionism. Consumers have made clear they want more choice and affordability, and new subsidies may do just that.
