According to foreign media reports, on July 26, local time, the German Economy Ministry said that after an agreement within the German ruling coalition, subsidies for electric vehicles will be reduced next year.
German Deputy Chancellor and Minister of Economy and Climate Protection Robert Habeck said in a statement: "Electric vehicles are increasingly popular and government subsidies will no longer be necessary for the foreseeable future."
According to the plan, the current subsidy for pure electric vehicles below 40,000 euros is 6,000 euros, which will be reduced to 4,500 euros at the beginning of next year, and will continue to be reduced to 3,000 euros next year. The current subsidy for electric vehicles above 40,000 euros is 5,000 euros, which will be reduced to 3,000 euros early next year. There is no subsidy for electric vehicles above 65,000 euros, and this rule will also apply to electric vehicles above 45,000 euros from 2024.
Reuters reported that Germany scrapped electric vehicle subsidies because the 3.4 billion euros allocated from the budget for the next two years had been used up.
Habeck has previously said: "We want to focus on promoting electric vehicles in the future and pay more attention to climate protection. We believe that there is a market for plug-in hybrid vehicles and no longer need public funding."
The German Association of the Automobile Manufacturers took a different view of the government's plan, saying plug-in hybrid vehicles still play a vital role in the popularization of electric vehicles. Plug-in hybrid vehicles are the vanguard of the transition to electric mobility, said Hildegard Müller, head of the agency. Stopping subsidies for plug-in hybrid vehicles would "jeopardize the development of electric vehicles and ignore the reality of German consumers". The move would also be devastating for consumers, Mueller said, and would slow the auto consumer market's move toward eco-friendly vehicles.
The analysis pointed out that Germany will reduce subsidies for electric vehicles from next year, and future subsidies will focus on smaller and cheaper electric vehicles. This move may impact Tesla, and sales of Mercedes-Benz and BMW may also be affected.
Data show that sales of pure electric vehicles in Germany in 2021 will almost double year-on-year to 328,000, thanks in part to the above-mentioned plans. There are currently more than 600,000 electric vehicles in use in Germany. If hybrids are included, the figure is over a million.
Data show that sales of pure electric vehicles in Germany in 2021 will almost double year-on-year to 328,000, thanks in part to the above-mentioned plans. There are currently more than 600,000 electric vehicles in use in Germany. If hybrids are included, the figure is over a million.
However, the German new car market continues to face challenges. German new passenger car registrations fell 18.1% year-on-year to 224,558 in June, marking the fourth straight month of declines in car sales in the country. New car registrations in Germany fell 11 percent to 1,237,975 in the first half of the year.