Germany to reduce government incentives to buy electric cars

The German government plans to cut incentive payments for electric car buyers later this year and end subsidies for buying plug-in hybrids.

The government announced shortly after taking office in December that, starting in 2023, it would only provide payments for electric vehicles that “have a positive environmental impact.” It announced late Tuesday. The details of the new system were revealed.

Currently, only buyers of electric cars are eligible for government incentives of up to 6,000 euros ($6,100) and those who buy plug-in hybrids can get up to 4,500 euros ($4,570).

The Ministry of Economy and Climate said the number of electric cars on the road is growing rapidly, with the total number expected to reach close to 2 million this year. Minister Robert Habeck said they are becoming more popular than ever and will not need state subsidies in the near future.

Starting in January, government incentives for electric and fuel cell cars will be reduced to 4,500 euros for vehicles with a list price of up to 40,000 euros and 3,000 euros ($3,045) for cars priced between 40,000-65,000 euros.

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From September next year the concessions will be limited to private individuals, although the government is considering allowing small businesses and charities to remain eligible.

Starting in January 2024, the government subsidy will be reduced to 3,000 euros for cars worth up to 45,000 euros and will be abolished for more expensive cars.

Funding will also be limited. Finance Minister Christian Lindner said on Wednesday that government incentives would end when the final 2.5 billion euros were spent, leaving only tax benefits for buying climate-friendly cars.

And I’d like to add that given the billions in profits for auto companies, such subsidies are no longer needed, I’m counting on market incentives to make electric vehicles cheaper through competition.

The government wants to have at least 15 million fully electric cars on the road by 2030. It aims to accelerate efforts against climate change by increasing the use of renewable energy and moving Germany off coal-fired power from 2038. 2030.

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