The abrupt end of the government purchase bonus for electric cars caught dealers, manufacturers and buyers off guard. “When I read the breaking news on Saturday, my jaw immediately dropped,” says Marco Oestreich, studio manager at Genesis, a premium brand of the South Korean Hyundai Group. The store on Theatinerstrasse opened two years ago for the IAA automobile trade fair.
So now it was Saturday, December 16, 2023. It was supposed to be a busy day for Oestreich’s team. “We immediately contacted all customers who would be getting an electric car from us this year,” says the car seller. Most people didn’t know about their bad luck: Anyone who didn’t quickly submit a funding application to the Federal Office of Economics and Export Control (BAFA) by 11:59 p.m. on Sunday would come away empty-handed. So Oestreich and his people helped customers on the phone on Saturday to submit their applications online.
New electric cars with a list price of less than 40,000 euros were recently subsidized by the state with 4,500 euros. There was also a manufacturer bonus of 2250 euros. For more expensive electric cars with a price of up to 65,000 euros, there was 3,000 euros from Bafa and 1,500 euros from the manufacturer. Private customers used the funding to reduce their leasing rates or the cash price.
Anyone who didn’t manage to claim the bonus in time but ordered an eligible car by December 16th will receive the full state share plus the manufacturer’s share from Genesis – if registered by December 31st, 2023. It’s something like that Most manufacturers temporarily subsidize the purchase of a new electric vehicle generously.
“Fortunately, our customers are quite relaxed,” says Oestreich. The luxurious models from Genesis, Polestar, Tesla and others that can be seen in the shop windows of the Munich stand often had prices that were too high for funding anyway. For an electric mid-range representative from Genesis, the GV70, you have to spend at least 70,000 euros; with full equipment it is even 84,000 euros. In return, you not only get an ecologically clean conscience, but also a car designed by the Belgian Luc Donckerwolke. Donckerwolke was already head of design at Lamborghini and Bentley.
But the low mood that the funding stop has caused is also affecting luxury manufacturers. “We sense a lot of uncertainty among customers,” says Frank Mäling, Head of Sales Germany at Polestar. “If you want to drive forward such a transformation of mobility, then you need one thing: planning security. That has been taken away.” Polestar has decided to continue paying out the manufacturer’s share of 1,500 euros upon receipt of orders until December 31, 2023. His cars are too expensive for full funding. There is only money available for the company’s volume model, the Polestar 2. The prices of the models 3 and 4 are outside the former funding range.
Test sitting and advice at Polestar in the Hofstatt, where you can see the onion domes of the Frauenkirche through the shop window behind the Hirmer car park.
(Photo: Robert Haas)
In the showroom there is a snow-white Version 3 with an output of 517 hp, a range of 560 kilometers and animal welfare-compliant nappa leather seats. Cost: 105,700 euros. Anyone who spends that much money on a car doesn’t need any help from the government. Polestar was founded in 2017 by Volvo Cars and Geely Holding. The Swedish company not only targets customers who want to protect the climate, but also technology and design-loving car fans who are looking for driving fun.
Is the combustion engine the better alternative?
The electric bonus shock is likely to hit buyers of inexpensive and economical models harder. The ADAC recently listed 30 recommended small electric cars, led by Dacia Spring Electric, Renault Twingo and Fiat 500e, whose basic prices are under 30,000 euros. Anyone who buys such a sensible car was probably expecting the environmental bonus and is now disappointed. Worse still: drivers who come too late for the subsidized electric party are now more than ever likely to ask themselves whether they should wait until more powerful electric cars become cheaper – or whether a combustion engine is the better alternative.
The latter still dominate the streets in Munich. In 2023, 57,506 pure gasoline engines and 24,176 pure diesel engines were newly registered in the city by December 18th. 18,435 new cars powered exclusively by batteries were registered, as were 8,302 plug-in hybrids. There are also 39,563 vehicles with other drives such as gas, hydrogen or so-called mild hybrids. These are cars with an internal combustion engine that is electrically assisted to increase performance or save fuel.
A total of 716,598 cars were registered in Munich as of December 18th, of which 182,303 were diesel, 410,434 gasoline, 34,306 pure electric cars, 29,362 plug-in hybrids and 123,861 others.
The fact that the people of Munich are still a bit unfamiliar with electromobility is probably not just due to the high prices of electric vehicles. The charging infrastructure is also lagging behind the goals of the drive transition: those who live in the city center and do not have private charging options are dependent on public charging points. There are currently 1,200 of these operated by the municipal utilities at around half as many charging stations. There are also around 300 charging points from other providers, such as supermarkets.
For comparison: While the number of purely electric cars has increased more than tenfold since 2018, the number of charging points has only increased fivefold. Unlike at a gas station, it is not worthwhile for e-car drivers to wait at an occupied charging station. The vehicles sometimes hang on the cable there for several hours. Even at a quick charging station it still takes about 30 minutes, so no one stands on the side of the road with hazard lights on.
“People want SUVs, so we build them – just as affordable and sustainable as possible,” said managing director Henrik Fisker at the opening of the e-car showroom on Kaufingerstrasse.
(Photo: Robert Haas)
Because the city council has decided to increase the proportion of electric cars, it decided in 2018 to offer significantly more charging options in public spaces. The Department of Health and Environment responsible for e-mobility at the time, which no longer exists in this form today, wanted to award the planned 2,700 charging stations to a single provider and then launched a tender. It dragged on for several years, only to fail in court in November of this year because it was legally incorrect.
The mobility department is now responsible for the award; according to the authority, a tender is no longer necessary. But it won’t be that easy with more public charging stations. The mobility department says that space in the city is limited. That’s why we’re betting on more charging stations being built on private property.
How this will work is still unclear. The mobility department says it is working on an “overarching concept” that should explicitly take private space into account. At the beginning of 2024, very soon, a draft resolution and thus a master plan for the rapid development of charging infrastructure will be presented to the city council.