No more funding for hybrids: e-car premium is reduced

In the dispute over the promotion of electric cars, the federal government has now apparently found a compromise. The subsidies are reduced – and then run out completely.

According to media reports, the federal government has agreed on new rules for subsidies for electric cars. According to this, cars with electric drives will also be subsidized by the state beyond 2022. However, subsidization is to be reduced and limited to a specific overall budget.

According to the dpa news agency, which refers to government circles, new cars should initially be subsidized by the state with 4,500 euros if they cost less than 40,000 euros. For new cars whose purchase price is between 40,000 and 65,000 euros, the subsidy premium will then fall to 3,000 euros. In the course of 2023, however, the premium is to be further reduced to 3,000 euros. From the middle of 2023, only cars with a vehicle value of up to 45,000 euros will be funded. The tax advantages of electric cars in the company car regulation should be retained.

According to a report by the “Handelsblatt”, the promotion of plug-in hybrid cars, i.e. vehicles with a combined electric and combustion engine, will expire completely at the end of the year.

Greens insist on coalition agreement

According to the reports, the compromise was negotiated primarily between the Greens and the FDP in the federal government. Finance Minister Christian Lindner (FDP) wanted to abolish the purchase premiums. Economics Minister Robert Habeck (Greens) had proposed that at least the funding for plug-in hybrid cars be canceled earlier than planned at the end of 2022. The coalition agreement between the governing parties stipulates that subsidies for e-cars will decrease, but will not end completely until 2025.

According to the reports, an end to the e-car premium has also been indirectly decided with the procedure that has now been negotiated. Because the funding is to end when a funding amount of 2.5 billion euros has been exhausted. With the premiums that have now been decided, a maximum of around half a million electric cars could be subsidized in the first stage. There are currently around 750,000 purely electric vehicles in Germany.

Which deadline?

According to the reports, it is still unclear when the funding measure will be approved. Previously, that was the day the vehicle was registered. According to the information, this regulation should be retained in order to put pressure on the manufacturers to produce the cars as quickly as possible. Whether there will be an additional manufacturer premium for the vehicles is also still open. Many manufacturers had offered half of the state subsidy, i.e. usually 3000 euros, as an additional bonus for e-car buyers.