A few weeks ago, Germany officially announced a new incentive and investment program to accelerate the adoption of electric cars in the country. The most important incentive is a €4,000 discount at the purchase of an electric vehicle, but it is capped to vehicles with a starting price of less than €60,000.
Fast-forward to this week, Tesla is now claiming that the government and German automakers purposely included this base price restriction to exclude Tesla from the program. In its official response on its German website, Tesla writes:
“[the plan] was drawn up jointly with the Chairman of the German automobile manufacturers and the relevant ministries.
Unfortunately, it was decided that Model S and Model X customers wouldn’t benefit from this promotion, because what they call ‘premium’ is linked to an arbitrary price limit. This part of the program is obviously directed against Tesla.”
Tesla is right about the EV plan having been negotiated with German auto industry. Even German Chancellor Merkel was directly involved in the negotiations with executives from BMW, Mercedes-maker Daimler and Volkswagen.
Though there’s no indication that Tesla was directly targeted by the base price limit other than the fact that the cap is €60,000 and the Tesla Model S starts at €82,700 (including VAT) in Germany. Tesla certainly dominates the electric vehicle market in this price range, but by approving similar incentive packages without price cap in the past, there’s been concerns that governments are subsidizing the purchase of luxury vehicles that largely benefit high-income people.
California recently changed its EV incentive program to address those concerns. Therefore it’s not clear at this point if the restriction is coming from the German government or the automakers.
The plan will cost around €1.2 billion and German carmakers are expected to contribute €600 million or about half of the budget. So it could also simply be that German automakers didn’t want to help pay for Tesla’s vehicles in Germany.
The California-based automaker wrote that it is “very disapointed” by the program:
“Promoting sustainability should not be limited to electric cars selected by companies. The customers of all manufacturers should be encouraged, which will help to reduce CO2 emissions and protect the environment. It is important to mention that the Model S and Model X replace cars in segments with the highest CO2 emissions [large luxury sedans and SUVs respectively].”
Interestingly, Tesla announced a new lease to match the benefits of the new incentives. Starting now, you can lease a Model S 70 for €494 a month in Germany.
Tesla added that other than the price cap, which it sees as an unfair treatment, it “supports the federal government’s plan to promote e-mobility”.
Featured Image: Model S by Bjørn Nyland – A close look at the updated Tesla Model S with new front fascia [Gallery & Video]