Tesla’s continued issues with the German government over electric vehicle incentives are now impacting buyers retroactively as some are being asked to pay back the part of the €4,000 EV incentive that they received from the government.

The automaker is appealing the decision and confirmed to Electrek that it will cover the cost of the incentive until it is resolved.

Last year, Tesla buyers lost access to EV subsidies in Germany after being accused of gaming the system.

When Germany introduced its new plan to boost electric vehicle adoption through new incentives, including a €4,000 discount at the purchase, Tesla claimed that they were purposely left out of the program because of a cap on vehicles with a starting price of less than 60,000 € negotiated by the government and the German auto industry.

Tesla wasn’t being a crazy conspiracy theorist by claiming that German automakers had a hand in this since the government did indeed negotiate the structure of the incentive with German automakers because both public money and the automakers are paying for it.

In order to make the Model S eligible to the incentive, Tesla unbundled a bunch of standard features as an option in Model S in order to reduce the base price to 60,000 € negotiated by the government and the German auto industry before tax.

They made this move in November 2016 and year later, German car magazine Auto-Bild published a report claiming to now being able to see through Tesla’s “deception” and going as far as calling it “fraud” and “cheating”. They claimed that buyers weren’t actually able to buy a Model S without those options, something that Tesla denied.

The automaker said that they not only offer the option but that some vehicles were delivered without the features.

A few months later, the matter was apparently fixed in March when the Federal Office of Economics and Export Control (BAFA) allowed back access to the incentive for Model S buyers.

Now in a strange twist after having agreed that the Model S qualifies, BAFA is asking people who bought a Model S before March to pay back the incentive.

In a statement on their website, BAFA claims that the move comes as a result of failed talks with Tesla to resolve the issue:

“Since then BAFA has been in close contact with the manufacturer Tesla in order to reach an amicable solution in the interests of Tesla’s customers. The aim of the BAFA was to achieve a solution that would indemnify the customers. In the course of the talks, BAFA had given the manufacturer Tesla the opportunity to develop a solution proposal by the beginning of July 2018. The manufacturer did not make use of this offer. The talks with Tesla have unfortunately been fruitless. As a result, due to the requirements of administrative law and budget law, the buyback premium must now be reversed.”

The government says that “all Tesla customers who purchased the “Tesla Model S” before March 6, 2018, are affected by the reversal.”

It affects between 800 and 1,050 Tesla owners in Germany.

Tesla is fighting back the decision and confirmed to Electrek that it will cover the cost of paying back the incentive until it is resolved with the government. Automakers are already contributing to half the incentive and therefore, Tesla should only have to pay back the government’s half of the €4,000 EV incentive.

Here’s a statement from a Tesla spokesperson:

“The arbitrary decision to temporarily remove Tesla from the list of vehicles eligible for the Environmental Bonus (Umweltbonus) was unjustified, contrary to the stated goals of the program, and unfair to our customers. The fact that Tesla was included on the list, removed from the list, and then again added to the list is proof that this was a mistake. As our website demonstrates, anyone in Germany has always been able to order a base version Model S that was below the required price level, and we have delivered such cars to customers.

As background, the price cap was intentionally set by the German Government at a level that was intended to prevent Tesla cars from qualifying for it. As a result, Tesla planned to file a complaint with the EU Commission, as this was against EU rules. Instead, Tesla and the German Government agreed on an acceptable middle ground that allowed Tesla to sell a low option vehicle that qualifies for the incentive and customers could subsequently upgrade if they wished. That is exactly what Tesla has done.

We are appealing BAFA’s decision to take this action against our pre-March 2018 customers. To make sure our customers are not harmed by this decision, we will cover the cost of the bonus for them until the issue is resolved.”

About the Author