Germany increases EV incentives – making less expensive electric cars even cheaper

Germany is increasing its incentives for buying electric vehicles with a focus on making less expensive electric cars even cheaper.

Several countries are offering incentives to buy electric vehicles in order to accelerate adoption and represent the reduced impact on the environment compared to gasoline-powered cars.

However, Germany’s EV incentive program is different than others because they negotiated it with the auto industry who contribute half of them.

When Germany first introduced its new plan to boost electric vehicle adoption through new incentives, including a €4,000 discount at the time of 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.

The incentive was set to phase out next year, but they have now come to a new agreement to extend the incentive to 2025 and they have changed a few things.

Under the new rules, electric cars costing more than €60,000 are still not eligible for an incentive, but they are increasing the incentive for electric cars costing less than €40,000 ($44,500) (via DW):

“Under the agreement, consumer subsidies for electric cars costing less than €40,000 ($44,500) will increase to €6,000 (about $6,700) from €4,000. Purchasers of plug-in hybrids in this price range would be given a subsidy of €4,500, up from €3,000.”

For cars from €40,000 to €60,000, the incentive increased to €5,000.

Now some electric cars are going to be extremely competitive in Germany, including the new VW ID.3, which could start for as low as €24,000.

Electrek’s Take

That’s a great improvement over the previous program that should accelerate EV adoption in Germany.

I am even OK with the €4,500 for plug-in hybrids since it’s still lower than for all-electric vehicles.

However, I still think that a tax on combustion engine vehicles would be a better approach in order to represent their cost on the environment and health.

FTC: We use income earning auto affiliate links. More.