Published on January 16th, 2016 | by Jake Richardson


Germany Mulling €2 Billion Incentives For Electric Cars

January 16th, 2016 by  

Originally published on Sustainnovate.

2 Billion Euros Might Be Used For Electric Cars By German Government

Germany is considering providing 2 billion euros to subsidize the purchasing of more electric cars. German Economy Minister Sigmar Gabriel is behind the idea, which also includes adding more EV charging stations and supporting the acquisition of more electric vehicles for federal offices.

One might expect it would be an individual from an environmental government department who came up with such an idea, because electric vehicles are better for the environment, but the German government in general is getting more supportive of EVs. It wants one million of them on the roads by 2020, which is obviously just four years away. (One source estimated that there may be another 950,000 which need to be sold to reach the goal.)

As was mentioned before, Gabriel’s idea is not only something which is environmentally conscious, because presumably many of the newly purchased electric vehicles would be German-made. Encouraging the purchase of vehicles manufactured in Germany with a subsidy would be good for companies like BMW and Volkswagen, which already make EVs but are planning to introduce a lot more models.

Of course, EVs are better for human health too because they produce no tailpipe emissions, so German urban air quality would most likely improve. In fact, if a household had enough solar power, it might generate enough electricity to charge an EV at home with clean, renewable electricity.

Scenarios involving clean electricity to charge the batteries of vehicles that produce no tailpipe emissions might sound idealistic or fantastic. However, areas within Germany already generate high levels of clean, renewable electricity, so there is no reason why it can’t be used to power electric vehicles.

Electric cars are part of the energy puzzle that Germany has been working steadily to solve by reducing the use of fossil fuels and nuclear power.

One fascinating thing about a scenario where there are one million electric vehicles in a nation is that they can function as a sort of energy storage system. In other words, they can store electricity when they are not be driven. Additionally, if a homeowner has a solar power system but no battery storage, the battery in her or his EV could store some of the excess electricity generated by it (theoretically).

If 2 billion euros are invested in this EV subsidy, there are likely to be a number of wins: reducing air pollution which contributes to smog, reducing climate change emissions, moving the nation further along a path towards clean electricity, and supporting German auto manufacturers and their employees.

Image Credit: Thomas Wolf (some rights reserved)

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  • Epicurus

    The U.S. needs to convert its $7500 single year tax credit into a point of sale rebate.

    • newnodm

      Do people without $7500 tax liability buy new cars? Even a retiree living on investments could sell stock and that produce sufficient liability.

      • Roger Lambert

        Many would like to buy a new EV, yes. And without raiding the IRA for 4 times the size of the rebate.

      • Epicurus

        Force old people to sell their investments to get the tax credit. That seems reasonable. Tea-bagger?

        BTW, the gain would be taxed at the capital gains rate.

        A rebate would be much fairer to all.

      • A point well made.

        I get tired of the calls to divert subsidies from the average new car buyer (AKA “The Rich”) to the poor. The poor don’t buy any type of new car and won’t start simply because they are offered subsidies.

        Diverting subsides in this manner will leave the subsidies on the table and reduce the sales of EV’s and thereby forestalling the flow of secondhand EV’s to the poor.

        • Edwin Franks

          and the not so poor

        • ROBwithaB

          “Rich” and “poor” are relative terms.
          And last I heard, there were still at least SOME of that endangered species left wandering around, known as the American Middle Class. Do they not sometimes buy affordable new cars? Would some of them not perhaps prefer an EV? Or should they be consigned to a world where they are happy drive your rejects?
          The point is that the same amount of money can have a much greater effect at incentivising EV adoption, if it is steered towards cheaper cars or people of lower income.
          Sure, there probably are people who buy a car for $35k who WOULD be able to use the full $7,5k tax credit. But there are also going to be a lot of people who would want to buy a Bolt, Leaf or Model 3 who do NOT have such a big tax liability. Like…: People who saved up for a number of years to buy a car. People who inherited some money from a spouse or sold a primary residence (or other situations where there is usually an exemption for the first $100k or whatever. I don’t claim to be an expert on US tax law, but it is common to have exemptions from capital gains tax , or to exclude spouses or children from inheritance tax up to a certain threshold). Old people who have invested in “dividend stocks” and would sell some to finance a new car won’t necessarily have enjoyed a great capital growth in the last few years. All sorts of people, basically.
          Who are “the poor” anyway? You seem to be an expert, so that’s why I ask…
          For someone spending $100k on a new Tesla, it could be argued that a discount of $7,500 isn’t really that much of an incentive. Only 7.5%, after all. Might sway some people, but for many others they would probably have bought the car anyway.
          However, for a young family looking to buy their first new car, they might well be induced into buying an EV rather than an ICE if the “discount” on the former brings it into price parity with the latter.

          The idea is to get the biggest possible effect for the least amount of money. It is perfectly valid for everyone, including the dirty poor, to have a say in how the public purse is allocated. Or it was, last time I checked. Maybe things have changed in the USA since I was last there….

        • ROBwithaB

          The primary goal right now should be to extend the incentive program beyond the first 200,000 cars sold (in the US) per manufacturer. There is no doubt a lot of lobbying happening behind the scenes already, with Tesla due to crash through that mark within perhaps 24-30 months. Basically, just as the affordable Model 3 cars start hitting the market, the incentives disappear. If I were a potential 3 buyer whose dreams of owning a Tesla evaporated as a result, I’d be pretty upset. And might be inclined to key the next S or X I saw parked smugly at a supercharger.

          The incentive program, in its current form, is a hard sell. Politicians don’t want to be seen as giving breaks to the rich, and would be disinclined to support something that would make them look like they answer only to the 1%.

          There are powerful forces at work (fossil fuel industry etc) who would seek to have the incentives expire as set out in the current legislation. Easy. They don’t even need to pass any new laws. Just let the credits expire, because “It’s the law”. Or filibuster the heck out of any attempts at new legislation.
          You make their work SO much easier by trying to limit the available handouts to “rich liberals”.

          Instead, make it politically expedient, with bipartisan appeal. Kill any “us vs them” narrative (rich vs poor, Rep vs Dem, economic vs ecological). Make it about “saving the health of our children, the leaders of tomorrow” and “helping the working class to get to work”.

          In other words, make it a simple rebate so that it’s easy to administer. Reduce it a bit ($5k?) so that the same amount of money helps to move more cars.
          Have an advertising campaign that promotes helping “hardworking American families” to “do the right thing for our children’s future” and “end our reliance on foreign oil”. Cue rousing music. Images of flags waving and a rosy-cheeked family in their EV arriving at campground in Yosemite. You get the idea…

          The current system clearly favours wealthy people. Therefore it is not popular with the majority of people. Who are NOT wealthy. And who each have one vote. Thus, the current system is unlikely to survive.

          If all we want to do is take advantage of “poor people” to get a discount on a cool car that we can use to show “poor people” how inferior they are to us, then by all means let’s go ahead. But don’t expect those “poor people” to pat you us the back for saving the world.
          And if we REALLY want to save the world, perhaps we should be looking at ways to “accelerate the transition towards sustainable transportation”.
          By getting a LOT of people into electric vehicles.
          And maybe the wealthy could even consider subsidising such transition, to some extent. I mean, if you REALLY believe in something, put your money where your mouth is, right? Not by buying something for yourself, but by allowing the government to use your tax money to do the right thing for OTHER people. Right?

  • Kraylin

    1 million EV’s doesnt seem doable by 2020 to me but I’m not sure if that makes it a good or bad target… best of luck to them! I hope they make it and then some.

    • Karl the brewer
      • Kraylin

        Compelling article, thanks for that. I was already convinced of the merits of many efforts to reduce pollution, namely Electric Vehicles and Solar info I like to get here at CleanTechnica.

        I’m just trying to be realistic as well, with Germany only selling around 20,000 EV’s a year (sorry couldn’t find a quick reliable source for a more accurate 2015 EV sales number). It’s going to take a small miracle for them to reach 1million by 2020. Even if sales ramp up exponentially supply may become an issue as Tesla is the only company with a significant sales forecast to 2020 and even that is only 500,000 vehicles globally, what they sell in germany will be far less of course.

        • newnodm

          I’m sure 1 million vehicles includes PHEV. Large cities will start requiring minimum electric range to enter, but not a complete absence of combustion engines.

  • Dan

    Even if this is targeting support for Volkswagen, building out a charging infrastructure and giving VW the confidence to commit more fully to electrification is a win win for everybody. I like the e golf way more than their newer release concept, but anyways they could buckle down and put the US and the rest of Europe to shame with an organized agreement on supporting electric car mass adoption. Hopefully they learn lessons from the supercharger network (make the chargers as universally accessible and as high quality as possible) and also from Russia’s strange blind policy of forcing gas stations to install chargers <bound to fail through heavy handed uninformed bureaucracy. BMW seems to be on a good tract too. No help necessary but it could speed things up…

    • Dan

      Whoa, dont know what happened there ^

      • Martin

        Gremlins in the computer.

    • Frank

      Gemans moved the needle in solar back in the day. And I’m awaiting the mod 3. If that works out, it won’t be just the Gemans looking over their shoulders.

      • Omega Centauri

        But they kinda shot themselves in the foot doing it. They supported solar by giving out very generous long tern renewables tariffs, back when PV was expensive. Then they got cold feet just as solar became affordable. It was great for the rest of the world, as solar got to climb the learning curve at the expense of German consumers.

        • wattleberry

          Reminds me of the years when the UK used to pioneer things then watch others develop and profit from them.

      • sjc_1

        QCell used to be a major producer of cells until the Chinese decided to dominate the world market.

      • wattleberry

        Who are Gemans?

      • Steve Grinwis

        If they can pull it off, it would be interesting indeed. Despite my reservations in the other thread, I’m still hoping Tesla can pull off a compelling, reliable electric mass market car.

  • JamesWimberley

    Cynically, this is a Volkswagen rescue package. An ill wind, &c.

    • Ed

      Correct! But, it is coming sooner than I expect.

    • Perhaps, but if it benefits EV adoption as a whole then that’s still a good thing. They can’t structure the incentive to benefit VW solely and the $2 billion is completely eclipsed by the liability they face in the US alone.

      • MorinMoss

        VW is now arguing that their defeat device is not illegal under German rules. Let’s see how this plays out. While I love VW cars, I hate cheats so I hope they get the max penalties in every jurisdiction where they sold those hacked autos.

  • newnodm

    Is there a long german word for “can we incentive German E.V. without helping Tesla?”

    • BlackTalon53 .


      I’ll admit I just made this up, but it perfectly correct as far as rules of German grammar are concerned.You’re welcome.

      A German.

      • Martin

        good one!
        But maybe translate it for the people who don not understand German.
        An Ex German, now Canadian.

        • Andre Needham

          Google says “Long haul overseas high-performance electric vehicle competition prevention law import hardship”

          • newnodm

            perfect 🙂

        • jeffhre


          English = Weltsdeutscehincentevnienteslan!

      • WuestenBlitz

        Leider Geil. 😉

    • Foersom

      It is a subsidy to buyers of electric cars. Where does it say that it is only for German made EVs?

      • Adrian

        In the fine print.

        • Foersom

          Link, please.

    • Shane 2

      “can we incentive German E.V. without helping Tesla”
      The Chinese have incentives that apply only to locally manufactured vehicles and they slap 25% import duties on Teslas. The Germans might have to offer incentives to cars made in other EU countries due to EU rules but they might be able to get away with excluding incentives from non-EU vehicles.

      • ROBwithaB

        Ja, except that European Tesla’s are already “made” in the Netherlands, according to the official rules.

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