The federal government’s plan to lower the purchase premium for electric cars is met with incomprehension by the German Association of the Automotive Industry (VDA). “In times of rising costs and burdens, the decision to unilaterally and comprehensively cut funding is incomprehensible,” says the association in a statement. It is right to reduce funding in the long term, but now is the wrong time to do so.
“Consumers are being left in the lurch and the ramp-up of e-mobility is being slowed down,” explained VDA President Hildegard Müller. Surveys have shown that the cost of a new electric car is too high for many people. The premium – also known as the environmental bonus – is an important tool to counteract this and to make it easier for more people to switch to e-mobility.
The federal government had agreed this week, among other things, to reduce the subsidy for new battery-powered cars, which cost less than 40,000 euros according to the list price, from 6,000 euros to 4,500 euros from January 1, 2023. E-cars that cost between 40,000 and 65,000 euros are to be funded with 3,000 euros. Plug-in hybrids should no longer be funded.
“Costs for e-cars will fall – soon”
The cost of electric cars is expected to fall, said Müller, but only gradually as a result of the increasing conversion of factories, further technological leaps and economies of scale. Then electric cars could even be cheaper than combustion engines, and then the subsidy could also be dropped. Now, however, “particularly in view of the planned tightening of EU fleet limits” a more powerful signal would have been necessary in the market.
Müller also cannot understand that the premium should only be paid out to private car buyers from September 1, 2023. It is commercial cars that are subsequently sold on the used car market at lower prices and thus ensure a more climate-friendly fleet overall. Plug-in hybrids, for which subsidies are to be completely eliminated, are the ideal entry point into e-mobility for many people, especially in regions with an insufficient charging infrastructure.
The VDA also criticizes that the premium should continue to be linked to the date of registration of the electric vehicle. Since the supply chains are currently disrupted by the pandemic and the war in Ukraine, interested parties can no longer know whether they will ultimately receive funding.
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