Automakers will fund German EV subsidy bill after state backs out

Automakers will fund German EV subsidy bill after state backs out

Automotive News Europe — 2023-12-19

Automotive Industry

Volkswagen, Stellantis, Audi, Mercedes-Benz and Kia said they will fund a subsidy for German electric vehicle buyers after the government this week abruptly dropped a state-funded program.

Germany's economy ministry halted the seven-year program on Monday in the latest sign of belt-tightening following the adoption of a revised 2024 budget.

The program had offered up to €6,750 toward the cost of a battery-electric car funded by the state and carmaker depending on the value of the EV.

VW brand on Tuesday said it would fund the full subsidy of €6,750 for private customers in Germany who ordered an eligible vehicle from its all-electric ID range before 15 December. Those registered between 1 January and 31 March will receive €4,500, VW said, in line with a planned reduction in the subsidy scheme.

Audi said it would fund the full subsidy for cars ordered before 16 December and delivered by the end of the year. Mercedes said it would do the same for orders delivered and registered between 18-31 December, and would provide its own portion of the subsidy from January onwards.

Stellantis on Monday 18 December said it would fund the full subsidy until 31 December and thereafter a reduced subsidy for vehicles registered by 29 February.

Kia said it will fund the subsidy until 31 March for private customers who buy a Niro EV, EV6, EV6 GT or an e-Soul.

The German government had intended to offer reduced subsidies until the end of 2024 but dropped the program unexpectedly when it was forced to revise its spending plans after a ruling by the country's constitutional court created a €60 bn ($65 bn) gap in its 2024 budget.

Opponents said ending EV incentives would hit German carmakers already struggling to bring down prices to match Tesla and Chinese competitors.

Industry expert Ferdinand Dudenhöffer told the German media that he expects a decline of up to 200,000 electric car sales in Germany in 2024.

The ADAC automobile association said EVs in Germany were still too expensive to end the subsidy. It said only three models from major carmakers cost less than €30,000.