The German government paid out € 652 million in EV subsidy in 2020, according to figures from regulator Bafa that the German newspaper Rheinische Post could see. That is more than 6.5 times more than the amount of € 98 million that was paid out in 2019. Peter Altmaier, the German Minister of Economic Affairs, has no plans to close the subsidy tap for the time being.
The total subsidy amount has been able to undergo substantial growth, partly thanks to the ‘innovation bonus’ that the German government introduced in June. Then, as part of a new incentive package, it was decided to increase the EV subsidy for the purchase of a new car from € 3,000 to € 6,000. For plug-in hybrids and hybrids, the amount of the subsidy is € 4,500 and € 3,750 respectively. The German consumer is apparently eager to make use of that option. This is also evident from the sharply increasing share of EVs in total German sales. According to figures from the Kraftfahrt Bundesamt, 28,965 EVs were sold last month, a large five-fold increase compared to November 2019.
On the total sale of 290,150 cars, the number of EVs is just under 1 percent and that should grow in the coming years. That is why Germany will continue to provide the subsidy until 2025. Peter Altmaier, the Minister of Economic Affairs, sees the subsidy as the main reason for the increasing interest in EVs in Germany. He previously argued for an extension of the subsidy, which was recently agreed at the German auto summit. Sales of EVs in Germany are expected to increase again in the coming year.
The German policy is quite the contrast with the way in which the Dutch government deals with the EV subsidy. Up to and including 2025, a larger subsidy pool will become available every year, but next year, thanks to the contested ‘roll-over scheme’, there will be only € 1.1 million left to subsidize the purchase of new EVs. That means that many EV buyers will be left out in the coming year.