Earlier in June the German government announced a huge economic stimulus package with sweeping incentives pushing the country toward an electric transit future. In all, the country will be spending some 130 billion euros on an economic recovery plan that involves cash for Germans buying electric cars, a widespread growth of its charging infrastructure, and investment in public transit.
It makes sense that the country is doing what it can to push electrification. In addition to the country’s desire to lower its emissions totals, automakers like VW have leaned in to the whole EV thing, and what’s good for VAG is probably good for DE. To a lesser extent, every German automaker has adapted at least some electrification, and that’s expected to expand in coming years across the board. Germany wants Germans to buy German electric cars. Go figure.
Germany is already the biggest market for EVs in Europe, and this stimulus package will only prove to extend that lead in the segment. Here’s what it entails, and how it will be implemented.
First, Germany is going to reduce the cost to buy-in to an electric car or plug-in hybrid with incentive subsidies. If you’re looking at an EV in Germany that costs less than 40,000 euros, you’ll get up to 9,000 euros back in combined incentives with 6,000 coming from the government and 3,000 coming to you from the manufacturer by mandate of the government. Cars priced between 40,000 and 65,000 euros can receive up to 7,500 in incentives. Anything more expensive than that and they assume you can afford it regardless. If you are buying a new Taycan, you won’t be getting any kickbacks.
Similarly, PHEVs up to 40,000 euro can receive up to 6,750 back, while those priced between 40,000 and 65,000 euros are eligible for as much as 5,625 in incentives. The German government says these subsidies will cost somewhere in the realm of 2.2 billion euros between now and the end of 2021.
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If you buy your EV or PHEV between July 1 and December 31, you’ll receive an extra 3 percent reduction in the value-added tax on that purchase. If you’re getting one of those 65,000 euro deals, that reduction just in tax is 1,950 euros!
A new law in Germany requires every fuel station to have EV charging infrastructure in place. Public chargers will now be as ubiquitous as fuel pumps. That would go a long way toward making road trips in electric cars more convenient. Not having to search for a charger, just knowing that there would be one at pretty much every Autobahn exit, will make EV ownership a little less cerebral. You don’t have to fiddle with an app or plan your route strategically!
An additional 2.5 billion euros will be made available for expansion of charging infrastructure. Germany hopes to have 1 million public facing charging ports within ten years. That’s up from the current 28,000-ish that are available now. Ambitious, but if any country can do it, Germany can.
Another 1.2 billion will be invested to incentivize private and municipal transit operators to swap out their ICE vehicles for alternative drive systems. This is intended to push public transit into the electric world.
That’s a pretty hefty strategy for growing the country’s electric fleet, and will only prove to accelerate its standing in engineering and development of new EV tech. Clearly the country is invested in this electric future, rather than sticking its head in the sand and ignoring the winds of change, which, you know, must be nice.
According to research firm Canalys, electric and hybrid vehicles now make up more than seven percent of all new cars delivered in Europe, and Germany’s ratio is even more electrified. Clearly the market for such vehicles exists, and will likely prove even larger with these incentives.